WASHINGTON – It’s been four years since James Bynoe’s firm, Zane Graphics Inc, was launched in Hyattsville. But, today Bynoe still finds his company starved of the resources to find the appropriate funding.
Bynoe thinks it’s because he is black.
“We have established our clients over the years,” Bynoe said. “But our operations have been hindered by the lack of capital to help us because we are minorities.
“Venture capital firms do not want to be associated with what they feel are `black companies’. We want to let them know that we are just like any other company. Any other white company,” he said.
It’s fledgling minority businesses like Bynoe’s that black lawmakers hope to link with the venture capitalists, as part of this week’s annual conference of the Congressional Black Caucus that started Tuesday in Washington.
The caucus cited data from the Milken Institute, a non-profit economic think-tank that said minority ventures have received just $2 billion of the $85 billion in equity capital currently available. This at a time, caucus members say, when minority businesses are growing faster in terms of both numbers of new firms and revenues.
The CBC hopes to bridge the gap with a private “deal room,” which it is setting up for the first time at this week’s convention. In it, pre-screened emerging growth entrepreneurs seeking equality capital will be able to pitch their companies to qualified investors, an effort that the caucus hopes will lead to minority business growth and job creation.
Rep. Albert Wynn, D-Largo, said venture capital is the “mother’s milk of business development,” but that minority businesses are typically overlooked by venture capitalists.
Wynn said it is a particular problem in the Washington suburbs, where minority entrepreneurs are trying to stake a claim in the high-tech business sector.
“In Prince George’s and Montgomery counties alone there are thousands of such minority entrepreneurs who continue to get no loans in spite of being credit-worthy,” said Wynn.
“However, minority businessmen will also have to start being more aggressive while pursuing their programs. We hope this program will help eradicate all these problems,” he said.
The executive director of the Howard University Small Business Development Center agreed that minority businesses have to be more aggressive about seeking venture capital. Malcolm Lewis Barnes said those businesses have grown dependent on commercial bank financing, Small Business Administration guaranteed loans and minority lending programs.
“These are the only sources of capital for minority entrepreneurs, which in turn hampers the overall growth of this sector,” Barnes said. “Sources of capital other than traditionally commercial debt financing must be developed for small and disadvantaged businesses to compete. We hope this program will serve that purpose.”
So does Bynoe, who plans to be making a pitch for his business in the deal room Thursday.