The Real Cost of Entrepreneurship for Black Founders
- RoShawn Winburn
- 2 days ago
- 5 min read
Entrepreneurship is often hailed as a key driver of wealth creation, yet for many Black founders, it has become a path fraught with structural barriers and financial sacrifice. As side hustles and entrepreneurship is romanticized on social media, it’s critical to shine a light on the real cost of entrepreneurship in Black communities and the bold solutions being built to close the wealth gap.
The Wealth Gap Is a Business Barrier
According to the Federal Reserve, the median net worth of Black households in the U.S. remains less than 15% of their white counterparts. For aspiring Black entrepreneurs, this wealth gap translates into limited startup capital, fewer personal assets to leverage, and increased vulnerability to economic shocks.
Black entrepreneurs are also three times more likely to have their loan applications denied compared to white peers, even when controlling for credit scores and revenue (Kauffman Foundation, 2023). Without generational assets or access to low-cost capital, many Black founders bootstrap their ventures with personal savings, side hustles, or high-interest loans, placing them under immense financial strain before their businesses even gain traction.
In response, some Black entrepreneurs are turning to cooperative business models that prioritize shared ownership, community investment, and democratic governance. These models distribute risk more equitably and can create more sustainable outcomes.
Local examples include:
Shared retail spaces, where multiple entrepreneurs split costs and increase visibility.
Worker-owned cooperatives, enabling employees to build equity and shape operations.
Community investment funds, allowing neighbors to directly support Black-owned businesses in their area.
Building Intentional Support Systems
“We’ve moved beyond networking to real-world wins.”— Belinda Stenson, Director, Minority Business Partnership, Dayton Area Chamber of Commerce
Support institutions are adapting to deliver more intentional, outcome-driven services. The Dayton Area Chamber of Commerce has expanded its 15-year-old Minority Business Partnership (MBP), which traditionally served scalable businesses over $1M in revenue, to now host the Minority Business Assistance Center (MBAC), serving a broader base of small business owners.
“We’ve expanded our services to support even more diverse businesses,” said Stenson. “The addition of the MBAC program to our portfolio provides a one-stop shop experience for small businesses in the Greater Dayton Region. We’re building intentional pipelines—connecting diverse-owned businesses to procurement opportunities, capital partners, and mentorship.”
This approach shows what it means to move beyond just making connections and start building real support systems that help close long-standing gaps in access and opportunity.
Accessing Capital Through Grants & New Vehicles
While traditional financing often falls short, non-dilutive capital options, like grants, have become a lifeline for underfunded founders. Unlike venture capital or private investment, which often require founders to exchange a stake in their company for financial backing, non-dilutive sources—such as grants, pitch prizes, forgivable loans, or crowdfunding—enable founders to retain full control of their vision and future profits. This is especially important for Black entrepreneurs, who often begin with less generational wealth and fewer investment networks. Non-dilutive capital provides critical breathing room to test ideas, build infrastructure, and generate revenue without the long-term cost of losing ownership or decision-making power. In ecosystems where access to capital is already unequal, non-dilutive funding helps level the playing field.
In 2024 alone, over $742,500 in loans and grants were awarded to 140+ Black- and Brown-owned businesses in the region, thanks to organizations like the Minority Business Assistance Center, Miami Valley Urban League, and Minority Business Partnership.
Still, many business owners miss opportunities due to lack of visibility.
“Most of the time, business owners find out about a grant after the deadline has passed,” shared Juanita-Michelle Darden, Director of the Greater West Dayton Incubator (GWDI). “There’s a growing call for more outreach, simplified applications, and culturally competent technical assistance.”
Darden serves as the director of the Greater West Dayton Incubator (GWDI), where she leads the Cultural Capital program—an initiative that invests directly in the creativity, innovation, and lived experiences of entrepreneurs from Dayton’s historically marginalized neighborhoods. Instead of relying solely on traditional business metrics, the program values cultural knowledge, community trust, and resilience as essential building blocks for sustainable ventures. Through a combination of grants, workshops, and mentorship, the Cultural Capital program supports entrepreneurs in transforming their personal stories and skills into marketable products and services. It’s a model that bridges culture and commerce while honoring both the legacy and the promise of West Dayton’s entrepreneurial spirit. GWDI is currently accepting applications for funding.
The Economic and Community Development Institute (ECDI) is one of the largest microlenders in the country, helping small businesses in Ohio access the funding and training they need to grow. Through its microlending program, ECDI offers flexible, low-barrier loans—often between $500 and $350,000—to entrepreneurs who may not qualify for traditional bank financing. But ECDI doesn’t stop at funding. Their programs include hands-on business training, one-on-one advising, and support with business planning, marketing, and financial management. This combination of capital and coaching is especially valuable for underserved entrepreneurs, providing the tools and resources needed to launch, stabilize, and scale their businesses with confidence.
From Visibility to Ownership, Access & Accountability in Entrepreneurship
While headlines often celebrate the rise of Black entrepreneurship, the deeper story is one of resilience, innovation, and collective action in the face of systemic exclusion. True equity requires more than just visibility. It demands Ownership, Access, and. Accountability.
Ownership means more than having your name on the paperwork. It’s about controlling the direction, profits, and legacy of your business. For Black entrepreneurs, true ownership has often been limited by predatory lending, lack of capital, and barriers to legal protections like trademarks or real estate. Building pathways to ownership is essential for creating long-term stability and generational wealth. Without ownership, businesses may generate revenue, but the value they create doesn’t stay in the community.
Access is about more than just opening the door—it’s about removing the barriers that make it hard to walk through. Access to funding, contracts, training, and networks remains deeply unequal. While programs and grants are growing, many still have eligibility requirements, application processes, or outreach strategies that unintentionally exclude the very people they’re meant to help. Real access means meeting entrepreneurs where they are, providing culturally competent support, and ensuring the systems that offer opportunity are built with inclusion at their core.
Accountability ensures that equity isn’t just a buzzword—it becomes a measurable outcome. Institutions that support entrepreneurship, from banks to chambers to city governments, must track who benefits from their programs and adjust when disparities show up. Accountability also means listening to Black business owners, not just surveying them, and sharing power in decision-making spaces. When communities and institutions hold each other accountable, equity shifts from being an aspiration to a shared responsibility.
A Call to Action
As the gift-giving season nears, don’t just celebrate Black-owned businesses—help them grow.
Shop intentionally and often
Mentor, fund, or amplify a local Black founder
Advocate for equitable procurement and funding policies in your workplace or government
Entrepreneurship shouldn’t come at the cost of generational wealth. It should be the vehicle to build it.
