Editor’s note: Three significant conferences focusing on black entrepreneurs are taking place in the Triangle this week and next. And each includes startups bidding for success as well as a variety of speakers and programs offering advice on how to succeed. WRAL TechWire assigned writer Chantal Allam the task of putting together an overview concerning the state of entrepreneurship in the minority community. Here is the first of two stories.

RALEIGHJalen Hatton knows first-hand the challenges facing African-American entrepreneurs today.

Back in 2016, fresh out of college, he founded a fintech startup in Raleigh called Grouptrade, an online platform for people learning how to invest in stocks and public equities.

“It was designed to help people traditionally underserved by the financial service industry, or just getting into the world of investing,” explains the 25-year-old, who used his personal savings — around $10,000 at the time – to bankroll the company.

By March 2018, however, his funds had dried up. Attempts at raising capital from outside investors proved futile, so he had to put his company on the back burner.

Jalen Hatton, community manager at Loading Dock. Credit: Emily Bennett of Chair 8 Media

Hatton’s story is not unique. It’s well documented that black founders often face disproportionate barriers to accessing funds.

The Winston-Salem native admits it wasn’t necessarily the only thing holding him back, but “there’s got to be some element of it.”

“There’s an added level of skepticism when a young, black entrepreneur walks into a room full of older, white male investors. That could be kind of frustrating at times.”

Angel investing in black entrepreneurs

Even though angel investing is growing in the Southeast, black entrepreneurs still appear to be lagging behind.

Last year, angel investors invested around $38 million in the Southeast – but only 5 percent of funds went to founders/CEOs who were non-white, according to a recent report released by the Angel Capital Association (ACA).

“I personally take this as a challenge,” ACA board member Elaine Bolle told a 100-strong crowd at RTP Foundation’s headquarters gathered for the group’s Southeast regional meeting earlier this month. “When you think of the racial profile of the Southeast, we have more diversity racially here. We should be able to capitalize on it.”

Interestingly, it’s one of the few studies out there tracking this trend, which is also a “huge problem,” noted another local black entrepreneur.

No doubt, this will be among the many hot-button issues tackled at the third annual Black Entrepreneurship Week, which is currently being held at the Sheraton Hotel and the Raleigh Convention Center.

WRAL TechWire photo

One of the Triangle’s success stories … SpokeHub founders (from left): John York, John McAdory, Robert Hartsfield, Richard Berryman and Terry Johnson.

But that’s not to say it’s all gloomy.

There will also be local black-owned business success stories to spotlight – like that of Jonathan Hayes, founder and CEO of Cary-based RewardStock, which landed a $320,000 deal with Mark Cuban on ABC’s Shark Tank last year.

There’s also SpokeHub, a Durham-based social media startup that raised $2 million from black angel investors in 2018. Its co-founder and head of business development, Richard Berryman III, is set to make an appearance at the conference on Thursday.

Walk West’s Donald Thompson, who runs one of the fastest growing digital marketing agencies in the Triangle, also appeared on a panel earlier the week.

He recently released his first ebook, A Business Leader’s Guide to Driving Diversity Inclusion in the Workplace. As an African American with more than 25 years in the industry and no college degree, it’s fair to say that he has a unique perspective.

“You can’t change the status quo,” he told WRAL TechWire at the time of the ebook’s release. “You’ve got to focus on changing who you are. You can’t wait for society to make the changes you seek. You have to create the environment where you can win in spite of things that are wrong. I’m hopeful that things like racism and bigotry will change and continue to evolve over time to a good point.”

Diversity in Triangle startup community events: Black Entrepreneurship Week, Black Founders Exchange, Black Wall Street Homecoming

The five-day conference is the first of three events coming up in the Triangle that are bringing more attention to diversity in the entrepreneurship community.

Also in the pipeline: the Black Founders Exchange, a week-long immersive accelerator program for black founders run in partnership with Google for Startups, which will run from Sept. 22-27; and Black Wall Street Homecoming, a three-day conference celebrating multicultural entrepreneurs from Sept. 25-27.

Cultural differences

For Hatton, however, lack of access to capital is just one part of the problem.

Culturally within the African-American community, as he tells it, starting your own business is not the done thing.

“Oftentimes, we get a side-eye, so to speak, or a weird look when you tell somebody that you’ve left your job to go out and create this company,” he says. “The idea of being able to create this startup out of an idea, and then go out and raise money and be this hyper-growth situation, is completely foreign to our parent’s generation, and even some folks in my own generation.”

Another common setback: many early-stage investors are expecting young startups to have already secured a “friends and family” round of investing before they’re willing to put any of their money down, he says.

Often that’s just not possible.

“In a lot of cases, our friends and family don’t have a lot of money to invest. Period. And even if they did, culturally the idea of doing something like that is not really familiar. That puts us at a notable disadvantage.”

Keeping the dream alive

But Hatton hasn’t given up. These days, he’s working as the community manager for Loading Dock’s new shared office space in Raleigh’s Prince Hall district, a historically African-American neighborhood.

So far, it’s the only co-working space on that side of town and it’s on a mission: to create a space that is more diverse and inclusive, creating “real opportunities” for entrepreneurs who don’t necessarily “fit the mold.”

“I want to take real swing at seeing if I can help be a catalyst for economic growth, not only within the Southeast part of Raleigh, but just within the black entrepreneurship community, in general.”

He’s also sees it as a personal opportunity. “[I want] to continue to solidify my network, and just my place within the broader startup ecosystem, as somebody who is well versed in the area of business development, and a trusted member of the community.

“There’s a lot of work to still be done.”

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