Strengthening the Small-Business Support System

[Music] [Music] [Music] [Music] [Music] hello everyone i'm susan solny a contributor to atlantic live and we are so glad all of you have joined us for the second day of our annual atlantic festival today's forum is going to cover an issue many of us have been thinking about and been concerned about during the pandemic the plight of small businesses the pandemic's economic devastation disproportionately impacted communities of color but despite the crisis we saw a record surge in minority-owned small business creation so how can we make sure that as we build back these businesses not only survive but continue to grow we want to thank our underwriter paypal for their support of the atlantic festival and our journalism here at the atlantic and we want to remind all of you at home that you can participate in the conversation via the q a tab please tell us where you're from and if you ask a question we can add it to the conversation now let's get started with our first session for a conversation on the federal response please welcome isabella casillas guzman the u.s small business administrator and derrick thompson staff writer at the atlantic hello administrator guzman welcome i want to talk about the pandemic entrepreneurship small business and i want to do this chronologically so can we start at the beginning of the pandemic tell me what happened to small and medium businesses in early 2020 and how much the government responds in march 2020 april 2020 helped to stash the bleeding yes thank you so much it's a pleasure to be here you know i was in california at the time leading on small businesses and innovative startups in the state and was able to witness firsthand really the you know the impact that covet 19 has had on our small businesses from the get-go uh you know many small businesses especially those hard hit impacted businesses that had to figure out how to close and work around with new operations or new ways of reaching their customers you know we're highly impacted um obviously taking huge hits on their revenues and in their you know recent surveys i have shown that from the very beginning small businesses have continued to struggle and recent surveys show that still two-thirds of small businesses um said the pandemic had that moderate or large negative effect overall on their businesses so what we saw was a lot of early closures for health and public safety measures that we saw through states throughout the country having an impact on the small businesses today you know we see that a lot of those businesses are still feeling the impact from the revenue but what was important was that the federal government stepped in quickly as along with many states to provide immediate relief to small businesses and that was that ran the full gamut of trying to help support them as they adopted e-commerce and digital strategies try to support them as they figured out how to reopen safely for their workforce and give them that technical assistance that they needed and of course the financial relief which was really critical the paycheck protection program an 800 billion dollar program that was able to keep businesses open and their employees uh on payroll and so that was uh you know one of the really important steps for small businesses to make that critical decision to to keep on trying to keep on trying to survive during the time while we still battled uh covet in the early stages as it evolved in businesses and it lingered on i think that's what was uh a continued challenge for small businesses they had to either you know shut down their operations multiple times the surges continued to impact their local communities they saw changes in behaviors consumer behaviors as the kova pandemic changed and people were either concerned about going out or more willing to go out and as that fluctuated they really needed additional support so the covet idle program for example and all those local and state grant programs is what really provided them additional capital to keep their businesses open and continue to try to pivot and adapt as we saw so many of them do i think technology really played a really key role in at least three out of four businesses that they adopted some sort of new digital tool they had to figure out how to redefine their main streets they became digital main streets and they wanted to figure out new ways how to connect with their businesses with their small businesses around them so that they could together figure out ways to reinvigorate local economies together yeah can we talk a little bit about what kind of businesses struggled the most i i wrote a lot i remember in early and mid-2020 about food in the food services industry and so i can imagine a couple very different sort of businesses that might have very different outcomes in the pandemic so you take say a a bar that doesn't have a lot of interior ventilation which is clearly going to struggle given the lockdowns given the intelligence that we have now about how this virus spreads then you have some businesses that might be somewhat in the middle maybe like a fast casual restaurant that still found a way to use technology to deliver their food and then you have businesses that it seems to me did quite well in earl in the in the early small businesses they did quite well in the first few quarters of 2020 like like grocery stores uh not all grocery stores to be sure but you had lots of people who weren't going to restaurants as often so they were going to grocery stores more so um that's just sort of the breakdown that i remember reporting from within sort of the food services industry but can you give us a sense of where we really saw the crunch who really suffered uh among small and medium businesses in 2020 versus some other categories that that were more resilient and we saw the travel and tourism businesses obviously highly impacted so our hotels and then all the related food and beverage businesses retail that was dependent on on the attraction of tourism as well they were all impacted gyms and salons from hair salons to nail salons all of them had some incredible impacts as people were more cautious about going out into those environments uh just the consumer behavior or as local governments had to respond to public health crises uh and uh for some closures and so those businesses obviously had the longest period of time where their revenues were impacted and and not only that but a lot of the smallest of the small institutes who could not navigate and get relief the sole proprietors or the