Venture for Positive Change: The Value in Underprivileged Communities.

Written and prepared by: George Chambers Jr Managing Partner

This research sample serves as an example report that G360G Venture Voice could use to enhance the credibility of its product by  featuring it on the company's website, social media platforms, or marketing efforts. The report provides evidence that  focusing venture capital in underprivileged communities can mutually benefit both communities and investors. Within  the article, I summarize the advantages, challenges, and current solutions for promoting entrepreneurship in  underprivileged communities. I also propose potential strategies that could be leveraged to support greater  entrepreneurial success in such communities, which align with the potential benefits that G360G Ventures Voice  could offer. This 

report could also form the factual basis of a marketing campaign centered on businesses for positive change, aligning  with Salesforce's #TeamEarth marketing initiative. While the article's style is academic, it could also be revised as a more attention-grabbing blog post. 

In a world where over 3 billion people live on less than $2.50 a day, igniting entrepreneurship in  underprivileged communities is a pressing social obligation with considerable economic potential.  Unfortunately, these communities face more significant hurdles compared to their privileged counterparts. This report highlights the challenges and benefits of enabling entrepreneurship in these  communities, offers a critical evaluation of the existing landscape, and proposes a transformative solution  that utilizes digital platforms to overcome these challenges. 

We find ourselves at the junction of technological advancement and social responsibility, with an  opportunity to reshape the landscape of entrepreneurship in underprivileged communities. This report  presents compelling evidence that supporting these communities is not only a catalyst for positive social  change but can also yield substantial economic benefits. It also exposes the stark reality of current  practices falling short of effectively addressing the unique challenges faced by these communities. A  paradigm shift is necessary, and digital platforms could be at the forefront of this change. This report  suggests leveraging digital platforms to provide resources, mentorship, equitable business evaluations,  and opportunities for collaboration on an unprecedented scale. By doing so, we can unlock the untapped  potential of these communities, foster a more diverse and inclusive entrepreneurial landscape, and  position itself as a leader in the tech startup ecosystem.

The Economic Necessity of Entrepreneurship in Underprivileged  Communities 

Nearly every entrepreneur would agree that building a new business is hard work, but the playing field is  far from level for disadvantaged communities. It’s true that all new entrepreneurs must overcome the  lack of formalized organizational structure and establish legitimacy in the eyes of consumers and investors [Stinchcomb 1965]. Most new ventures are also resource-limited due to their scale, compared to larger, corporate market participants. These factors are universal for any new venture. However, these  complicating factors are further amplified for entrepreneurs from underprivileged communities. To make  matters worse, members of underprivileged communities face additional complicating factors like discrimination, pressures of poverty, and a higher risk of venturing due to the lack of safety nets [Morris 2020, Assenova 2020]. As a result, a substantial portion of the population is greatly underrepresented in  the rapidly growing tech startup landscape [Rubin 2010].  

Enabling and accelerating the startup and growth of ventures in underprivileged communities can offer significant benefits to both community members and investors, but there are substantial challenges associated with unlocking these benefits. Entrepreneurship can elevate individuals and communities out  of poverty. The market potential of underrepresented communities is significant, expected to grow, and  largely untapped. Yet, the current platforms and venture capital landscape are not efficiently addressing  the challenges or empowering ventures in these communities. Reducing the cost and risk of new venture  entry, founder growth and mentorship, and investor screening are potential solutions to these challenges. This article explores the benefits, challenges, and potential solutions for enabling modern  entrepreneurship in underprivileged communities. 

Breaking the Poverty Cycle through Entrepreneurship. 

Even in developed countries, the income gap continues to widen year over year. Federal Reserve’s Survey  of Consumer Finances reported the most significant gaps for minorities [Aladangady 2021]. This signifies that the nation and world are still far from social and racial equality. However, targeted new ventures  offer a solution to the growing issue. 

Morris et al., Notre Dame Business School, published multiple works on the implications of and  disadvantages that impoverished, underprivileged entrepreneurs face [Morris 2020, 2021, 2022, 2023].  In one work, he discussed the findings of multiple studies that suggest that entrepreneurship is a means  to break out of poverty [Morris 2020]. In summary, he reasoned that: 

• populations with higher rates of entrepreneurship correlate with larger reductions in poverty [Slivinski 2012], 

• underprivileged entrepreneurs had a higher increase in their household income than non entrepreneurs of the same period [Clark 1999], 

• entrepreneurship was found to reduce poverty in both developed and undeveloped countries [Amoros 2011], 

• and, entrepreneurship enables careers outside of traditional low-wage, low-growth employment that underprivileged individuals often find themselves in [Morris 2020].

2 

Given that poverty drives substandard literacy, living conditions, health conditions, and discrimination  [Morris 2022], poverty alleviation should be at the forefront of economic development discussions.  Entrepreneurship, in the form of new business venturing, can be a potential solution to this global issue.  

Tapping into the Untapped: The Investment Potential of Underprivileged Communities. Many investors might suggest that there is no economic incentive to target underprivileged markets over  more affluent communities, but that is misguided. Undeniably, on average, founders from affluent  communities have higher literacy levels, fewer financial constraints, and more resources. The current  demographics, predominately white male investors and founders, reflect this [VC Human Capital Survey  2020]. Given the growing minority population in the US, there is untapped potential in minority and  impoverished markets. 

