Business
Closing the African-American Startup Gap
Many African-Americans want to run their own businesses. Some surveys show that African-Americans are more interested in running their own businesses than whites. African-Americans are more likely to initiate the new-business creation process than whites although they are less likely to have an up-and-running business a few years later, according to the Panel Study of Entrepreneurial Dynamics, a representative survey of the adult-age population housed at the University of Michigan.
Despite entrepreneurial tendencies, African-American small-business ownership lags that of whites. White men run their own incorporated businesses at more than twice the rate of African-American men, and white women do so at more than three times the rate of their African-American counterparts.
Policy makers have historically relied on targeted minority-lending programs when seeking ways to close this gap, but these efforts have met with limited success. Now would-be entrepreneurs can take advantage of the new equity crowd-funding legislation to try a different and potentially better solution.