small employers who just didn't have those right connections and i think that's what you started to see as we progress through is is really a recognition and the biden harris administration in particular of course has been really focused on making sure that the smallest of the small entities across these hardest hit sectors and broadly were able to access relief to position themselves to survive the pandemic and move beyond into thriving in addition our underserved communities people of color and women saw disparate impacts always our veterans in rural and low-income communities have historic barriers that limited some of those connections needed to access relief so in 2021 we really tried to focus our efforts in the biden-harris administration on ensuring that we could get released to all of our businesses and tailored the ppp programs to make sure 96 of the funds in ppp in 2021 went to those businesses that were smaller 20 employees and under uh with really high impact in rural and low income communities as well yeah i'd love you to be specific on this point you know historically minority owned businesses have struggled during recessions they've had less access to emergency capital for a variety of reasons they're often overlooked by policy makers in washington d.c what is the biden harris administration's plan or ongoing policy toward ensuring that minority owned owned businesses aren't overlooked again even as delta continues to impact their business yeah immediately of course the there's a heightened interest in trying to make sure that connectivity is there because a lot of times it meant if you didn't have that already existing banking relationship or a great cpa or a lawyer to help connect you then that's when you lacked that relief so with the american rescue plan of course the priority on public health and making sure that we could battle covet 19 to reopen our small businesses with number one but in addition the 60 billion dollars of investments really helped our high impact industries as well as created the community navigator pilot program and this is a 100 million dollar pilot that we're soon to be launching um across the country as well with with trusted local partners and national partners who can better connect authentically to these communities to make sure that they have all the technical assistance and the connectivity to the ecosystem to make sure they get capital and get relief and are positioned for success because those inequities in our economy and those inefficiencies frankly with those barriers to capital and opportunity have limited too large of a segment of our entrepreneurs and that is detrimental to our economy so we are hopeful that with the uh with that program as well as the real focused design across all of our programs on making sure that we're meeting all of our small businesses where they are and that means you know the correct outreach of course but in the design making sure that it fits the needs of our small businesses we're really pleased of course that uh with covet idol and the restaurant organization fund that we've been able to really tailor these programs to to better serve all our diverse communities and underserved businesses yeah the full story of small and medium-sized businesses in 2020 and during the pandemic it is one of crisis and response but it's not just one of crisis and response we also saw a historic surge of business formation in 2020. tell us a little bit about what factors you think have contributed to that surge and what the state of that surge is right now again i would add we continue to see that surge in in 2021 just the first quarter we saw three million new business applications and that's the 60 increase over last year in fact and so we're continuing to see businesses or businesses formed to take advantage of opportunities for growth or to reposition themselves in the marketplace you know i think that uh you know with with especially the investments and building back better and the bipartisan infrastructure deal we can see that there are a lot of opportunities for small businesses to innovate for small businesses to help build infrastructure to make sure that they're part of the supply chain resiliency and we're positioning all of our programs to make sure that those businesses can access those opportunities but also have the capital that they need to position themselves and so within the reconciliation buildback better agenda we're seeing keen investments in uh opportunity advancements for small businesses around capital access lending investments giving sba some authority to do direct lending and fill those gaps in the marketplaces and make sure that small businesses have the capital they need to go after those federal contracts to go after those opportunities in the supply chain the private sector as well and to be able to fulfill their american dream of entrepreneurship as they look for opportunities during this pandemic yeah it seems to me that a huge contributor to the rise of business formation to this sort of new and surprising and wonderful in many ways surge of entrepreneurship isn't just the fact that crises can be sort of liquid moments of history where people start new things it's also the fact that i think the remote work revolution has encouraged a lot of people frankly probably a lot of knowledge workers or at least people interested in starting companies that are adjacent to internet products to say well you know i'm here i'm sitting at home i'm working alone i might as well work for myself alone maybe i can maybe i can start something sometimes those people had been laid off or furloughed but sometimes they were still employed and they just had an idea that they went out and god um i'm fascinated by the remote work revolution i follow it very very closely i would love to know what you think about the remote work revolution and the degree to which you think that this sort of uh that this new norm for knowledge workers not all workers but some white-collar workers um the degree to which you think that this new norm will be a continuing norm that will survive hopefully uh the delta surge in the pandemic i think it's been proven out and i think it'll continue to uh change the landscape of small business and entrepreneurship for sure i mean we saw such increased rates of sole proprietor uh formation as well i mean so people are trying to figure out how they can rethink their work and rethink what their contribution is uh in their professional lives and so you did see a lot of people you know shift away from their their current jobs