In a panel discussion hosted by Amazon’s Black Business Accelerator and Boss Women Media, CEO founders Melissa Butler of The Lip Bar and Kendra Bracken-Ferguson of BrainTrust Founders Studio discussed the environment many Black business owners currently find themselves in. “In 2020, people were fawning over Black businesses. Then 2022 happened, and the tide changed,” Butler recalled. The reference points to the surge of support for Black entrepreneurs in the early era of the pandemic and the decline that shortly followed.
Bracken-Ferguson, whose business guides entrepreneurs to successful exits, echoed this sentiment. Addressing an audience of 100 Black founders, she highlighted the challenging reality of reduced valuations due to declining support. “The unfortunate truth is, now may not be the best time to sell your company,” she said, “we’re just not in that space.
As owners of multi-million dollar grossing brands, Bracken-Ferguson and Butler’s insights are based on objective market realities with no intended social or political bent. But their assessment provokes more critical exploration into the conditional nature of mainstream support for Black businesses. And, more broadly, the polarity in backing for Black social, political, and economic advancement as a whole.
For ESSENCE, I looked back at the conditions that spurred the period of unprecedented support in 2020, why, less than four years later, that support has so dramatically waned, and how it tracks with the consistent historical pattern of Black advancement and inevitable backlash.
The Catalysts: America’s Racial Awakening
2021 was a historic period for Black startups, with venture capital funding for founders reaching $4.9 billion. The milestone, however, occurred against a dark landscape characterized by rising death tolls from the global pandemic and a wave of violent racial fatalities, including the murders of Breonna Taylor, Ahmaud Arbery, and George Floyd, sparking widespread protests and calls for racial justice.
Simultaneously, in the early months of the pandemic, the US labor force contracted by 8.2 million people, and among those who didn’t lose their jobs, 48.7 million “non-essential” workers shifted to work from home.
As our world’s ground to a halt, the masses were jolted into a disorienting reality, giving many a rare opportunity to engage with our thoughts and feel our feelings in ways the chaotic rhythm of our pre-pandemic lives seldom allowed. The culmination of the pandemic and undeniable demonstrations of arrant disregard for Black lives, at a time when we had the capacity to pay attention, resulted in a shift in consciousness. For a while, it felt like authentic progress. What resulted was a “racial awakening.”
A Moment in the Sun: Black-Owned Businesses Shine in 2021
As America was forced to confront its history of violence, social, and economic oppression systemically imposed on Black Americans and its resulting adverse effects, a shift towards supporting Black owned businesses occurred.
The surge in interest was immediate, as evidenced by a remarkable 7,000% increase in interest for Black-owned businesses reported by Yelp. Industries such as bookstores, boutiques, and coffee shops saw significant growth as platform queries for Black-owned establishments skyrocketed to over 2.5 million between May 25 and July 10 of that year. It was a proverbial land of milk and honey for many. “So many Black business owners experienced their best sales periods ever during that period,” Butler recalls. But the upward trajectory wouldn’t last for long.
Optimism Eclipsed: A Stark Reality Sets In
As the momentum of social justice movements subsided and market conditions worsened, by the end of 2022, those gains were lost. The resulting decline in financing for Black businesses, was staggering and swift, dropping 45% in 2022. The downward curve represents the most significant year-over-year decrease for Black entrepreneurs in ten years. As momentum diminished, traffic to Black-owned businesses, both in-person and online, also declined. The surge of support and drastic plummet is a familiar theme.
From Progress and Backlash: A Historical Lens
From Reconstruction to Jim Crow, from Obama to Trump, the cycle of symbolic progress followed by tangible backlash is historically predictable. It’s unfolding around us in real-time. Whether in so-called anti-woke movements, backlash against diversity, equity, and inclusion (DEI) efforts, or, in this case, diminished support for Black-owned enterprises, one thing remains clear, America’s embrace of diversity is historically conditional.
The glimmer of hope revealed in 2020 was an authentic and potentially profound catalyst in a unique moment of heightened consciousness. However, progress rooted in “white guilt” is unsustainable; it’s too readily given to awareness fatigue, too easily baited by discord intentionally sown.
The consistently inconsistent regard for Black lives is a repeated history that, for many, demands suppression. But, for a generation of Americans confronting the dynamic for the first time, it brings an awareness of racially fraught dynamics, a lesson on the importance of historical context, and a realization of the necessity to address equity on dual fronts — continually pushing America to fulfill its promise, while also building, maintaining, and supporting our own.