Ruth Umoh Forbes Staff
Diversity & Inclusion
I write about diversity and inclusion in and out of the workplace.
Brianne Garrett Forbes Staff
I'm the assistant editor for Forbes Women and Small Business.
African-Americans have played a profound role in shaping the U.S. business landscape. Technological innovations like the traffic light, automatic elevator doors and even caller ID all sprung from the minds of creative black luminaries.
To honor their business achievements this Black History Month, Forbes spoke to a number of founders, investors, activists, celebrities and experts on the black diaspora. What emerged from these conversation was a rich, complex portrait of black entrepreneurship, one that highlights the black community’s tremendous creativity, as well as a resilience that was born, in part, out of hardship and necessity.
Historically, black-owned companies, like Madam C.J. Walker’s hair-care line and the businesses that formed Tulsa, Oklahoma’s Black Wall Street, were developed in direct response to racial discrimination. “These segregation patterns then created market opportunities for black entrepreneurs to step in, make money and meet the demands of the black community,” says Mehrsa Baradaran, author of The Color of Money: Black Banks and the Racial Wealth Gap. With few work opportunities and high job instability, many black pioneers took matters into their own hands, building small enterprises that served and employed fellow African-Americans.
The black community’s long history of entrepreneurship is marked by ebbs and flows. The Reconstruction era, the period after the Civil War, saw a sharp rise in the number of black-owned businesses as the country attempted to right some of the inequities of slavery. But in the late 19th and early 20th centuries, the resurgence of Jim Crow laws enforcing racial segregation, coupled with the Great Depression, led to the decline of black entrepreneurship. “Black businesses were targeted and we saw a rollback in many of the advancements that were made previously,” says Tiffiany Howard, a small business and entrepreneurship fellow at the Congressional Black Caucus Foundation.
The rate of black business creation continued to rise and fall throughout the 20th and 21st century, increasing in the ’90s, dipping during the 2008 recession and rising again post-recession. In recent years, the number of black-owned businesses has risen dramatically, with black women fueling much of that growth. In 2003, Oprah Winfrey, arguably the most notable black female entrepreneur, became the first black American billionaire. And in just the last five years, four other African-Americans have reached the billionaire echelon.
But even with this forward momentum, black entrepreneurs still face a number of challenges: primarily, a lack of access to capital, says Ron Busby, president of the U.S. Black Chambers. “We have the acumen, the creativity, the knowledge and even the manpower. But without access to capital, our ideas come to a standstill, are stolen or are manipulated.”
Many of the black 2020 30 Under 30 list makers echo a similar sentiment in candid video interviews with Forbes, but they also note the black community’s collective ability to persevere against all odds. And in an effort to level the playing field for entrepreneurs of color, a number of corporations and wealthy black business leaders have created funds to invest in minority-owned companies.
Real estate tycoon Don Peebles announced a $500 million fund for emerging minority and female developers in June 2019, and banks like JPMorgan and Citigroup have launched initiatives and investment funds to support underrepresented entrepreneurs.
Still, much remains to be done both in the private and public sectors. “In order for there to be a great America, there must be a great black America,” Busby says. “And in order for there to be a great black America, you must have great black businesses and a great black economy.”
If history is any indication, black entrepreneurship will continue to grow and thrive in the coming years—an economic boon for Americans of all colors.
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Robert F. SmithSmith, the founder and CEO of Vista Equity Partners, made national headlines in 2019 when he pledged to pay off student loans for the entire graduating class of Morehouse College. He made his Forbes 400 billionaire debut in 2015 with a net worth of $2.5 billion.
Current Net Worth: $5 Billion
David Steward Steward once watched his car get repossessed from his office parking lot. Today, he’s the billionaire founder and chairman of IT provider World Wide Technology—one of the largest black-owned businesses in America. In 2018, Forbes named him a billionaire with a net worth of $3.4 billion.
Current Net Worth: $3.5 Billion
Oprah WinfreyThe media maven got her start in the entertainment and news industry, later morphing her hit talk show into a business empire. Forbes first listed her as a billionaire in 2003 with a $1 billion net worth.
Current Net Worth: $2.7 Billion
Michael JordanNot only is Jordan regarded as one of the NBA’s greatest players, he’s also the highest-paid athlete, thanks to his majority stake in the Charlotte Hornets and a Nike shoe deal. Jordan was first featured as a Forbes billionaire in 2015 with a $1 billion net worth.
Current Net Worth: $1.9 Billion
Jay-ZIn the words of Jay-Z, “I’m not a businessman. I’m a business, man.” Since hitting the hip-hop scene more than 25 years ago, the rapper has created a $1 billion fortune that encompasses liquor, art and real estate. He made his first showing as a Forbes billionaire in the spring of 2019.
Current Net Worth: $1 Billion