or even industries to try to rethink what they would want to to do during pandemic and post um of course and especially with women of course women are starting businesses at the highest rates and uh with those uh you know with those changes and and the child care impact and the education impact during covet a lot of them had to rethink what they were doing and there's huge exits from the workforce and so i think that as as as individuals try to pursue what their great idea is and the impact that they're going to have on their main street or globally with some new innovation you know we will see that the the flexibility of remote work the connectivity globally uh through digital e-commerce and other avenues is really going to change the landscape for small businesses in america yeah the flexibility the connectivity is fantastic i think for a lot of people the lack of a commute is wonderful more time that they can spend with their families more time that they can spend not sitting in a car in traffic i i see so many potential benefits to the remote work revolution i'm interested in where you see potential risk um i see for example the fact that you know i'm speaking to you right now from downtown new york city i sometimes look around cities like new york or washington dc boston and look at these enormous skyscrapers and think when our office is going to move back into them and what does that mean for commercial real estate um commercial real estate might not be a central concern necessarily a top concern of yours but give me a sense of of what part of the remote work revolution you're keeping your eye on as a potential risk well we've really tried to step up our technical assistance for small businesses with this digital economy because they have to figure out new ways to connect with people connect with their potential clients and then a lot of time that's been online through social media during the pandemic they've had to you know create all sorts of new pages and uh and make sure that their business is positioned to connect with businesses with these individuals our main streets are not bustling that that client may not walk in your door but they're online and you need to be able to figure out how to connect with them so it's a shift in how they market shifts and how they connect with their clients across the board but not only that since it is increasingly digital cyber security is actually one of my big concerns and what we're trying to push in the biden harris administration is to make sure that our businesses are resilient when it comes to cyber attacks uh as they adopt these new digital technologies and so we're working in partnership to make sure that they have the education that they need on that front the digital front but in addition of course we're concerned about our business centers as well and the small businesses that typically serve all those employees in those workforces that come out in both for lunches or happy hours so we want to make sure that the businesses can get support to reposition their strategies their operating model and and make sure that they can access those markets in new ways yeah i think that's all very very important i think that as the internet becomes a more important piece of infrastructure for workers for remote workers white white collar and knowledge workers uh unequal access the internet is also i believe as you mentioned going to be a pretty important issue and especially unequal access to to broadband between uh uh between ethnicities in this country so a lot to work on um a very a very full plate that you have with all these crises and opportunities hitting all at once so administrator thank you so so much i really really appreciate it it was really really nice to speak with you my pleasure to speak with you as well thank you next up a session produced by our underwriter paypal building back stronger empowering small businesses today for tomorrow the racial wealth gap measures the difference between what one owns and what they owe for black and brown people in america particularly black americans the racial wealth gap is ten to one relative to white americans the racial wealth gap is an important element of just social injustice and systemic racism that exists in our country how can we expect this country to come together if anyone is being left out how could we create generational wealth that could be passed on and on and on and that's where we said like we've got to do way more than a couple of million dollars [Music] less than two percent of all venture capital funding actually goes into entrepreneurs of color and so it is very important for people like paypal and others to invest in black and latinx funds that will directly invest in founders of color we work in communities that are among the most economically distressed in the country and the paypal deposit imports capital into these well-starved communities and gives them an opportunity to support their needs making sure that the economy works for everyone is in our collective interest that's what closing the racial wealth gap will accomplish i think we all need to step up we have an obligation to help it's the right thing to do for our companies it's the right thing to do for our communities for our economy honestly for our country [Music] hi i'm lucerutia ceo of axion opportunity fund one of the nation's leading non-profit cdfis we provide access to capital coaching and networks to businesses mostly owned by people of color women and immigrants aof received a grant from paypal last year to help support black and underrepresented small businesses as they navigate through the pandemic it's been almost two years since covet began and we're still dealing with its impacts especially in underserved communities today we're talking to a small business owner whose business was devastated by the economic shutdown and subsequent challenges despite this merely insurmountable challenges this tenacious woman kept her business alive she pivoted with a lot of hustle determination and ingenuity and reinvented her business at a time when everything turned upside down she found a way to support black entrepreneurs and her oakland community we'll learn how she kept her business running current challenges she and other small businesses are facing as covet moves into its second year and how private companies policy makers and ngos can provide continued support it is my absolute honor to introduce a great customer rainfree the owner of red door catering good morning rain good morning thank you so much tell us about your business