Global Diversity News takes a look at Access to Capital Among Minority Business Enterprises.
After taking a look at the “National Survey Access to Capital Among Minority Business Enterprises” 2015 report, I decided to write a review on its findings.
Here some basic information you need to understand before we dig in:
- 456 diverse businesses (mainly minority and women owned) responded to the report
- 93% of respondents identified themselves as black (44%), Hispanic (33%), or Asian/Pacific Islander (16%)
- 51% of the responding businesses have operated for 10 or more years
- 82% of businesses operate in the following industries; Professional Services (34%), Distribution/Manufacturing (18%), Software/Technology (17%), or Construction, Engineering, Real Estate (13%)
Initial Thoughts
Looking at the above statistics, I think the big data piece that jumps out is the fact that over 50% of minority owned businesses (in the survey) have operated for more than a decade. In today’s market, alternative investors prefer to focus on early stage investing. The simple fact that most surveyed companies have so much experience does decrease possible investment opportunities for certain angel and venture capitalist investors. With that being said, there is still a sizable market of “young” minority owned companies (33% of respondents had 6 years of experience or less) for investors to review.
There is also a positive sign in the types of established businesses. Without going into specifics, industries with quicker product-to-market capabilities are generally more appealing to alternative investors. Professional services and software/technology both have lower barriers of entry and account for 51% of operating surveyors. Distribution can also be seen as a fast to market idea that, with the right team, can access capital for growth.
All in all a good start in terms of possible opportunities for minority businesses.