This Black Business Month, we had the privilege of sitting down with Dr. Wright, one of the Top 100 Crowdfunding Consultants in the United States, to explore how crowdfunding can be a powerful tool for building and sustaining Black wealth. Dr. Wright’s journey into the world of crowdfunding began in 2010, a time when the concept was just gaining traction, and her story is a testament to the transformative potential of this innovative funding model.
The Beginning of a Crowdfunding Pioneer
Dr. Wright’s foray into crowdfunding was anything but planned. “Back in 2010, before President Obama signed Crowdfunding into law, business owners were struggling to get loans and credit,” she recalls. It was during this time that two of her friends, both independent filmmakers, reached out for her help in raising funds. Dr. Wright, an early adopter of social media, already had a strong online presence with thousands of Twitter followers. Leveraging this network, she helped raise $35,000 for one film and $54,000 for another. However, it wasn’t until she observed a friend crowdfund a book that the concept of crowdfunding truly clicked for her. “I realized then that business owners needed this service,” she says. “When I began studying crowdfunding, there were only three books on Amazon, but I knew this was something I wanted to dive into and practice.”
The Funding Gap for Black-Owned Businesses
August is Black Business Month, a time to reflect on the state of Black entrepreneurship in the U.S. According to the 2020 census, there are more than 140,000 Black-owned businesses in the country, driving $141 billion in sales and employing 1.3 million people as of 2022. Yet, despite these impressive numbers, Black businesses often face critical underfunding. Dr. Wright believes this funding gap is rooted in systemic issues and a lack of knowledge about available resources. “Systemically, banks require much more before they will lend to a person of color,” she explains. “While a startup founded by a person of color may need to meet with 400 investors to raise $1 million, others can raise that amount by meeting with just 40 investors.”
This disparity highlights the importance of alternative funding methods like crowdfunding, which Dr. Wright sees as an opportunity to level the playing field. However, she notes that many business owners only know about platforms like GoFundMe, which aren’t designed for business use, and miss out on the broader potential of crowdfunding.
Crowdfunding as a Tool for Growth
For Black business owners and entrepreneurs, crowdfunding is not just about raising money; it’s about building a community of supporters, customers, and fans. “You have many more assets when you successfully crowdfund than if you were able to get a loan for the same amount of money,” Dr. Wright explains.
Unlike traditional funding methods, crowdfunding doesn’t require a good credit score or even a business plan. While there are still costs involved in running a successful campaign, Dr. Wright insists they are worth it. Crowdfunding stands out as a particularly fitting solution for Black business owners because it bypasses many of the barriers that exist in traditional funding.
“It’s a different financial tool that can allow you to get the funds for your business while growing your business profile in a positive way,” Dr. Wright says. The ability to raise funds without relying on credit scores or previous revenue makes crowdfunding an appealing option for those who have been historically marginalized by the financial system.
Building Black Wealth Through Crowdfunding
For Dr. Wright, the mission goes beyond funding individual businesses; it’s about putting wealth into the hands of the Black community. Crowdfunding, she says, offers exciting possibilities, particularly in real estate and family investments. “Crowdfunding can help you scale your income by introducing more products and services or updating your current offerings to be more competitive,” she explains. No longer dependent on a single investor, entrepreneurs can bring together a group to invest, start a business, or pursue other ventures.
Debunking Crowdfunding Myths
One of the biggest misconceptions about crowdfunding, according to Dr. Wright, is the belief that you can easily raise more than $10,000 for free by simply posting a campaign on GoFundMe. “People think the money will just magically come in, but it doesn’t work that way,” she says. Crowdfunding requires effort, strategy, and focus—something Dr. Wright emphasizes to every aspiring entrepreneur she works with.
Tips for Aspiring Entrepreneurs
When asked to share her top tips for aspiring entrepreneurs considering crowdfunding, Dr. Wright offered three crucial strategies:
1. Know Your Goal: “Know the exact amount you want to raise. Don’t just start a campaign to see how much you can get. Have a specific goal that is shared with everyone involved.”
2. Build a Team: “Crowdfunding is not a solo sport. Have a team in place to help you with different aspects of the campaign.”
3. Focus on Crowdfunding: “Crowdfunding is a full-time commitment. Many people fail because they try to juggle too many things while crowdfunding alone. Focus solely on your campaign, especially if it’s your first time.” These tips, though not what people typically expect, are key to avoiding the common pitfalls that lead to crowdfunding failures.
A Final Piece of Advice
When asked to share one powerful piece of advice with Black business owners, Dr. Wright was clear: “Make sure you know how to sell.” She stresses that sales are the backbone of any business, and without them, no amount of funding can sustain it. “You should be able to sell and hire people who can sell as well,” she advises. Dr. Wright’s journey and insights underscore the transformative potential of crowdfunding for Black entrepreneurs. By embracing this tool, Black business owners can not only secure the funds they need but also build lasting wealth and impact within their communities.
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