we're a full service catering and gifting company that has served the bay area community for the past 16 years we pride ourselves on being environmentally friendly and also partnering with minority businesses and local producers so as a catering business how did you navigate the pandemic and keep your does open what was the most critical factor that allowed you to remain operational well when shelter in place went into effect we basically lost all of our clients and had to lay off 80 percent of our team members it was absolutely absolutely devastating and i immediately reached out to mentors and other organizations that i've worked with in the past to ask for help and funding we began preparing meals for families impacted by covet opened our kitchen for pop-ups and created a virtual catering division axion opportunity fund actually took a chance on us by allowing us to cater our first virtual gala which was a huge success we also received two both first and second rounds of the ppp loan which allowed us to re-hire some of our staff catch up on our rent and also put upgrades needed for our new e-commerce division it's with the support emotionally and financially like organizations um such as opportunity accion opportunity fund that has not only allowed us to keep our doors open but really thrive from your perspective what are the current challenges that most small business owners of color are facing currently especially since we're still in the midst of this pandemic black women-owned businesses are still um viewed as unbankable lacking collateral verifiable credit history which creates a great struggle to access capital in our dreams let's face it the information is out there black women are still not accessing the capital they need to fund their businesses let alone what's best for growth while still building high growth businesses there are a ton of money moving in tech an industry that celebrates failure big risks and bold vision we could tilt this same mindset to the food and other non-tech businesses and change the notion of traditional risks the pandemic has shed light on the struggles that we face for years and also has created a momentum for a more equitable economy we need to recognize that equity needs equity and for those who want to move the needle it requires investments beyond debt but a blend of capital that includes grants and affordable transparent financing organizations such as asean opportunity fund and others are needed and are addressing these issues so how are you supporting other black entrepreneurs and overall how can others help what's needed the most after sitting with the reality of what's happening and realizing that we often black owned businesses we often work in a bubble and we don't have thought partners or feel that our community is a place necessarily to make mistakes or ask for help i decided to create a space for black food makers to supercharge our talents and create our own ecosystem which led to the birth of the culinary collective an incubator with goals of familiarizing black entrepreneurs with best practices in regards to running their businesses and ways to access capital they have access to our commercial kitchen 24 hours at an affordable rate and also mentorship and linking them with organizations that can support them so what we really need right now is continued support from our local government mentorship uh technology and also affordable loans coveted shown a light on some of the flaws that have long plagued our financial system small businesses are the fabric of our communities and investing in them increases their financial health creates jobs and drives economic activity in communities across our country it will require strong partnerships between the public private and government sectors to provide the resources small businesses need to rebuild and regenerate our main streets if those listening have any needs for the best catering and gift boxes for your in-person or virtual events please give brain free a try thank you [Music] for a conversation on corporate america's role please welcome aurora james founder of the 15 pledge and founder and creative director brother belize and susan solny contributor atlantic live hi aurora thanks so much for being with us today hi susan how are you great so let's start by going back to last summer it's just after the murders of george floyd and brianna taylor and you had an idea about equity businesses and accountability took to instagram and started a campaign that has evolved into a change-making non-profit called the 15 pledge tell us more about your idea and what the pledge aims to do yeah absolutely so you know in the wake of george floyd's murder like so many of us i was seeing all these messages from major corporations and retailers that were saying you know black lives matter and i stand with black people and and while i was reading it i wasn't necessarily feeling it and um i decided to launch a call call to action for major retailers to commit 15 of their shelf space to black owned businesses so i put that out there into the world on may 29th uh by day 10 sephora became the first major corporation to commit to the 15 pledge and over the past 18 months we've announced 28 uh major corporations and retailers that have committed to the 15 pledge most recently was nordstrom they actually signed a 10-year contract with our organization and because of all of this we've actually driven over 10 billion dollars worth of opportunity to black owned businesses across this country that's an incredible effort to make more equitable market share for for those black owned businesses it's been a year of tremendous growth for your organization obviously you tell us about the past year and how receptive or not you've found some of the big retailers so the idea of the 15 percent um which one sounds like a big request yeah you know in other words what are you learning about the diversity of retail in corporate america as you try to bring more companies to the pledge yeah you know it's such a good question susan when i launched the pledge i actually had no idea what the average shelf space really was and i knew it wasn't close to 15 but once we actually started doing some digging and understanding how much of people's procurement budget was actually going to black owned businesses we see that largely it's below three percent and for a lot of businesses hovering around one percent um so you know it's definitely a pretty major proposition but you know we're also not asking anyone to do this overnight in fact we want people to take time do