Diversity has always been seen as an asset for a business, be it within the industry or personnel. According to Rogers, “Minority-owned businesses grew more than twice as fast as U.S. firms overall between 2002 and 2007, increasing from 4.0 million to 5.8 million firms” (Rogers, 2020). This is especially true for minorities and women, as highlighted by Chapter 9 in Roger’s Entrepreneurial finance. Although minorities and women have ultimately changed the infrastructure of small businesses, they still have a long way to go. Even with all the changes and federal laws prohibiting race and gender discrimination, there are still shortfalls in capital and fair chances provided to entrepreneurs within these categories.
However, as the saying goes “when one door closes, another door opens”. These grievances have fueled the tenacity and determination of women and minorities in their efforts to be successful entrepreneurs. There have also been an increasing amount of investment firms focusing on various niches that prove to be resourceful for these two groups. There are even firms that will only invest in companies of certain geographic regions, such as the New England region of rural areas (Rogers, 2020).
There are similar dynamics when it comes to debt financing. Low approval rates cause minorities and women to steer away from loan applications- as they know they are more likely to be rejected. As a result, minority owned companies use personal financing more than white-owned companies (Rogers, 2020. There is obviously an equality gap that must be filled. As former SBA chief Aida Alverez stated: “Businesses owned by women and minorities are multiplying at a faster rate than all other U.S. businesses. If we don’t start investing now in the potential of the businesses, we will not have a successful economy in the new millennium” (Rogers, 2020).
References:
Hyatt, A. (2016). Crowd start: The ultimate guide to a powerful & profitable crowdfunding campaign. New York: Hunter Cat Press.
Rogers, S. (2020). Entrepreneurial finance: Finance and business strategies for the serious entrepreneur (Third ed.). United States: Mcgraw-Hill Education.
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