Investing In Black Businesses Should Drive The Buy Black Movement!

Bill HustonAlternative Finance, Community Capital, Crowd Investing


Maggie Anderson and her family made history and dominated headlines as global media covered their stand and study living exclusively off businesses, professionals, and products from the Black community for an entire year. The landmark study by Northwestern University’s Kellogg School of Business stand and study proved how an incremental increase in support for these businesses and entrepreneurs and the mainstream firms engaging them as suppliers, vendors, franchisees, and agencies can rescue the Black community and improve the American economy as a whole. I have heard the message of buy Black for my entire life, but today investment crowdfunding has added a new component to this conversation. 

What is Investment Crowdfunding?

Investment crowdfunding is a method of raising capital online from investors in order to fund a private business. In return for cash, investors receive investment ownership in the business. Investment crowdfunding happens on online platforms where businesses create profiles that include their pitches, financial statements, and other information. Investment crowdfunding is a revolution in early-stage finance that is changing the way the Black business communities relate to capital formation, real estate development, entrepreneurship, and job creation. Thanks to the passage of the JOBS Act of 2012, a new market is being created that will revolutionize how early-stage investing and community economic development works — It’s called Investment Crowdfunding!

The Economic Power Of The Black Professional Community

The Northwestern University’s Kellogg Graduate School of Management’s study proved that nearly 1 million new jobs could be created if middle-class African American consumers would increase their spending within their community from the current 3% to 10%. Maggie Anderson created a website to harness the power of technology and social media to empower the Black business community through conscious commerce and business development, but when you add the investment crowdfunding component to this equation it has the potential to reduce the lack of access to capital and reduce the racial wealth gap that plagues the Black-owned businesses and the Black community by adding an inclusive investing component that could lead to both individual and community wealth building. 

Wealth In The Black Community

The economic status of Black Americans remains far behind their white counterparts in terms of income, net worth, home ownership, stock ownership, business entrepreneurship, and other metrics, according to a new report from research and consulting firm, McKinsey Global Institute. The median Black household has a net worth of about $24,000, or about one-eighth the figure of $188,000 for white households. Black entrepreneurs, on average, launch their businesses with $35,000 in startup capital and loans, versus an average of $107,000 for White entrepreneurs. Investment crowdfunding has the potential to transform Black businesses by allowing Black professionals and the Black community, in general, to invest in Black-owned business which will increase the likelihood of spending with the businesses they have invested in according to research by Honeycomb Credit businesses that successfully crowdfund increase revenue by 60%. 

Key Takeaways 

Investment crowdfunding has the potential to be a game-changer for the Black business community and the Black community as a whole. Investment crowdfunding enhances the capabilities of the movement started by Maggie Anderson to make an intentional effort to invest and buy Black. This will require Black crowdfunding professionals and entrepreneurs to create the infrastructure and ecosystem to make this monumental evolution in how the Black community invest and supports the Black business community. If you are interested in learning more about this invest/buy Black movement visit The American Dream Marketplace!