it thoughtfully uh and meticulously and make sure that they're really finding black owned businesses that are right for them because not only do we want people to be doing the right thing we want people to be doing good business at the same time right right the gap macy's sephora as you mentioned these are just a few of the national retailers who have taken the pledge and it's not just lip service it comes with some pretty deep commitments right yeah absolutely i think you know there's been a trend where you're seeing these businesses make one-time donations right or two million dollars to the naacp for example which is amazing and incredible and obviously that level of philanthropy is super important especially coming from someone who runs a nonprofit myself but you know we really need long term accountable change and i think you know what's so important about the work that we're doing at the 15 pledge is that these retailers are actually signing contracts with us and we're checking in every quarter and we're making sure that we're really working together as partners to make sure that they're getting access to the pipeline of black owned businesses that make sense for them and that they're actually seeing growth and that we can kind of troubleshoot any issues that are happening along the way and i read that one important aim of the initiative is to help close the racial wealth gap by helping black businesses tap into the venture capital needed to scale up advertise and and be more visible as a business owner yourself can you speak to why that's so important this idea it's a little bit beyond shelf space that tapping into the capital yeah absolutely so listen i you know i'm a small business owner myself i started my accessories brand brother bellies with thirty five hundred dollars at a flea market in the lower east side of new york city um and had no access to capital you know everyone says entrepreneurs should raise money from friends and family but what happens when your friends and family don't have additional resources to put your way so you know one thing that i'm super excited about and this work that we've been doing with the pledge is really connecting um black entrepreneurs with a lot of the different resources that they need and look there's also not a lot of trust right like i'm talking to black entrepreneurs every single day that are like oh like this private equity company or this vc reached out to us and you know i don't want to lose my business so i don't really want to even get back to them so we really need that whole um face of uh the financial industry to really change as well if we're going to start connecting these dots and ultimately you know the 15 pledge is a trillion dollar proposition and so we're going to have to have a lot of economic resources blowing into the black communities in order to um you know get to where we need to go and have a more sustainable and equitable country that's right now what impact do you think the diversification of in-store offerings has on businesses that are used to say you know business as usual um and what about the impact on customers customers of all races well you know i have to tell you the best news that we've gotten so far from the companies that have taken the pledge is that not only is this a great thing to do it's actually just great business um sephora rent the runway they're two of our earliest pledge takers and they're seeing already that it's having really great returns and i think when we look at you know consumer spending and also all of these retailers actual consumers there's a clear need and demand for this sort of um diversity to happen on the shelves and i think that a you know it's giving us better access to a broader range of products you know everyone says the the feedback sometimes we'll get about the pledges well shouldn't stores just be stocking the best product and my response to that is yes absolutely and so we need these measures to make sure that they are looking and finding some of the best product that has been historically overlooked right variation of products is a good thing in itself right it just pays off as you just said uh let's go back to about two weeks ago you took fashion's biggest night then that gala to design a white gown for representative ocasio-cortez with the message blazed across the back that said tax the rich now you're an acclaimed designer using your platform uh to raise awareness this way what fuels your passion uh for doing that listen you know the congresswoman has always had messages of her own that she's put at the forefront of her campaigns and i think for me as a fashion designer i'm someone who really wants to support women tell their story tell their message and feel confident and feel really proud and i think that's something that we did that night and getting her message out there to a wide audience and um it was definitely received on quite a quite a wide scale we've been talking about businesses but what can individual consumers do to use spending power wisely in regard to equity and market share oh my gosh that's such a great question you know i think so often we'll kind of be sitting at home especially during the pandemic and say like how can i help what can i do and you know at the 15 pledge we also urge consumers to take a look at their own spending right and say like okay can i make sure that i'm spending 15 of my own budget in black owned businesses and even for me it's been about like looking in my closet looking in my refrigerator looking at all of my spending um you know even the restaurants that i'm getting take out from or visiting and making sure that i'm supporting black owned businesses that are close to me as well and one of our pledge takers yelp did something super amazing last year by actually adding the black owned business filter so that everyone across america can actually search for the black owned businesses in their own communities to support which has been so awesome your website includes a database of businesses for gift ideas and things like that is that right yeah so we actually have been building a super robust database of black owned businesses over the past 18 months and we haven't rolled out the full thing publicly yet right now it's only available to our pledge shakers but leading up to the holiday season we're going to be publishing a lot of gift guides and just making sure to introduce people to black owned businesses and we spend a ton of time doing that on social media as well so for anyone that's listening that wants to you know learn about new black