Initiative aims to eliminate barriers to Black entrepreneurs
By Maura Mazurowski
BridgeTower Media Newswires
RICHMOND, VA -- When attorney Venroy July evaluated how he can help combat systematic racism in America, he realized many issues of racial inequality are economically based.
“For most start-ups, their first round of funding is from family and friends. We know that in Black communities, the availability of that money is significantly less,” July said, who practices with Miles & Stockbridge in Baltimore, but works with the firm’s offices in Richmond and Tysons Corner, too.
July began noticing a trend in which Black business owners would come to him in need of legal assistance, but their “organizational documents were not together” or they would be wound up in contracts that were not beneficial to their company.
“The problem is… A lot of these (Black owned) companies were opting out of legal services to save a dime in the beginning, but it hurt them down the road,” July said.
Though he began brainstorming ways to assist these companies a few years back, July said that the death of George Floyd, a Black man who was killed by a white police officer in Minneapolis on May 25, catalyzed his firm’s eagerness to help.
And so the Black Business & Start-Up Initiative, aka the "Initiative,” was formed. The program, which extends across the firm’s Virginia and Maryland offices, aims to eliminate some of the barriers that are uniquely experienced by Black entrepreneurs, including lack of funding and lack of access to a legal network, according to the Miles & Stockbridge website.
The Initiative seeks to assist start-up companies and accepts applicants from businesses that are owned at least 50% by Black owners with either less than five years of operating history, less than $500,000 of annual revenues or less than 10 employees.
The program will offer businesses “the full spectrum of legal counsel necessary to develop and grow…from the general corporate and business legal services necessary to keep operations running smoothly” to more complex legal matters, including employment and general commercial contracting, according to the website.
Since its July 9 launch date, the Initiative has already garnered 64 clients from industries, including nonprofits, food and beverage, real estate and technology.
July laughed at how his firm is “trying to keep up” with the Initiative’s quick success.
“There has been such a rush of interest for this program... Getting through the intake process so far has been the most challenging,” July said, adding that he has been spending nearly three hours a day simply talking to prospective clients.
Each company that is accepted into the program can receive up to $20,000 in pro bono legal services, after which they can transition into a “low-bono situation” or become a full-paying client, July said.
“The idea is to assist companies to help them get off the ground and stabilize, and hopefully will ultimately be successful,” July said. “At that point we’ll start figuring out the next steps.”
Though the program is primarily seeking Black owned startups, July said they are open to taking on existing businesses, as well -- noting that just because a business has been around for years, that doesn’t mean it’s going to survive.
“The reality is that most Black businesses only have one employee and fail within five years,” July said. “Just because companies have been around for two years and have $30,000 in revenue, that doesn’t mean they’re successful. It’s good that they’re still around, but we want to help them be successful through traditional standards.”
As Black Lives Matter protests continue across the nation, the economic inequalities that African Americans face are becoming more clear. In 1968, a typical middle-class Black household had $6,674 in wealth compared with $70,786 for the typical middle-class white household, according to data from the historical Survey of Consumer Finances that has been adjusted for inflation.
In 2016 – the most recent year for which this data is available – the typical middle-class Black household had $13,024 in wealth versus $149,703 for the median white household.
July said that during this initial “big rush” of clients, he has become more aware than ever of the disparity in capital available to Black business owners.
“This is our effort to address the divisions of wealth in this country -- to do our part in rectifying past wrongs,” July said. “It has been an ongoing effort, and it won’t be something that just ends in 2020. [The Initiative] is a program that will go on for a while.”
