Solve for the future: ways to propel Miami’s Black entrepreneurs and innovators

The vision: It’s 2040, and Miami is known as one of the truly diverse innovation ecosystems in the world. Black-owned, high-growth companies are integral to the economy’s success. Successful founders have emerged from multiple Greater Miami neighborhoods; the city’s reputation for access to capital and cultural acceptance has also made it a magnet for the best and brightest Black entrepreneurs from across the country.

How do we make this vision a reality?

Solve for the future

Last week, we unpacked why Black entrepreneurship matters and where we are now — even after VC funding for Black founders surged in 2020, investment in Black founders was still just 1.2% of the $147 billion invested nationally.

How can we propel Black innovation and entrepreneurship in Miami?

The numbers show a huge opportunity missed. In Episode 3 of the Opportunity Miami podcast, Matt Haggman spoke with four Black tech and innovation leaders about work that’s being done — and remains to be done — to build a future where being a Black tech company founder is normal and commonplace.

What investors can do

• Shu Nyatta, who runs the SB Opportunity Fund, said venture capitalists need to recognize that investing in founders of color is good business. “Profit and social impact are not these dichotomous things. They’re often very related, and seeing them together can be more powerful than seeing them apart. These founders are overlooked for the wrong reasons.”
• Big-name investors such as Softbank, J.P. Morgan, and Goldman Sachs should recognize that their brand matters along with their money, as it helps close the “permission gap” and encourages people of color to see themselves as potentially successful founders, Nyatta added.
• Nyatta said the biggest challenge is at “the top of the funnel,” when companies are being first started. To stir more company creation by Black founders, Miami would benefit from a well-known accelerator, such as Y Combinator, to incubate many very early-stage startups to the point where they are ready for VC investment. This is especially since Black and Brown founders are far less likely to have access to “friends and family” investment rounds than White, upper-middle class founder like Mark Zuckerberg, Nyatta said
• Brian Brackeen, Lightship Capital co-founder, argues that VCs firms should abandon the practice of unanimous partner approval for investments, because there will always be one person in the room with bias that makes them find fault with Black founders.
• Felecia Hatcher stressed that attracting capital shouldn’t be the only success metric for Miami’s tech ecosystem. Companies that don’t fit the venture model but are generating strong revenues should be supported and counted. After becoming CEO of Black Ambition this year, Hatcher expanded the prize-and-incubation initiative to include both types of companies.

What policymakers can do

• Take a wide view. Certainly, the issue of access to capital affects Black entrepreneurs outside of tech, where small businesses may be struggling to get lines of credit or mortgages. Supporting entrepreneurs should be a priority for state and local lawmakers, because it can revitalize communities from the ground up, says Victor Hwang, founder of the entrepreneurship advocacy group Right to Start.
• Direct funding support. Government support can be a game-changer. Brackeen said his firm had received $17 million in state and municipal funding to create a center in Cincinnati to incubate founders who are women and people of color. That’s significantly more than the foundation support that Hatcher received to found the Center for Black Innovation in historically Black Overtown.
• Long term approach. Breaking down deeply-rooted structural inequity to create a diverse, inclusive tech and innovation ecosystem will take both resources and a long-term commitment, Nyatta, Brackeen and Hatcher all said. “It’s not a one-year affair, maybe it’s not even a 10-year affair,” said Nyatta. “The most important thing is consistent effort over time, because what you want to create is this self-reinforcing flywheel of founders who do not any longer feel underrepresented.”

Action items: what can you do today?

• Everyone has the choice to patronize Black-owned businesses; The Black World Guide, put together by Miami-Dade County’s Black Affairs Advisory Board, lists hundreds, organized by geographic area.
• Individuals can’t change the access to capital issue alone, but many may have the means to become angel investors, at the early stage when even $25K can make a difference.

Research

Ecosystem-building has become a field, reflecting the job-creating power of high-growth, young companies. Building inclusive innovation ecosystems takes intent, as the playbook from the Kansas City Fed conveyed. Nationally, some of the best resources on equitable growth are coming out of the Brookings Institution’s Metropolitan Policy Program and the Kauffman Foundation.

Organizations on the ground

Several Miami-based organizations are working to make the tech and innovation ecosystem more inclusive.

• Venture capital firms and angel investment groups with funds investing in founders of color are based in Miami, or have strong Miami connections. These include Softbank’s $100 million Opportunity Fund, Reign Ventures, Lightship Capital, Black Angels Miami, and newly minted Black Ops Ventures.
• The Center for Black Innovation, aire ventures, Black Men Talk Tech, Black Girl Ventures, Digital Grass and Culture Shifting Weekends by Culture Shift Labs are among nonprofits working to support Black founders and make Miami a truly diverse innovation ecosystem. Black Ambition, a national prize and accelerator for entrepreneurs of color, is headquartered here, as are TechNolij and the Black Professionals Network.
• It’s not all about tech. The Miami-Dade Chamber of Commerce, the Haitian-American Chamber of Commerce, the South Florida Black Prosperity Alliance, and the ICBA World Network are some of the South Florida-based organizations where small and mid-sized businesses can find support.

Who are we missing? Let us know.

Andrew Sherry is a communications consultant. Learn more about his work here.

Photo (top) by nappy from Pexels. Opportunity Miami is powered by the Miami-Dade Beacon Council.