Empowering women and minority entrepreneurs is the key to strengthening minority communities, argues CEO and Founder of Lafayette Square Damien Dwin in a recent article for Financial Times.
True growth depends on economic justice, which will not be achieved, Dwin writes, until “people of colour and women have the chance to start and develop thriving businesses, building wealth for themselves and creating opportunities in marginalised communities.”
Lack of Diversity Negatively Impacts Growth
Persons of color and women are vastly under-represented among business owners and the investment industry, writes Dwin.
Of U.S. businesses that are big enough to have paid employees, only 2.2% are Black-owned, 5.8% are Latino-owned, and 19.9% are female-owned.
Out of middle market U.S. businesses (that is, those with revenues between $10 million and $1 billion), only 20,000 are minority- or woman-owned.
That is a “staggering” number, writes Dwin, given that there are 44 million Black people, 61 million Latino people, and 169 million women in America.
“Firms owned by women and people of colour manage a meagre 0.9 per cent of the industry’s more than $70 [trillion]in assets,” Dwin said.
Dwin argued that in order to achieve economic justice and allow for true progress and growth, “more women and people of colour need to become entrepreneurs and build businesses that can have a positive impact on communities.”
Female Leaders in Business Outperform
Companies with female entrepreneurial leadership have been shown to outperform in many sectors of their business and within their industries, a fact that the entrepreneura investment strategy capitalizes on.
Entrepreneurs typically build their businesses in sustainable models that not only create success for their company but also for the community that they grow in. This is particularly true of female entrepreneurs.
By “enabling talented people of colour and women to create successful investment firms that foster financial inclusivity,” Dwin said, communities, industries, and the economy stand to prosper and grow.
The entrepreneura SMA utilizes the company’s proprietary Entrepreneur Factor©, which relies on research and AI to identify top-performing entrepreneurial companies. The strategy inherently encourages diversity and allows investors to follow a fund strategy that aligns with their priorities and values.
For more news, information, and strategy, visit the Entrepreneur ETF Channel.