From the Classroom to the Pitch Room: How We Can Advance Economic Progress for All

In October, Nasdaq held its inaugural Purpose Forum, convening thought leaders, change-makers and innovators to discuss how we can empower individuals to embrace their life's purpose, advance their economic growth and reach their full potential. 

In a thoughtful discussion with our partners, we discussed the barriers of access for women and people of color in both the investing and entrepreneurial space and how each of our partners is employing practical strategies to change the face of investing and entrepreneurship for the future.

Driven by Nasdaq’s Purpose to advance economic progress for all, the Nasdaq Foundation’s mission works with organizations that promote and support under-resourced communities by reimagining investor engagement and equipping communities with the financial knowledge needed to share in the wealth that markets create. 

We have funded and partnered with more than 25 nonprofit organizations through the Nasdaq Foundation’s quarterly grant program and our new investor initiative, providing access and resources to communities in need as they look to build and scale their business endeavors.

Changing the Face of Funders and Founders Today

Discussions at the forum highlighted the continued pertinence of the Nasdaq Foundation and its partners in bringing down the barriers of access that entrepreneurs of color, especially women of color, continue to face when it comes to capital allocation and financial literacy education.

Tracy Gray, managing partner at the 22 Fund, a venture capital firm that invests in tech-based manufacturing companies to create jobs in the U.S., saw the problem of unequal capital allocation firsthand. Of the 300 or so business proposals she received every month, almost none were from women or entrepreneurs of color. In fact, female entrepreneurs of color received just 0.39% of the $288 billion allocated by venture capital firms in 2022. 

“We're at the bottom of the list of where everyone puts their money...we are a rounding error of money that venture capital goes to,” said Gray.

According to Melissa Bradley, founder of 1863 Ventures, the lack of entrepreneurs of color is due to the negative narrative of risk surrounding them. As the founder of a Black-led business development nonprofit accelerator and venture capital fund, she strives to replace this false narrative with hard facts. 

People of color have a large potential buying power that could add billions of dollars to the U.S. economy. According to a McKinsey study, companies that can fill the needs of Black consumers could tap a potentially $300 billion market annually. Furthermore, in a Citigroup report from 2020, data suggests the American economy lost $16 trillion over the past 20 years due to discriminatory practices against people of color in the U.S. If these racial gaps were closed today, the country could see an increase of $5 trillion over the next five years.

These facts have led Bradley to dismiss the category of minority in favor of the new majority when discussing founders and funders of color, recognizing the growing demographics and market potential of people of color. 

The Nasdaq Foundation and its partners also acknowledge these hard facts, working hard to break down the barriers of access that prevent the tapping and scaling of these potential markets. 

Beyond investment, many panelists actively mentor founders to heighten their success rate. “We talk to all our entrepreneurs monthly...that is our job, not just to write them a check, [and] it actually helps mitigate our risk,” said Bradley. “By giving them ongoing access to mentors, to coaches...to really get in there and help them find temporary C-suite people, it helps us get our money back.”

Brian Hollins, co-founder and managing partner of Collide Capital, a Black-owned venture capital fund that invests with an intersectional lens, is a living example of an entrepreneur of color who received investment and mentorship from Bradley at 1863 Ventures and Kapor Capital, one of the largest Black-led venture capital funds.

As a result, Hollins’s fund believes exposure and partnership are the greatest ways to help his portfolio of more than 80% entrepreneurs of color, preparing them for investor meetings, helping with pitch decks and building up the confidence of these founders to help them scale their businesses.

Investing in the Founders and Funders of Tomorrow

While the Nasdaq Foundation and its partners are hard at work funding and mentoring entrepreneurs of color, they are also educating the next generation of founders and funders to uplift young people to take control of their financial futures. 

In addition to Hollins’s venture fund, he is also the founder of the Take Off Institute, a nonprofit helping Black undergraduates gain the skills they need to succeed in their young professional careers.

Meanwhile, John Hope Bryant, founder of Financial Literacy for All (FLA), is working to educate even younger people and uplift a new generation of investors of color. FLA is a 10-year national movement to embed financial literacy into American culture, reaching millions of youths and working adults.

According to Bryant, financial literacy is “the civil rights issue of this generation.”

Bryant himself is a benefactor of early financial literacy education. After the passage of the Community Reinvestment Act, a banker came to his school and taught financial literacy and entrepreneurship. Bryant used the knowledge spread by this act as a launching pad to grow a $30 investment from his mom into Promise Homes, the largest Black-owned single-family rental company in the country, valued at $4 billion, and the nonprofit Operation Hope, the largest financial coach in America.

Gray, like Bryant, is also helping to educate and scale new funders of color. Her nonprofit, We are Enough, is educating women globally, at every economic level, on why and how to invest in women-owned/led businesses and/or using a gender lens. 

Like Bradley, Gray also used data to pinpoint where she could have the most impact on changing the face of new investors. As women are 51% of the world’s population, she sees another new majority in women founders and funders. 

U.N. research indicates that increasing women’s wealth has an impact on all women, and women founders are 1.17 times more likely to start a social impact business. 

“Literally, the path to changing the world is through women and their wallets,” said Gray.

 
The Future of Nasdaq’s Power in Purpose

Throughout the event, speakers continued to emphasize the work that still needs to be done to break down barriers of access to spur and scale Black and Brown business and investment. 

As many of our speakers are products of successful entrepreneurship and mentoring initiatives in their youth or at the beginning of their businesses, they showed through living proof that breaking down these obstacles of access are not elusive or impossible, but transparent and attainable. 

“We're living in a moment in history, but history does not feel historic when you're sitting in it. It just feels like another day,” said Bryant.