After a year of conversations with entrepreneurs, local investors and enterprise developers, I realized that there were — and continue to be — monumental gaps in accessing capital, resources, and networks for founders. This was the case especially for Black and Brown founders who were beyond the early startup stage.
Not only was there a gap in capital for second stage businesses, but there was a disconnect between investors and investing opportunities that had the social and local impact they wanted.
It was clear to me that a more equitable and inclusive entrepreneurial ecosystem was needed. That is why I founded Social Impact Strategies Group (SISG), which is now in its third year of helping entrepreneurs grow their businesses and investors to align their money and their values beyond philanthropy.
There are two realities in investing and entrepreneurship — sexism and racism. The rest is moveable. Many of the things we think we know are often assumptions we have been conditioned to think. SISG challenges conventional approaches to business development, social impacting, and inclusive economic development. For example:
Myth 1: Debt is the only option for financing. What we have found instead is that Black and Brown entrepreneurs are open to equity as a financing option. After we explain the power they have in negotiating equity terms, and that they can buy back equity, they are far more open to equity as an option for capital infusion.
Myth 2: A business needs to work 52-weeks a year, 24/7. My family time is important to me, and I do not want my team to get burned out. I built a business based on a 45-week year. Our society conditions us to think that if we take a break or a vacation, productivity suffers — despite research that disputes that notion.
To support a 45-week year, I have structured SISG’s revenue and production that allows me and my team to have seven weeks off during the year. We are modeling the change we want to see in the ecosystem. Women of color are the largest growing segment of entrepreneurs. The Minnesota ecosystem needs to do more to create resources and access to capital, particularly for second-stage entrepreneurs.
We cannot expect the ecosystem to change without financing it. Our country loves the benefits of its infrastructure — roads, libraries, schools — but doesn’t always want to pay for it. My vision is about enabling others, starting with myself, to innovate — throw things against the wall and see what sticks. Learn what works, and what does not. It is about trying, then adapting and adopting. Fail fast, and fail forward, because you cannot have success without failure.
Elaine Rasmussen is CEO of Social Impact Strategies Group, and has more than 20 years of experience in building transformational relationships and cultural competency in corporations, philanthropy, government, and nonprofits.