owned businesses make sure that you follow the 15 pledge uh on instagram and our newsletter as well is your ultimate goal to influence enough companies to be intentionable intentional about creating space for black business owners and owners of color that there won't be a need for something like the 15 pledge in the future absolutely my goal basically is to you know get the organization to a place where people are like wait why did we ever even need that you know and i think that it seems like such a no-brainer for people but in reality you know i told you the numbers earlier a lot of these businesses have a long way to go and you know of course i'm incredibly proud of the 30 or so uh pledge takers that we've announced publicly to date but there are still so many more that i think could do such a great job taking the pledge and really cultivating their own group of black-owned businesses and um you know i'm excited to see who's going to come to the table next to make this commitment are there other areas of the private sector you hope to influence yeah of course silicon valley you know we talked about that a little bit earlier right it's like we definitely need capital to start going to these businesses um we also haven't seen anyone take the pledge in the grocery space yet um would love for an instacart or a kroger to really step up in that way because obviously you know that industry could use the support so much there's been um you know such a history of crop sharing and you know black farmers being really exploited across this country and really you know regaining some of that momentum in that space for black entrepreneurs i think would be absolutely wonderful so you think all that's next for the pledge i guess you envisioned another year of tremendous growth just like the past year yes another year of tremendous growth for sure just since this year started we've already onboarded over 385 black owned businesses onto our pledge takers shelves which is pretty incredible um but you know to be honest with you susan in order to get all of our retailers to 15 we're going to need to quadruple that number of black owned businesses we're going to be able to we're going to need to be able to get them all of the resources they need to scale and be successful um so you know there is a lot of work ahead of us not just for me for everyone at uh the 15 pledges nonprofit organization and honestly also for everyone that's listening as well well thank you so much for sharing these ideas aurora we'll end on that note thank you so much for being with us today of course thank you so much for having me susan pleasure for our final session about access to capital please welcome robert f smith founder chairman and ceo of vista equity partners derek thompson is back to lead the conversation thank you so much for joining us robert uh let's jump right in so the pandemic was obviously awful for so many small business owners uh especially uh minority business owners and before we dive into the pandemics impact and some of the some of the long-term plans that we have to make sure nothing like this happens again can you briefly explain to us the history of why minority-owned businesses have historically been deprived of access to capital yeah there's again you know uh in in the u.s really hundreds of years of uh you know policy and action that has deprived the uh specifically african-american community of capital and wherewithal to develop infrastructure for economic improvement you know it started with from the you know from the homestead act to the southern homestead act to the way that redlining work to the way that the gi bill was disproportionately uh distributed in terms of opportunity uh when our soldiers returned uh from war and as a result of that that uh systemic underdevelopment under capitalization of the community has has always plagued uh our communities even today you know 70 of african-american communities don't have a branch bank and if you think about development of a business or community you know you need capital and if you don't have access to capital i.e

access to a bank or banking services or or you know the the solutions that that capital brings and it's going to be hard for you to really regenerate uh any economic activity in that community including job uh job regeneration etc right so after the pandemic or during the first months of the pandemic you approached the trump administration in congress and asked them to earmark an additional 10 billion dollars for community development uh in financial institutions to sustain minority owned small businesses tell me a little bit about uh your conversation uh with with uh sort of key stakeholders in washington what you were really trying to do there and and what you accomplished sure i'll tell you what it what came out of uh the analysis that my companies were doing on how this pandemic was affecting small to medium businesses we have 1.4 million small businesses as customers across our platform of 70 plus companies and one of our businesses um actually is a company called finasteria provides banking solutions to large media men small banks globally from the fourth largest uh enterprise software companies or fintech companies in the world and the team brought to my attention um a couple of elements one was that you know the the way that uh people were utilizing what was in the ppp loans and we were just seeing you know there was just actually no access uh for the small to medium businesses uh in these african-american latino communities uh to that facility and so as we really started to dig in deeply we started talking everyone from the naacp to the urban league and found and really discovered that's when the discovery came of you know how little those those organizations or sorry those communities were being banked uh by the large banking institutions and so uh my team jumped right on it and started really building solutions and systems to aid these small to medium businesses and gaining access to the ppp loans well then of course when that first rush went through the money got used up quickly so then i called secretary mnuchin and said listen you know i think we're gonna have a problem if we don't actually earmark some capital for these small lenders uh into these small communities because these these companies typically don't have but you know days of working capital not months of working capital and when they shut down and they could no longer receive customers uh that was a problem so you know that led to a whole series of dynamics and conversations with uh um