Newark, N.J., is an urban renewal success story — but only for some of its 280,000 residents.
As more and more people move into sleek new lofts downtown, and amenities like a new pedestrian bridge and urban park draw hordes more, a disparity has become abundantly clear: Newark’s minority entrepreneurs are being left out of all this development.
Lyneir Richardson, executive director of the Center for Urban Entrepreneurship and Economic Development (CUEED) at Rutgers University, recalls a flood of people knocking on the doors of the business school, asking for help accessing resources. “‘We’re not getting accepted to the local accelerators,’” Richardson says the school kept hearing — particularly from minorities and women looking to launch businesses.
Underrepresented entrepreneurs like the ones Richardson works with often have trouble breaking into the formal and informal networks that support startups. If you know someone who’s opened a small business you’re likely to get recommendations of lawyers and accountants who can help you. But the would-be business owners CUEED works with — about 70 percent of whom are black or Latino, and 60 percent of whom are women — don’t have that advantage, says Richardson.
They also tend to have more trouble accessing capital in the form of investments or loans, and they may need education on what their financing options are, he adds.
Rich in Resources
In many ways, Richardson is the perfect person to serve as a champion for these marginalized entrepreneurs. He was raised as the son of business owners in Chicago, where his parents owned a bar, a restaurant, and two specialty popcorn stores, and he grew up hearing about the bread-and-butter issues of running small operations.
Later, when Richardson was 27 and a lawyer for a large bank, he was assigned pro bono work helping identify candidates for loans in a tough area of Chicago. From the perspective of the bank, Richardson says, the neighborhood didn’t look promising. But he had a different view.
“I knew people who grew up there — I grew up there,” he says. Right then, he made a life-altering decision: “I wanted my personal mission to be seeing opportunity in people and places that others didn’t.”
From any viewpoint, Newark has a lot of potential. “This is an area that’s always been asset-rich,” Richardson says, with major air, shipping and rail hubs, several colleges and universities, and New York City right next door. The mayor, Ras Baraka, has championed local businesses and recently launched an initiative aimed at encouraging institutions like Rutgers and its employees to “live, buy and hire local.” But there remains a challenge — namely, making sure that all this opportunity is equally open to everyone.
Richardson attended the Kauffman Foundation’s inaugural ESHIP Summit in Kansas City, Mo., which gathered people from around the country who work to support entrepreneurs in their communities. A common goal, no matter where participants hailed from, was generating new ideas to build thriving ecosystems that connect people who want to start businesses with the resources they need to do so. For his part, Richardson came out of the summit with a couple of concrete ideas he hopes to put into action in Newark.
The first is a solution to a problem that many minority and female entrepreneurs face: They don’t know anyone who has thousands of dollars to lend them as informal seed money. At the Summit, Richardson heard about entrepreneurs using crowdfunding to raise that first round of funding. Richardson says he knows people in his community are familiar with crowdfunding, because it’s often used to raise money for funeral costs or other personal needs. “Can crowdfunding be broadly defined as a friends-and-family round for entrepreneurs of color?” Richardson wonders. He intends to find out.
After connecting with someone from Seattle who educates angel investors on how to evaluate small business investment opportunities, Richardson is thinking about launching a similar program in his city. His nascent plan: targeting people who have some history in Newark and might otherwise make a donation to an existing program, and instead trying to persuade them to invest in an entrepreneur who can create new value in the city.
“That’s something I heard that I cannot wait to try,” Richardson says.
This content was produced in partnership with the Ewing Marion Kauffman Foundation, which works in entrepreneurship and education to create opportunities and connect people to the tools they need to achieve success, change their futures and give back to their communities. In June 2017, the foundation hosted its inaugural ESHIP Summit, convening 435 leaders fighting to help break down barriers for entrepreneurs across the country.