This Huffington Post story on black entrepreneurs and angel investment caught my eye a couple of days ago. I was particularly struck by the interview at the end with Lauran Bonaparte of Lauton Capital Group. In her response to the last question, she made a couple of statements that contradict what I’ve heard from many investors I’ve interviewed (primarily for Inc.’s Elevator Pitch column):
Q: If an entrepreneur stems from a background of poverty, poor education and the relational family is similarly situated, what steps can they take to overcome those types of challenges in getting their idea to a level of funding?
A: Wow. That’s a great question. I believe, in my experience, it’s all about the idea that you have. If you have a great idea and a great concept, you can overcome poor management in a myriad of ways. […]
While Bonaparte’s contention is that good ideas generally prevail, most investors I’ve spoken to and read have been quick to point out that they invest in promising people more so than even promising businesses. And how do they determine who is promising? By looking at who’s in their inner circle. Therein lies the rub for black entrepreneurs—most are nowhere in these investors’ social networks, so they have to work much harder to convince them to take a leap of faith. Women entrepreneurs face a similar (though perhaps not as stiff) dilemma, which has been discussed in many columns and conferences.
I also find curious the notion that good ideas outweigh poor management, given that there are several companies (e.g., eBay, Yahoo) that have lost their luster due to leadership woes. One prominent example is a little site that predated the likes of MySpace and Facebook but now is pretty much forgotten, at least in the U.S. (Otherwise known as Friendster.)
Often it seems to me that blacks in the entrepreneurial field are reluctant to bring up mentions of any barriers to success, for fear of sounding like whiners. I totally understand this concern. But it often ends up with them dismissing obvious points, such as those above, or worse, throwing out stereotypes about black people’s laziness. Thankfully, Bonaparte does not do the latter, but I’ve seen egregious examples along those lines. One horrendous guest post on The Black Snob, a blog that I otherwise enjoy, comes to mind. Many years ago, Inc. committed a similar sin—and it was rightfully lambasted by Earl Graves, the founder and publisher of Black Enterprise, for doing so.