senator schumer and nancy pelosi and and uh and other folks to really drive forward you know an initiative that said let's carve out capitals with these small to medium businesses have access 0.1.2 my companies then jumped on it and said let's make sure that these these small banks have the capacity to actually process these loans and you know prior to these doing these loans these companies you know would do you know 30 40 50 loans in a year these banks and you know once we implemented these software and technology solutions they were able to do hundreds and process hundreds and thousands of loans in weeks uh that's the power of technology obviously so that's so you know combining those forces of technology uh connectivity and then of course capital and earmarked capital really helped give these uh small to medium businesses some boost during this uh this horrific time of the pandemic the early stages of it right so did it work did did these policies work in terms of extending funds to minority-owned companies that were uh otherwise not going to receive anything from ppp after the money ran out yeah it absolutely did and you know i always point to this one's a great example uh hope credit union which is really in the delta you know parts of mississippi alabama georgia uh prior to um modernization in the capital uh uh call it you know the the capital's equestrian for for this community i mean they did 60 business loans the prior year they then then did 7 500 business loans over three months utilizing technology platforms and capital and you have remember the average loan for them was eleven thousand dollars uh so these aren't huge loans but they make a huge difference to these small businesses that you know typically employ one two three five people in those communities so if you think about it it's saving 30 40 50 000 jobs uh and enabling a that bank and that credit union to now process more effectively loans going forward once they became modernized and so we've been able to actually continue to push that through i'm trying to get now the administration uh to to really carve out some capital to ensure all the cdfis and mdis which are you know community finance development institutions and minority depository institutions modernized only we're going to take a half a billion dollars out of a three trillion dollar plan and if we're able to do that that's going to create a massive economic uplift for uh all of these communities um that rely on these cdfis and mdis for capital sources yeah it's so interesting to me how crises can kick-start innovation and invention that wouldn't necessarily otherwise exist without the impetus of the crisis i wrote a feature for the atlantic last year about how the skyscraper was invented in chicago just years after the great fire of chicago in large part because after chicago was flattened you had all of these architects who came in to rebuild it and they came up with steel skeletons construction uh in new york after the great blizzard of the 1880s new york built its first subway because they wanted to bring the elevated trains underground so they couldn't be shut down by another blizzard it seems like in lots of cases this pandemic has had some similar examples that we have learned things or uh been been sort of motivated to innovate in ways we might otherwise not have ins in the sort of way that makes us want to carry this forward okay if that worked maybe we should keep doing it with or without a pandemic so tell me a little bit about how what you learned might point us toward a viable plan going forward for extending funds to minority owned businesses i think one of the most important things we can do is really you know focus and emphasize on the importance of the corporate uh and i'll call it a private and and you know public partnership that we were able to forge during that that time and say okay now how do we extend it and part of what i'm doing is working with the business roundtable and you know edison alliance at world economic forum and saying okay listen you know we as corporations beyond capital what we actually have as well with all knowledge organizational capacity and pretty smart people right who work in our organizations and so let's direct them towards the problems uh that we know our society has and when i think about in america at least one of the biggest issues we have is how do we enable our workforce overall workforce to be more competitive in a digital economy well first thing we have to get broadband right so let's get a broadband network to every american uh as opposed to you know americans that don't live in you know specific communities you know 82 of that of hbcus for instance don't actually are in broadband deserts which is just horrible so now you have a whole you know group of african-american students who want to learn but now they're in a broadband desert and it you know it frankly is an inhibitor to them participating in the digital economy fully well one of the initiatives we started was a student freedom initiative and as part of that now have cisco systems abc technologies which is all it what we now are combining we're building out entire broadband networks for every single hbcu well beyond what that does for the students it now creates extensibility into the community because once you have broadband you have the ability to use software solutions for small to medium businesses you can do things in in in education for distance learning learning management systems you can also focus on telemedicine as a way to deliver you know low-cost high-quality you know health care solutions to the community so you've got to build out those infrastructures but again public-private partnerships and now working course trying to get the administration to also understand the importance of funding in supporting these sort of initiatives because that creates a backbone of opportunity for all americans to now participate in the digital economy which helps the entire economy so those are some of the initiatives we're focused on at this point yeah you have two more progressive funding models i want to talk about the two percent solution and the southern cities initiative just tell me about both of those briefly sure so the southern communities initiative really is that you know when you think about it 60 of african-american communities live actually believe it or not within a hundred mile radius of six cities and so we're focusing on those six cities we're bringing a number of things to them first of course is the broadband infrastructure to the hbcus the second is