Despite their resilience and innovation, BIPOC entrepreneurs frequently encounter systemic barriers that hinder their ability to start, sustain, and grow their businesses, particularly in New Orleans. Ultimately, this limited access to capital prevents their businesses from scaling and reaching their full potential.

In 2023, U.S.-based, Black-founded startups received less than 0.5% of venture capital (VC) funding, an alarming 71% decline from 1.5% of VC funding in 2022 (Accenture).
Black-owned firms are nearly twice as likely to be denied loans compared to their White counterparts, face higher bank fees, and are 3-5 times more likely to be labeled a high credit risk (Accenture)
In 2021, Black-owned firms generally had the highest credit application rates (42%), yet only 38% of their applications were fully funded. Meanwhile, 62% of White-owned firms were approved for the full amount of credit for which they applied (Federal Reserve).
In New Orleans, BIPOC entrepreneurs are half as likely as White-owned firms to receive debt financing via traditional bank loans (Greater New Orleans Startup Report).

The lack of venture capital is catastrophic both for Black business owners and for the economy as a whole in lost potential. So why does this issue persist? VC investors, who are largely White, often overlook Black entrepreneurs due to four common barriers (Harvard Business Review):

Pattern Matching Error: The VC disregards innovative market opportunities when they do not share the same background and experiences as the entrepreneur.
Disconnection: VC perceives the venture as unviable when they do not share networks or the entrepreneur lacks initial capital assets due to smaller or under-resourced networks.
Communication Gaps: Differing styles of communication, terminology, and cultural expectations cause misperceptions or limit access to opportunities. The entrepreneur may not yet know what to request or how to deliver that request to achieve optimal results.
Cultural Bias: The lender’s unconscious bias may undermine their trust in the applicant.

These common errors have a particularly negative impact on the food industry in New Orleans, a city famous for its vibrant restaurants that remain vulnerable to insolvency and contribute to food waste. In New Orleans, 7 of 10 restaurants have closed per year due to the highly competitive market, seasonal earnings, and low profit margins (The Advocate). While Black entrepreneurs in New Orleans invented much of our cuisine–from enslaved street vendors selling calas on Sundays to culinary icons like Leah Chase and Loretta Harrison–Black-owned food businesses have rarely reached large-scale success due to systemic racial barriers in accessing capital. Tourists travel across the globe to visit the French Quarter, where there are only 3 black-owned restaurants (Sun Chong, B Sweet Bistro and Bennachin's) in the 78-block tourist hub.

To nurture the sustainability of Black-owned small businesses in the food industry, we focus our Fund II resources on supporting restaurants and ventures that diversify their income through Consumer Packaged Goods (CPG) production. The CPG industry contributes to 8.7% of Louisiana's total employment, representing over 242,000 jobs and $13.1B in labor income (Consumer Brands Association). With strong agricultural partners and a national interest in New Orleans culture and cuisine, the CPG sector represents a high-growth field for local BIPOC entrepreneurs seeking to create thriving businesses that create jobs.

Equity Capital for BIPOC Entrepreneurs in CPG

Equity Capital for BIPOC Entrepreneurs in CPG