Members of the $100 million club, who will deliver on their promises?

In recent weeks, major companies have announced initiatives aimed at increasing racial equality. We were particularly interested in reviewing those targeting support for black-owned small businesses and black entrepreneurs. When reviewing the announcements, we decided to analyze them through the lens of (1) leadership (2) actions taken historically (3) outcomes (4) accountability.

There exist examples of companies that have invested in black-owned businesses, and we are using two of them as a framework to analyze the new entrants into this market.

We consider two examples as our frame of reference: Founders First Capital Partners and the New Voices Fund.

Founders First Capital Partners began operations in 2015 and offers strategic advisory services and funding to companies generating between $250K and $5M in annual revenues typically led by minority, military veterans, or woman founders. They offer Revenue-based investment (“RBI”), a form of business financing, distinct from the preferred equity structure most venture capitalists use and more flexible than traditional bank debt. FFCP has a $100 million credit facility to invest in these companies.

The New Voices $100M venture capital fund, created in 2015 by successful entrepreneur Richelieu Dennis in partnership with Unilever, targets women of color-led companies in the consumer and media industries. So far, the fund has invested $30 M in a total of 8 companies.


In the case of both FFCP and New Voices, they are led by black executives who have successfully navigated the entrepreneurial ecosystem. New Voices has a team of business executives who are experts in the area of consumer products and media. The fund was established after the successful sale of the Sundial Brands to Unilever who is a partner in this fund.

In the case of FFCP, the CEO and executive team are serial entrepreneurs with expertise in small business finance and strategy.

Actions historically:

Both companies already have well-established track records of serving black-owned businesses using different strategies.

New Voices is a venture capital fund, so they take an ownership stake in a small number of companies and provide them with large amounts of capital. Their goal is to sell the company at a substantial profit, and they leverage their extensive networks to find the most lucrative “exits” for their investments.

FFCP is a revenue-based investment company, which is a debt instrument that has more flexibility than a bank loan. They have the capacity to invest in over 400 companies in the near future and provide advisory services to thousands more. To date they have already provided strategic advisory services to over 300 companies.

Outcomes and Accountability:

Both FFCP and New Voices are accountable to their investors and are proving that investing in black-owned businesses is not only the right thing to do for achieving racial equality, but it is profitable as well.

In the case of FFCP, their strategic advisory program measures the impact of their program all along the way in the process. They measure increases in employment and revenue as well as improved profitability.

Now let’s turn this lens onto the new entrants in the market:

Bank of America: $1 billion including $100 million investment in black-owned small businesses

Bank of America was one of the most criticized banks in the country during the PPP (Paycheck Protection Program) as part of COVID-19 relief controversy, and some of the weaknesses exposed in that situation are still present and will be a barrier to effectively delivering on their commitment. During the PPP program execution, we observed that BOA favored funding larger companies to the detriment of small businesses, especially those run by women. BOA does not have the networks into small businesses, especially in communities of color. Until they rectify this structural and procedural shortcoming, they will not be able to deliver on their commitment. With BOA if they are able to change their networks and their processes, then the regular banking accountability measures will show results. However, without transparency and accountability to the public, we won’t know how effective this program has been.

PayPal $500 million commitment

PayPal announced a $500 million commitment in the form of investments through PayPal Ventures, the company’s investment arm, to support minority-led startups and businesses. PayPal has the advantage that it already has access to numerous small businesses run by people of color. However, the response to their smaller grant program was so strong that they stopped taking additional applications after a short time. Whenever there is a “first come, first served” or a rush to apply, we know that many worthy entrepreneurs get left out. That was one of the main problems with the PPP. PayPal plans to offer loans that can be repaid through its system directly, which will benefit PayPal by keeping the funding in their system. Anytime a range of programs are offered, it is less likely that the overall accountability of the program gets measured. This could be a missed opportunity considering the considerable database of black-owned businesses PayPal has access to already.

Softbank $100 million commitment

SoftBank, the mega venture capital firm, announced a $100 million Opportunity Fund that will invest only in companies led by people of color. Softbank is known for being the investor that catapulted Chinese startup Alibaba to success. It is more recently known for the collapse of its portfolio company WeWork. Softbank does not have a record of investing in companies led by black entrepreneurs, so its deal flow is not going to be as robust as a fund like New Voices or the smaller venture fund Harlem Capital or Portfolia’s Rising America fund. Also, SoftBank is known for making individual investments of $100 million, so they have no recent track record of investing in smaller businesses. However, if SoftBank partners with venture funds managed by people of color, they could rapidly deploy capital where it can have the greatest impact.

Magic Johnson $100 million in loans.

Famed LA Lakers legend Magic Johnson has pledged $100 million through a collaboration with MBE Capital Partners to provide loans to companies who were left out of the original PPP programs. They will rely on the Small Business Administration to help administer these loans. One characteristic of the PPP loans offered by the government was the opportunity that all of the loan could be forgiven if the company met certain criteria. It is unclear if the funds provided here will also have that opportunity to be turned in to grants and not paid back. This program could be helpful if it follows the procedures and allows for loan forgiveness, otherwise offering loans to companies struggling with COVID-19 disruptions will prove ineffective in growing black-owned businesses.


We have seen some large numbers put in headlines to grab our attention, but in most cases the companies are lacking the necessary leadership, the historic track record of engagement, outcome measurement and accountability.

To avoid the possibility of these announcements turning into just another form of diversity theater, there needs to be collaborations and systems put in place to achieve the goals of increasing racial equity for small business owners.

Originally published at



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