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The divide

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Articles - July/August 2012
Monday, July 09, 2012
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The divide
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0712 TheDivide 02
From left, Ben Berry, CEO of AirShip Technologies Group, Jaymes Winters, president of Blue Leopard Capital, and Andres Montgomery, CEO of Dreem Digital. The three are among Oregon’s few African-American technology and investment capital entrepreneurs. “Venture capitalists need to take note,” says Berry. “If they are not talking to the African-American community, they’re leaving a lot on the table in terms of return on investment.”
// Photo by Anthony Pidgeon

“I’ve always been disconnected,” says Green, who grew up on Houston’s poverty-stricken south side, the child of a single mother with five kids. “We are all disconnected. And the problem we see across the country is that this is not just the pattern, it’s institutionally the way it is.”

The time has come to change the paradigm, says Green, whose speaking style is part Martin Luther King Jr., part Oregon Entrepreneurs Network. “If the United States wants to be globally competitive, we must connect the disconnected.”

To understand the problem Green is trying to address, start with a few facts about venture capital, job growth and African-American entrepreneurship. Last year, angel and venture-capital investors sank $52 billion into roughly 70,000 companies, according to data compiled by the Center for Venture Research at the University of New Hampshire and CB Insights, a New York private company research firm. A study by the Kauffman Foundation, a Kansas City-based group dedicated to entrepreneurship, also showed that young high-growth companies, those whose revenues grow quickly, were the primary source of new job growth in the United States.

The black community is not sharing in this new wealth creation. Between 2002 and 2007, black entrepreneurship spiked 60% compared to 18% in white America. But a closer look at these statistics reveals a gloomier picture: 1.9 million of those new black-owned businesses produced less than 1% of the gross domestic product, and 1.8 million were sole proprietors with no employees. “The reality is there has been zero job growth in black America,” says Green.

A 12-year Navy veteran, Green began researching black entrepreneurship in 2009 when he left his job as content editor at the Ashland Daily Tidings to start out on his own as a digital-tech entrepreneur, experimenting with 3-D gaming platforms for e-commerce. After experiencing first-hand the challenge of building a company and attracting investors, he began to delve deeply into the literature on black innovation. Some of the data confirmed what he already suspected: An entrenched achievement gap in American public schools meant African-American kids were ill-equipped to participate as job seekers or job creators in the rapidly expanding Internet and tech-based sectors.

Green also located one black angel group — “just one” — and found that all minorities combined represented only 4% of all angel investors nationwide.

“We do have innovators; we are very creative people,” says Green. What’s lacking are the mentors, the capital and the accelerators necessary for the black entrepreneurial community to grow. The venture-capital space took off in the 1960s, a time when African-Americans were still fighting for civil rights, Green says. Today, the black tech sector has yet to catch up. Lacking access to risk capital, Green says blacks are “in the valley of death.”

That kind of analysis resonates with Andres Montgomery, a 15-year Microsoft veteran and CEO of Dreem Digital, a Salem-based startup that builds mobile software for education. Montgomery also is one of Oregon’s few black tech entrepreneurs. “I’ve seen fortunes made and seen a lot of people sharing in the prosperity of the industry,” says Montgomery, who met Green last fall, an encounter that has since led to meetings with potential investors. “But I didn’t see that with African-Americans.”

Even when African-Americans succeed in the marketplace, they typically don’t invest in the technology space. Instead, the largest black-owned companies in the country revolve around cars, banks and entertainment — “industries that don’t return the kind of investment that technology does,” says Montgomery.

 



 

Comments   

 
Guest
+3 #1 Founder & ChairGuest 2012-07-09 22:34:54
This is a timely article on the need for investment in the black business community with an interesting twist what with the profilee being black in a prominently white section of Oregon. I agree he's on to something big in weaving so many seemingly disparate slices of the same elements together. I only wish oregonians would organize themselves around a table and agree to fund Project 21 parts by treating it as a whole rather than advising Green to break it down to attract disparate funders. The thing about funders is, when left to their own devices, tend to forget to value community responsibility as a equal weight to expected ROI. Green is showing how to gain a return on both sides of the equation. What he needs is to have the all prospective funding sources in the same room carving out which slice they want to fund as part of the whole idea as presented. Different times call for different approaches.
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Guest
+3 #2 PresidentGuest 2012-07-10 02:15:21
This provides a vision, which will open eyes of people like Mike who from K-12 are the future of this country. The census clearly shows the browning of America, we can no longer discount segments of our population as unnecessary. We must provide a pipeline into the capitalistic system, which powers our economy. Our children must see people who look like them enjoying the fruits of our economic system. Having a vested interest in it's success all parties will ride the economic tide that brings home all ships.

Jim Staton
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Guest
0 #3 HoustonianGuest 2012-07-18 05:13:22
The article was very informative and timely in this day and age. Good luck on this venture Mike Green.

Caroline A.
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Guest
+1 #4 Mark VonHolle - Board President, Sustainable Valley Technology GroupGuest 2012-07-18 06:41:09
Mike Green is one of the most gifted visionary and passionate civic minded professionals I have ever known. He is perfectly suited to eloquently articulate many of the social and underlying economic challenges facing disadvantaged communities across the U.S. His ability to build consensus among divergent groups is commendable. Mike is a genuinely humble servant leader and a great source of inspiration. Go Mike!!!
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Guest
0 #5 There's an app for that now!Guest 2013-04-09 23:03:55
I couldn't believe Apple accepted it, but there is now an app for supporting Mike's work.

Its premise is to connect "disconnected youth."

https://www.iculturekey.com/index.php/default/Curriculum
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