Johnnie Turnage headshot
Johnnie Turnage is a Detroit native and founder of EvenScore. (Courtesy photo)

Once a week at Newlab at Michigan Central, a mix of startup passion, ingenuity and Black joy is brewing. 

I’ve been meeting up with fellow founders and developers to share pitch decks or anecdotes about investors. We may commiserate about the pain points of our entrepreneurial journeys. And we may champion someone’s latest deal with a big-name brand. This gathering has formalized into Black Tech Saturdays. The community that we have built as founders is supplying us with knowledge and access that many don’t have. It’s a necessary space for us to laugh, cry and celebrate together. 

What I didn’t know is that I would need to create such a space where codeswitching wasn’t required. I didn’t know that despite the progress with diversity and equity, I would still face bias within the investment process. Unfortunately, I’m not alone in what I perceive. Other attendees of Black Tech Saturdays have shared similar experiences. We find ourselves in close range to our dreams but out of reach.  

Our barriers to capital are not imaginary. A report by the U.S. Federal Reserve found that Black entrepreneurs were denied loans nearly twice as often as their white counterparts. Goldman Sachs’ Black Womenomics report cited that Black entrepreneurs are more likely to rely on more expensive personal credit card debt and personal and family savings. Lastly, according to Citi, if Black entrepreneurs had access to fair and equitable lending, those founders would have created 6.1 million new jobs annually. As Detroit’s startup ecosystem expands, the city’s Black and underrepresented founders must reap the benefits if Detroit wants to thrive.

Last year, Detroit was ranked the top emerging startup ecosystem in Startup Genome’s 2022 Global Startup Ecosystem Report. Entrepreneurs are taking notice, and policymakers should foster a tech hub like Luxembourg. The German city has proven to be a fertile place for European fintech companies, ranking as the fourth best fintech startup ecosystem in Europe in 2022 by McKinsey. Detroit has the same opportunity if it makes bolder commitments to the local tech sector.

So how can Detroit spark a BIPOC tech renaissance? 

First and foremost, we must narrow the capital gap by establishing funding programs. Develop financial support programs, specifically targeted toward tech companies by underrepresented founders, including grants, loans, and tax incentives. We don’t need to look far for inspiration. We already have a city-sponsored grant program for underrepresented entrepreneurs up to $100,000 via Motor City Match but only for brick-and-mortar businesses. If tech founders had an equivalent to Motor City Match, it would provide significant social and financial capital for them to grow. 

Secondly, city officials should streamline regulatory processes. Simplify business registration and licensing requirements and reduce friction that stems from bureaucracy. Small business owners need clear guidelines for compliance that are accessible to tech companies. One idea is to create a roadmap and host seminars outlining the steps to building a business in Detroit. In New York City, the Business Express Service Team (BEST) initiative has helped save local small businesses more than $22 million by avoiding fines and violations. The free program provides one-on-one expert support to help business owners save time and money navigating city government rules and regulations, as well as expedite permit and licensing processes.

Lastly, create policies and initiatives that promote equal access to funding and resources, diverse hiring practices, and entrepreneurship in underserved communities. Detroit can follow Philadelphia’s lead by centering racial equity as a governing principle. As a part of Philadelphia’s commitment to workforce diversity, the mayor’s office has created nearly 35 citywide DEI plans, one for each agency. The mayor also issued an executive order introducing a citywide racial equity initiative and mandating DEI training. 

Even as barriers persist, our hope and our hustle continue to persevere. I still see success stories taking place. In 2018, investor Dug Song sold his Ann Arbor-based cybersecurity firm to Cisco for $2.35 billion. More recently, the Metro Detroit Black Business Alliance received two grants totaling $800,000 to support Black small businesses. Livegistics, founders Justin Turk and Andre Davis, won a $1 million prize from artist Pharrell Williams. These examples inspire hope that Detroit can be more than just the Motor City. It can be the nation’s capital for Black founders.

Detroit’s success is tied to diversifying its economy and embracing tech. This is not just an issue for entrepreneurs of color; it is an issue for all of us. When we limit the opportunities of a particular group, we limit the potential of our entire society. So if you’re rooting for Detroit and Michigan to win, then champion local BIPOC innovators.

Johnnie Turnage is a Detroit native and the founder and CEO of EvenScore.

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