Inclusive growth for entrepreneurs in North Carolina — and beyond
This article highlights key themes and moments from the fourth Mastercard Strive USA Summit held in Raleigh, North Carolina, on September 11, 2024, where conversations centered on how to ensure that all entrepreneurs — in North Carolina and nationally — have access to the resources they need to succeed.
Entrepreneurship is booming in North Carolina by many measures. With more than a million small businesses in the state — including many high-growth start-ups in the Research Triangle region — entrepreneurs filed over 330,000 new business applications between January 2022 and December 2023.
However, not all small businesses have equal access to opportunity. Entrepreneurs in rural and low-income communities continue to face challenges accessing affordable capital, technical assistance, and networks. More investment is also necessary in order for local communities to access unprecedented federal funding for small businesses and high-potential technologies that can help them build resilience and grow.
Building a stronger small business ecosystem in North Carolina and beyond, with a focus on leveling the playing field for all U.S. entrepreneurs, was the central theme of the fourth Mastercard Strive USA Summit in Raleigh, North Carolina.
The event brought together national and local leaders from government, philanthropy, the private sector, and the small business community to discuss key issues such as supporting Community Development Financial Institutions (CDFIs), using new technologies to unlock capital for underserved entrepreneurs, and enhancing collaboration among business support organizations. A spotlight conversation with senior leaders from the Departments of Treasury and Commerce also focused on how historic federal programs, such as the Greenhouse Gas Reduction Fund, can be implemented to ensure that the funds are deployed in partnership with local communities.
A focus on underserved entrepreneurs
Many organizations at the summit were mission-driven institutions based in North Carolina, working to ensure that all entrepreneurs, regardless of location or credit score, have access to opportunities. These leaders spoke about what this work looks like on the ground and how it differs from traditional banks and business support models.
“Our clientele are talented entrepreneurs, but they are often considered tier 2 clients because their credit scores are lower and they generally don’t have access to traditional banks,” said TF Congleton, VP and senior credit officer at Institute Capital, a CDFI based in Durham, North Carolina.
On how Institute Capital strives to support its customer base, TF shared that, “Unlike a traditional bank, our mission is not to have a client for life. Our mission is to get a client to a point where they can go to a traditional bank and not only get a loan, but the respect and dignity they deserve because they are the ones creating jobs and new opportunities for all of us.”
At the ecosystem level, building an inclusive ecosystem requires intentional investments that directly address disparities in funding, resources, and geographic access. Many areas, especially those far from tech and urban hubs, are often overlooked — an oversight that often leaves capable entrepreneurs behind. Thom Ruhe, CEO of NC IDEA, highlighted how focused efforts can drive meaningful change.
“Nine years ago, 90% of our grant funding went to white males in major metro areas. Now, approximately 70% of our funding goes to women, minority, and rural-based entrepreneurs. We didn’t achieve this result by excluding any demographic. We did it by making specific investments around the state to help improve capacity building in ways that would level the playing field.”
Technology as a tool to strengthen human interactions
One panel focused specifically on how alternative credit scoring models were a huge opportunity for community financial institutions, even more than for traditional banks.
“If your small business has been doing very well over the last 12 months, that will not really show up in your credit score,” said Bernard Worthy, Co-founder and CEO of LoanWell, an automated lending platform for community lenders and Mastercard Strive USA Innovation Fund winner. “By using real-time data, CDFIs can make better decisions, deploy capital more efficiently, and offer lower interest rates. Plus, speed matters — CDFIs aren’t just competing with each other; they’re up against online lenders that offer quick decisions but may saddle entrepreneurs with high-interest rates.”
Panelists agreed that technology’s role is to strengthen, not replace, the human interactions that are core to community financial institutions.
“We are very excited about a new credit model we are building using machine learning, but it’s crucial for us to preserve the human connection. That’s why we ensure that all decisions are guided by people, without fully automating approvals or denials,” said Nicole Jasma, Director of Program Efficiency, Data, and Impact at Accessity, a CDFI based in southern California and another Mastercard Strive USA Innovation Fund winner. “Trust is very important to what we do, so we are using technology to improve efficiency and thereby be able to spend more time with our clients.”
Accelerating the clean energy transition in partnership with local communities
A recurring theme was the role of historical federal funding for small businesses, with the spotlight conversation focusing on how agencies are partnering with local organizations to deploy it. Several organizations discussed their engagement with federal agencies and highlighted how philanthropy has played a critical role in the deploying puzzle.
“We knew there would be a lag between announcing the Greenhouse Gas Reduction Fund and receiving that funding, so after the announcement, we really relied on philanthropy and partnerships so we could get started right away and lay the groundwork for accessing those federal funds as soon as they were available,” said Melissa Malkin-Weber, Co-director of the North Carolina Clean Energy Fund, an organization that works to fill gaps in the financing landscape for clean energy.
Working with trusted local organizations to deploy this funding — and avoiding a model where “not-from-here” bureaucrats showed up on doorsteps with clipboards talking about the benefits of clean energy was a sentiment echoed by multiple speakers.
“There can be high distrust of the government here,” said Malkin-Weber. “The only way the clean energy transition ends up working is to work through local communities and the local organizations that serve them.”
The Department of Treasury echoed this approach saying their role was not to be on the front lines of deployment, recognizing their role would look different in different communities.
“Literally, every place our funds are deployed will have a different set of actors, a different set of assets and resources, and a different context,” said Ronald Newman, Senior Advisor for Inflation Reduction Act Implementation at the Department of Treasury. “Our role is not to tell communities how to deploy this funding, but rather understand the context of each place, try to be helpful by highlighting relevant opportunities, and then let community organizations and other local actors that have already built trust lead in implementing programs and projects.”
Recognizing progress, but also the need to work both smarter and harder
More investment is flowing into North Carolina’s small business ecosystem, which is good news. However, panelists emphasized that more must be done to ensure these investments benefit all communities and strengthen collaboration among various support organizations, while also avoiding duplication of efforts.
“They say you have to work smarter, not harder — but today we still have to do both in order to support entrepreneurs in the rural areas we serve,” said Matt Maker, executive director of Mountain BizWorks, a CDFI that works in western North Carolina. “Organizations like ours are small, but we see that as an opportunity to lean into partnerships, collaborate with others, and innovate with technology to reach more customers — because there are still many more small businesses we want to support.”
