Startups and small businesses are now allowed to raise $1 million annually from small-dollar investors, which opens the doors to opportunity for businesses owned by women, veterans and minorities.

And why is this important? Because access to capital is a major barrier to growing a business and people of color have little family wealth they can use as capital. As the author puts it,

In my estimation, there are four ways to close the wealth gap.

  1. Obtain a “good job” and save your money, perhaps utilizing financial technology tools like Digit. Yet, this can take a lifetime or two.
  2. Receive an inheritance by a family member who made enough money in their lifetime to save, get life insurance and/or invest.
  3. Start a high growth business that scales, pays dividends and/or is acquired.
  4. Invest in a high growth business that scales, pays dividends and/or is acquired.

At Opportunity Hub and TechSquare Labs, we focus on the last two. Why? A study from the Center for Global Policy Solutions, “The Color of Entrepreneurship: Why the Racial Gap Among Firms Costs the U.S. Billions,” suggests that past and present discrimination inhibits the true growth of minority businesses. Without discrimination, 1.1 million new businesses could be established and funded. These additional companies could produce an estimated 9 million more jobs – increasing the nation’s economy by $300 billion.