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America is full of black entrepreneurs, just not rich ones. In 2012, the census estimated that there were about 2.6 million black-owned businesses in the United States, comprising about 10 percent of the nation’s total. But these firms accounted for only $150 billion in annual sales, less than 0.5 percent of all domestic business activity. The figures in the tech sector are similarly skewed. An oft-cited 2010 study by CB Insights found that less than 1 percent of venture-capital-backed startups have black founders, and black founders who do get funding tend to land smaller investments than their counterparts of other races. A separate study found that the funding for startups by black women was even more minuscule.
This is not a new problem for black entrepreneurs, who have often found themselves unable to access the funds needed to leverage emerging technologies for their own gain. “In a preindustrial economy, blacks could do without factories and technology and so forth,” says Juliet E.K. Walker, director of the Center of Black Business, History, Entrepreneurship, and Technology at the University of Texas. Some slaves were able to use skills such as blacksmithing, carpentry, or catering to generate money for themselves and their owners, in some cases establishing enterprises that allowed them to buy freedom for themselves and their brethren. But the Industrial Revolution, which allowed for businesses of unprecedented scale, created capital requirements that were out of reach for black people. “Black business was moved literally to the periphery of American business, where for the most part it has remained,” Walker says.