Get Money: Site Helps Black Entrepreneurs Fund Their Dreams
Three of the six founders of Black Startup: Bola Adewumi, Nathan Bennett Fleming, Elgin W. Tucker. (Photo: Courtesy of BlackStartup)
With Spike Lee reaching his $1.25 million goal on Kickstarter, the power of a crowd-funding site couldn't be more inspiring. On sites like Kickstarter and Indiegogo, anyone with an idea or a cause can raise money to get their project funded by folks who are looking to support their mission. And in today's economy, who couldn't use a few dollars to support a dream?
If it's your dream to be your own boss and start your own business, for African-Americans especially, it can be hard to get started no matter how great the idea is.
"Despite starting with less wealth on average, Black and Hispanic entrepreneurs rely more on their own money to start their businesses: On average owners and company insiders put up 56 percent of initial capital, with external debt and equity making up the rest," writes John Tozzi at Businessweek.
Enter Black Startup, a crowd-funding site started in 2012 by six Morehouse frat brothers — all proud members of Omega Psi Phi: Nathan Bennett-Fleming, 28; Elgin W. Tucker, 28; Bola Adewumi, 27; Kyle S. Yeldell, 28; Christopher G. Hollins, 27; and Aaron A. O’Brien, 28.
BET.com recently caught up with Fleming, Black Startup's CEO, shortly after he and his co-founders completed a 10-week entrepreneurial boot camp at Yale. Fleming tells us about the importance of entrepreneurship, what it takes to make a successful project on Black Startup and what separates their site from other crowd-funding websites.
BET.com: In this job climate, how important do you think it is for African-Americans to start their own businesses?
Nathan Bennett Fleming: Well, I think in any climate it’s important for anybody to become a business owner, just because it gives you a level of control and a level of autonomy over your life’s direction and achieving your life’s goals. But particularly in the African-American community where there may be barriers to employment, such as potentially educational issues, interactions with the criminal justice system or just a of lack of opportunities in our communities.
It’s important to be able to take ownership and create jobs yourself. Focusing on entrepreneurship is one of the most important things that we can do because it allows us to aggregate our spending power to create wealth. And once we build that system, then there is a cycle where we can use our capital to grow our community and to accelerate economic development in the African-American community. So it’s very important. Entrepreneurship is a key step in that.
So other than being focused solely on Black startups, what do you think separates your company from, say, Kickstarter or Indiegogo?
Well, several things. One, those are one-size-fit-all platforms. The platforms that will be successful in the future will not be carbon copies of Kickstarter or Indiegogo but platforms that service an interesting niche. So clearly demographically targeted platforms is an interesting niche. Kickstarter and Indiegogo are platforms that build communities on top of them, but Black Startup is a community that has a platform. In addition to that, we have a support function on our website, so we’ll allow users to be able to access mentors, to access e-learning materials, to access legal and financial documents to help close some of the knowledge gaps that inhibit Black entrepreneurship at times.
So those are the main things that we do differently from the other crowdfunding sites, is the support mechanism and the fact that we’re a niche. But for the African-American community, if you have a project that’s targeted toward the African-American community or if your project is designed to solve a social problem that’s in the African-American community, you’re far more likely to find people that are interested in the idea and to find a critical massive of support on a site like Black Startup. It would be very difficult to find that critical massive support on a site like Kickstarter, where you would be like a needle in a haystack and the crowd isn’t designed for those particular ideas.
Could you talk a little bit about some of the business plan contests that you run at colleges across wherever, and where they have been and how successful have they been?
The idea is to run competitions on historically Black college campuses because we know that there are smart, talented people there, they have built in crowds, clearly they have their school networks, they have their family network, they have the geographic network. But also, when I was in college, I had plenty of good ideas. I didn’t know what to do with a good idea. So we feel that if there is a crowd that benefits from the services that we provide, it’s probably going to be younger African-Americans with some college who are in college or have graduated college.
What do you think makes a project on Black Startup successful? Several of them have met their goals.
Crowdfunding really allows you to leverage your existing network, particularly using social networking, so those who have solid social networks are going to be more likely to be successful. And clearly the strength of the particular idea that’s being funded, so ideas that are more thought out, ideas that have gone through more rigorous ideation phases, are going to be much more likely to be successful rather than ideas that are very varied on the left side of ideation spectrum.
It's also the enthusiasm of the project manager. Our site isn’t a magic wand, you can’t expect to just put your project on our site and expect it to get funded out of anywhere. It takes energy. It takes the enthusiasm.
And then finally, the last point is that social impact projects or projects from nonprofit organizations tend to have a stronger chance of being successful because they’re impacting a wider net of people and their network tends to be larger because they’re an organization.
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