The Power of PR: Leveraging Media to Spotlight How Cincinnati is Working to Close the Racial Entrepreneurship GapAugust 22, 2023
In 2020, our country faced two unprecedented challenges: The COVID-19 pandemic and a national movement for racial justice. And while the pandemic deeply affected businesses of all kinds everywhere, racial disparity in business ownership has roots that run deep.
Across the nation, Black and Hispanic Americans make up over a quarter of the population yet own just 8% of the nation’s businesses (with employees). Even before the pandemic, more than twice the number of Black-owned businesses were in financial distress compared to white-owned businesses, according to a report by McKinsey & Company.
The same report estimates that achieving revenue parity for Black-owned businesses could add approximately $190 billion to the annual GDP. But thus far, federal efforts have failed to foster the entrepreneurial ecosystems that are so critical to fledgling businesses, especially amongst the minority community.
The Small Business Administration (SBA) and Economic Development Administration combined invested less than $40 million in programs that encourage this sort of ecosystem building, which is a fraction compared to the $23 billion in SBA loans disbursed in 2019.
Statistics support the efficacy of ecosystems. When entrepreneurs are surrounded by other innovators for collaboration and knowledge sharing — and have access to investors, suppliers, mentors, and customers — they’re much more likely to succeed.
The good news is coming not from the national stage, but from a groundswell of growth occurring in regional economies, like that of the greater Cincinnati area.
Ready at the right time
Nearly twenty years before the tragic death of George Floyd, Cincinnati was grappling with a racial reckoning of its own. The fatal shooting of Timothy Thomas, an unarmed Black teenager, by a police officer in 2001 — in the wake of several others — led to four nights of civil unrest. The tragedy was a wake-up call to city leadership that sparked various efforts to address the racial inequality and economic disparities identified as the root causes of the civil unrest.
One solution that came out of these tough conversations was the formation of the Minority Business Accelerator (MBA) in 2003, now headed by Darrin Redus as vice president and executive director.
Fast-forward to 2019. The MBA had been wildly successful in its first 15 years, overshooting its 2022 goals of 3,500 new jobs and $1 billion in additional minority business spending revenue four years early.
These wins attracted the attention of cities and mainstream chambers around the country, who came to Darrin for guidance and advice. The success stories also created great fodder for DCI to pitch, securing stories in top-tier publications such as The Economist and OZY. And with the “steady drumbeat of press, the phone kept ringing,” says Darrin.
One of those calls was from the Kauffman Foundation. Out of 750 applicants around the country, the MBA won the foundation’s $450,000 Inclusion Open Grant, which Darrin put towards building a “playbook” they could share with other communities in order to replicate the MBA model.
And then came 2020.
“At the peak of the national unrest, cities around the country were looking for a way to respond, and Cincinnati kept bubbling up to the top of the list,” says Darrin. “We found ourselves in a situation where we could be a model for other communities, born out of our own civil unrest from 20 years ago.”
Because the model — which is built on four pillars that strategically foster an entrepreneurial ecosystem for the minority community with strategy, capital, and connections — works.
Take, for instance, Vazquez Commercial Contracting out of Kansas City, which has expertise in public sector contracting work. They heard about the MBA through the Kauffman grant and reached out to Darrin, who recognized that Vazquez would be a terrific fit for the MBA’s “Attract” pillar, with the purpose of seeking out minority-owned businesses outside of the region to fill a particular gap.
With the MBAs assistance, Vazquez opened an office in Cincinnati. Since then, it’s formed five joint ventures with Cincinnati-based minority companies. They’ve already closed $45 million in government contracts and have a minimum of $300 million in the pipeline.
One of those companies was Journey Steel, a structural steel fabrication company owned by Barbara Smith, an African American businesswoman. Part of Smith’s growth plan for Journey had been attaining 8(a) certification for government contracts five years ago. The partnership with Vazquez was what finally unlocked the potential.
“The mentorship and partnership with Vazquez yielded immediate benefits, with three federal contracts within the first ten months,” says Smith, “all as a direct result of the guidance and support of Vazquez.”
Another African American woman who has found success in Cincinnati is Candice Matthews Brackeen, co-founder of Lightship Capital. She and her husband Brian Brackeen run the largest venture capital firm representing underrepresented founders in the Midwest. Candice says the press coverage DCI secured – like being featured in Black Enterprise and Entrepreneur — has helped boost their credibility.
“Investors all look to the press,” says Candice. “People now know who we are and what we’re doing, and they take it seriously.”
Being taken seriously means unprecedented opportunities for Lightship Capital, like a $5 million investment by the State of Ohio. It also means a strong influx of founders.
“We have a fantastic deal flow right now, and the press is why,” says Candice.
And because the press coverage is amplifying the strong, purposeful message Lighthouse is projecting, it’s attracting exactly the kind of companies Candice is seeking to fund. For instance, a group of women starting a teletherapy company reached out to Lightship first because they’d read of Lightship’s investment in the LGBTQ community and saw the firm as an ally.
“The more good press we get, the more good press our portfolio companies get,” says Candice. “This isn’t an ‘us’ story. It’s more of a ‘them’ story.”
As the successes build within the Cincinnati region, they’re rippling around the country … and into the future.
Darrin is helping shape national policy after the Brookings Institute reached out to him about co-authoring a white paper on federal funding for replicating minority business accelerators around the country.
Barbara Smith launched Journey Steel’s Soaring Impact pre-apprenticeship program, setting high schoolers on the path for a lifelong career. They’ve had eight students graduate so far and are continuing to grow the program.
And Candice and her husband are opening a space for entrepreneurs in the Frank Lloyd Wright House in the Cincinnati Innovation District.
“If you don’t make space, things don’t happen,” says Candice. “That’s what we’re trying to do.”
Through 6+ years of partnering with the Cincinnati Experience, DCI has leveraged the power of media to spread the word about the groundbreaking work happening there to make the city an inclusive, diverse, and thriving place where all entrepreneurs can succeed. When organizations like the MBA and Lightship Capital shine, they light the way for others and make a meaningful impact not just on the local community, but across the country too.