you know how do we bring capacity to the cdfis and mdi so these are the capillary banking systems modernizing them in addition to looking to bring you know uh very expansive forms of capital tier one capital into into that construct point three you know how do you then take that and make that more extensible not only to learning but also into the development of the small to medium business segments so small you know businesses when they utilize uh enterprise software tools to get a 900 roi so you can just start thinking about layers on top of layers and once you have broadband infrastructure you can do all sorts of things in telemedicine and wellness this is an initiative that came out of some work that we did at the business roundtable and then i've had you know two people rich lesser ceo of of bcg and dan schuman who's the ceo over paypal say hey let's do this together and now we're bringing resources into these six communities which include local partners for instance walton foundation's involved we've got the king center in atlanta involved and these are the sort of local partners that we're now leveraging with the grameen america for instance to now create 500 and a thousand small businesses startups by african americans in these in these communities that are getting funded and have the ability to now grow these are the sorts of initiatives that we're driving forward uh in concert that came out of a pandemic that gave realization and recognition to the disparities of wealth and opportunity probably most importantly a lot of communities so that's one of the initiatives we're focused on yeah you talked about closing the broadband deficit you talked about closing an education deficit and access to finance deficit i'm also interested in in the trust deficit you know communities of color have a lot of reasons not to trust big banks not to trust the financial sector frankly not to trust a lot of big institutions um what are ways that we can help to build back that trust in addition to everything that you've covered yeah again so what i'm encouraging which kind of touches on the two percentage solution is encouraging the large corporations to rebuild the trust through capital you know if they just donated in kind of two percent of their net income uh for the next 10 years we can basically solve the wealth and the income disparity in all the communities in you know in in the us that two percent to create jobs create sustainable opportunities and one inspired uh idea uh came through bank of america and you know with anfinookin and john newton doll and said they created now an equality progress sustainability bond in essence these companies can now issue this bond take that capital and deliver it across these various you know these various initiatives which can be you know the upgrading of the hbcu infrastructure to you know powering you know uh venture capital or small to medium business uh uh capital solutions or put tier one capital and cdfis into these communities that's an inspired solution that came out of we think about it a a crisis and now we have technical solutions i.e in the form of uh financial market solutions that can now change the dynamic and trajectory of not only a company but a neighborhood and a community that's how you build that trust back you know that's a way to say listen we are actually taking profits and capacity that we have organizational capacity learning knowledge and driving it into communities that we know don't have access to this but will actually improve the station in life and the dimension of opportunity for that community so those are some of the ways that are important uh that we need that's great yeah last question for you is you know sometimes people say that the atlanta can be a little bit too washington dc focused so i apologize because this is a question that's very much focused on on washington policy uh right now congress and the senate the white house are debating an infrastructure bill there's been a lot of debate over what we should consider infrastructure to be put into this bill you know whether it's not just roads and bridges that are considered infrastructure i think among people who are broad-minded you know broadband is also infrastructure healthcare to a certain extent can also be infrastructure uh what is one item one element that is on the fringes of this bill are possibly you know going to be included in this bill that you think is is most essential uh to to solving the problems that you've been fixated on solving for the last few years if i could pick one thing i'm going to tell you i want to but the first thing would be that they need to upgrade the infrastructure for the cdfis and mdis and it's a half a billion dollars to upgrade and modernize every cdfi and mdi what creates lending capacity in every community in the united states now when you have that you now have the ability to draw to push capital communities the second thing would be broadband you know we have about 42 million americans who really don't have access to broadband and i look over in india and what you know mukesh ambani has done he's got 1.3 billion people who

now have access to broadband there's about 400 million who use it and if we can't get those 42 million people uh access to broadband you know effective broadband that's a problem those are the two things you solve those two problems and that creates a massive economic uplift for all communities in america access to broadband access to capital sounds like a good formula robert thank you so so much for joining us i really really appreciate it eric thank you so much good to see you and that concludes this hour of programming thank you for joining us for this important conversation and thank you again to paypal for supporting the atlantic festival we have much more in store for you today please take a look at the schedule for more information and we'll see you soon while we're on a break we encourage you to network with other attendees and visit our expo booths to participate select the networking icon located on the left hand side of the screen next click join and you'll be randomly paired with another attendee for about five minutes if you wish you can exchange virtual information with each other and keep in contact via direct message within the platform you can also click the explore icon to visit our virtual expo booths here you can explore more resources from the atlantic and are underwriters related to today's event we'll see you shortly after the break you

2021-09-26 21:17

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