The New Builders. Seth Levine
lack of access to entrepreneurial endeavors at least in part explains discrepancies in our society. More than 400 years of disproportionate treatment is a lot to overcome, and our country's long history of educational, economic, and societal inequality has had an enduring toll. The average White family in America has nearly 10 times the wealth of the average Black or Latino family. Many Black families who have established themselves in the middle or upper‐middle class are only one generation into that income and wealth class. Even for Black families who are climbing the education and income ladder, wealth lags. The average Black family where the head of household has a college education has less than one‐third the wealth of a similarly situated White family. That same Black family lags in wealth even compared to a White family where the head of household only holds a high school degree. Net worth across income brackets also lags significantly behind for Black families. This is true for every decile of income bracket from top‐earning Black families, who have one‐fifth the wealth of their top decile White counterparts, to the lowest 20 percent of earners, where Black families have around one‐quarter of the wealth of similarly situated White families.6
Most Black people have an idea for a business, Isaac told us. “Most of the people I know are trying to do something. If you're Black you have something else going on that you're trying to build – every Black person I know has a business idea, even if they don't have the means to make it happen.” In the broader culture, entrepreneurship, once a hallmark of American lore, is deemphasized in almost every aspect of our lives. Little of the entrepreneurial economy's reality or power is reflected anymore in our business media, pop culture, or politics.
The Great Disappearance
Many, if not most, of the top TV shows of the 1970s and 1980s were centered on people who owned their own businesses – George Jefferson, with his chain of dry cleaners, or Sam, the owner‐bartender of Cheers – or the lives of people who worked at the local business, like Alice. Even the lone heroes of our earlier pop culture were often self‐employed – like Marcus Welby, or Magnum PI. Who else would have the wherewithal to go off and solve a mystery or track down a killer, other than somebody who didn't have a boss to answer to?
Forty years later, after a long period in which much of the best pop culture explored the way that increasing corporatism and growing materialism was affecting American families – The Wonder Years or King of Queens – or went full‐out into dystopia or science fiction, you have to look hard to find entrepreneurs in today's pop media. There's the animated Bob's Burgers; or Atlanta, in which a Princeton dropout manages the hip‐hop career of his cousin; or the occasional self‐employed lawyer who turns up as the main character of a TV series. But many protagonists of today's hit shows either don't seem to have a recognizable source of income or are part of the larger corporate machine.
Pop culture reflects a lot more than just the norms of economic life. And a lot of great culture in the past few decades has explored the realities of gender, race, and sexuality hidden under the mainstream narratives of the middle of the century. Entertainment and culture also have become fractured so that fewer TV or movie producers are trying to capture the experiences of a broad swath of Americans.
But perception follows reality. Heroes, whether they're comedic, dramatic, or tragic, matter. And, while the majority of working Americans are still entrepreneurs – people working in or for small businesses – or people who have an entrepreneurial venture on the side, very little of our culture today reflects that. Neither does our support system for entrepreneurs reflect the reality of who they are or what businesses they're starting.
Meanwhile, people do keep going into business – just fewer and fewer of them. And in many cases, they're motivated by a passion that is at least on par with their motivation for material success, if not ahead of it. Many of the New Builders we profile blend a strong drive for business success with something beyond just money, whether that's a love for the land of their ancestors such as the Cheff family who operate a guiding business in The Bob Marshall Wilderness (whom we'll meet in Chapter 11), or becoming the first certified chocolatier in Arkansas, like Carmen Portillo (whose story we'll recount in Chapter 9). Many grassroots entrepreneurs start their businesses with an ulterior motive – something about their community or the world they want to see happen – and build a business around it.
Innovation, invention, and big dreams are what drive entrepreneurs. But those dreams can only be realized with some key ingredients, the most important of which is pretty basic: money.
It's About Capital. Hard Stop.
That Isaac was able to garner the outside capital he needed to get his start in business sets him apart from most aspiring business owners. The majority of American entrepreneurs don't have access to any outside capital to start or grow their businesses. Eighty percent of entrepreneurs lack access to either a bank loan or to venture capital, according to the Kauffman Foundation. This “capital gap” is a significant drag on US entrepreneurship and leaves would‐be entrepreneurs few options for funding their ventures. Almost 65 percent rely on personal and family savings for startup capital, and nearly 10 percent use personal credit cards for credit for their businesses. This has meaningful implications on who can access capital to start a business, especially when considered in the context of the racial wealth and economic gaps. It's also significant to the question of which businesses are able to survive, especially in times of crisis such as the Covid‐19 economic recession.8
Back in 2010, Chris Cain, a longtime community development executive and advocate for entrepreneurs, directed a small business development center for the Small Business Association (SBA) in Richmond, Virginia. She taught classes and helped workshop business ideas. About 80 percent of the people who came to the free classes were women of color.
Many had inspiring stories: they had left abusive relationships or were trying to put food on the table for children. With a talent or an idea for a business, they wrote business plans to get themselves off the ground.
It was brutal, Cain says. “You'd get an amazing business plan written and then go to a traditional bank and not get funded. I had no way of being able to help my clients get access to capital. They would have to save money or borrow money from friends.”9 In Chapter 8 we'll talk more about just how meaningful this discrepancy in access to lending capital actually is. Black and brown entrepreneurs are disadvantaged at every step of the process. They seek smaller loans than their White counterparts, they are turned down at higher rates, they receive less favorable terms, and they are more likely to be approved for smaller loans amounts. All of this is perhaps why Black and brown founders are less likely than White business owners to even apply for a loan in the first place.
When entrepreneurs launch businesses despite a lack of startup capital, they start out behind. In 2019, pre‐Covid, the JPMorgan Chase Institute found that in the typical community, 29 percent of small businesses were unprofitable, and 47 percent had two weeks or less of cash liquidity. Communities with a greater number of non‐White residents and lower home values had a higher proportion of unprofitable businesses.10
The Covid‐19 crisis laid bare how the United States was falling short in supporting this most critical segment of our economy and the foundation of our economic future. In fact, perception has traveled so far from reality that when the US Congress designed the Covid relief packages that were specifically meant to help small businesses keep employees, the legislation was written in such a way that it failed to include many independently owned restaurants and storefront businesses, which are, as a group, the economy's largest