Research published by Sage Foundation reveals that underrepresented entrepreneurs in the U.S. – specifically in Georgia and California — face three key challenges to starting and growing a business. The challenges are lack of financial capital, lack of mentorship and limited opportunities for training.
Sage Foundation acts on Sage’s mission to knock down barriers for underserved communities. The Foundation researched the obstacles to successful entrepreneurship across six key groups in the United Kingdom, United States and South Africa: women, people of color, young people, people with disabilities, LGBTQIA+ people and migrants.
The Underserved Entrepreneurs Research report aims to understand the experiences of founders within these communities, who have historically faced inequities in accessing credit, capital and other resources needed to thrive. Against the backdrop of multiple global crises affecting small- and mid-sized businesses (SMBs) – including supply chain issues, fluctuating consumer spending, a cost-of-living crisis and a labor shortage — the insights from this study are critical to understanding how to level the playing field for all entrepreneurs.
Underrepresented entrepreneurs in the U.S. face the following challenges:
- Women in Georgia face an ongoing lack of access to start-up capital. They also have limited financial education and business management skills. Women generally have more care responsibilities at home. They are held back by cultural and religious expectations that prevent them from starting businesses.
- Young people often do not have access to the financial capital needed to kick-start entrepreneurial endeavors. This is made worse by having student debt and the lack of personal financial stability and generational wealth. They also require mentorship, guidance and networks to support their business ambitions.
- People of color are held back by a lack of helpful networks for capital and mentorship. Atlanta holds the highest number of Black-owned businesses (7.4 percent). Black households generally have less income compared to white households, leaving them with fewer opportunities to invest in a business.
- People with a disability in Georgia are unable to afford start-up capital. They also lack services and programs that are tailored to their specific needs. Research also identifies the lack of advancement opportunities, discrimination and hostile work environments as the main reasons for wanting to start a small business.
- LGBTQIA+ members often face discrimination and social bias. This makes it hard for them to secure the funding and guidance needed to realize their entrepreneurial ambitions. In Georgia and California, there is limited research on this community, qualifying the need for more focus in this area.
- Migrant entrepreneurs often don’t have credit scores and collateral, meaning they struggle with access to capital, training and skills. To make matters worse, language barriers also often hold them back. This is especially crucial for California. In CA, 42 percent of new companies are founded by immigrants. Some need language and legal training to scale their businesses.
Addressing barriers for underrepresented entrepreneurs
Cadence Willis, Vice President of Sage Foundation, said: “The barriers in the report are obstacles to both inclusive business and economic growth. The silver lining is that the solutions are interconnected. For example, linking entrepreneurs with mentors also increases their access to funding. Businesses and government must unite to empower underserved entrepreneurs through digital training, mentorship and financial resources.”
Since 2015, Sage Foundation has been providing fundraising and mentorship support to several partners. These programs include the BOSS Network, Kiva and Ashoka. They share the goal of addressing inequities for disadvantaged entrepreneurs across the world. This new research gives the Foundation a roadmap of where its resources may best be used in the future to help create a level playing field for all SMB owners, regardless of their background.
The report is based on aggregated insights from over 40 publications by academics, social scientists, think tanks and nonprofit organizations. To read the report, please go here. To learn more about Sage Foundation, please visit: Sage Foundation – Charity Support | Sage US
About Sage Foundation
Sage Foundation has been knocking down barriers in our communities since 2015. By mobilizing our colleagues, partners and customers through impactful programs, Sage Foundation is helping underrepresented entrepreneurs to grow their businesses while equipping the entrepreneurs of tomorrow with the skills they need to succeed.
Sage exists to knock down barriers, so everyone can thrive, starting with the millions of small and mid-sized businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitizing business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights.
Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis. Through our partnerships with organizations such as the BOSS Network, a community of Black female entrepreneurs, Sage is committed to creating a more equal working world.
Take action to reduce barriers and create gender and race equity.