Transitioning from the topic of poverty alleviation, it's important to recognize that underprivileged or minority communities represent a significant consumer market [Pagano and Taub 2021]. For example,  two states with the majority of the population being minorities, Ca and TX, also have two of the highest  GDPs [Bureau of Economic Analysis]. Further, the US census predicts that minority populations are  expected to grow substantially, with more states becoming minority majorities [Johnson 2021.].  Accordingly, the potential capital would be a portion of the $1.0 to $1.5 trillion from closing the racial  wealth gap [McKinsey 2020]. McKinsey estimated that if black-owned small businesses achieved the same  average revenue as white-owned businesses, the total revenue gains would account for 200 billion  [McKinsey 2020]. Yet, the current venture landscape is showing little evidence of change, with most  investments funneling to traditional, Caucasian, demographics [Pagano and Taub 2021], and venture has  not historically served other markets [Rubin 2010]. This represents significant untapped potential, but  with if investors shift towards new demographics, the targeted growth strategies must also shift.  

The Current Landscape of Underprivileged Entrepreneurship With such a large market potential, what is holding back business development in underprivileged  communities? First, the landscape has not and does not set up participants for success. However,  evidence supports that these communities will be successful given the opportunity. Given a review of  the successful and unsuccessful strategies, we provide key characteristics for successfully building entrepreneurship in underprivileged communities.  

The Role of Community in Entrepreneurship 

Understanding this landscape forms the foundation for addressing the issue. However, while numerous  strategies have been deployed to increase the success rate of new ventures in underprivileged  communities, their efficacy varies.  

Community members are the best candidates for unlocking the underprivileged consumer markets they  know best. More generally, those familiar with the culture are well suited to grow entrepreneurship in  their own culture and community. Therefore, pursuing growth of businesses with founders based in these  communities is paramount for success. Also, there is a lack of trust from minorities in the traditional  business ecosystems, based on U.S.’s historical evidence of discrimination. For example, McKinsey noted  that in the 2016 Annual Survey of Entrepreneurs, “Only 58 percent of Black owners sought professional  services, for reasons including expense, inaccessibility, and mistrust, compared with 70 percent of  Caucasian owners” [McKinsey 2020, Annual Survey of Entrepreneurs 2016]. Consequently, those that fit  the traditional venture mold cannot be expected to build trust and an organic community, thus unlocking 

3  

potential network effects, within a community that they have no connection to [Topa 2015]. Clearly, to  build a stronger community of underprivileged entrepreneurs, a network of mentors and investors  familiar with the community is essential and traditional methods are unlikely to succeed. 

There is also evidence for success if entrepreneurship was pursued in underprivileged communities based  on social factors related to entrepreneurial characteristics, recruiting, and product adoption. For example,  studies have shown that underprivileged communities have a higher rate of entrepreneurship, relative to  more privileged communities [Morris 2020], meaning that they are more likely to embrace the  entrepreneurial spirit if the opportunity were presented. Additionally, ¾ job seekers desire diversity in the  workplace [Magazzo 2023], which suggests that diverse companies could offer a competitive edge in  recruiting up-and-coming Gen Z talent. With that in mind, it is essential that the strategies for building in  these communities is property executed.  

The Limitations of Existing Strategies 

Moving on to the current strategies in place, it's apparent that there are several measures being taken to  increase the success rate of new ventures in underprivileged communities, including direct investment,  incubation, and mentorship. However, success varies depending on the approach. Direct Business  investment helps but is insufficient for fostering a platform of entrepreneurship [McKinsey 2020].  Incubation of new businesses results in higher success rates, but this can be challenging to scale to larger  communities and requires significant time commitments [Assenova 2020]. Similarly, mentorship  increases success rates but is also hard to scale to many potential founders [Techcrunch 2015]. Finally,  investors with community similarities and experience have demonstrated success such as BLVK VC,  Backstage Capital, 1863 Ventures, Harlem Capital, and Fearless Fund [Flemmon 2022]. Acknowledging  these shortcomings of the traditional VC structure, it's crucial to propose alternatives. With that in mind,  leveraging digital platforms could be a promising approach to foster entrepreneurship. 

The Future of Entrepreneurship in Underprivileged Communities:  Proposed Solutions 

Given the existing challenges facing underprivileged communities and the shortcomings of existing  solutions, transformative strategies are needed. It is proposed that digital platforms can greatly improve  success rates of early stage startups and investors.  

Embracing Digital Platforms and Training 

In the era of digitalization, one potent solution to fostering entrepreneurship in underprivileged  communities is through digital platforms. These platforms provide resources, mentorship, and  investment opportunities on a larger scale than traditional VC structures can achieve. They offer online  training, resources, and tools to help entrepreneurs launch and manage their businesses effectively  [Mollick 2016]. This training encompasses crucial areas such as business plan writing, marketing,  financial planning, and more, tailored to the unique challenges faced by underprivileged entrepreneurs. 

Universal Algorithmic Scoring for Equitable Valuations 

One major hurdle underprivileged entrepreneurs face is bias and prejudice during business evaluations.  Digital platforms can employ universal algorithmic scoring systems to provide equitable outcomes from  valuations [Dana 2017]. This system would use objective performance indicators, thus reducing the  likelihood of bias. It's a significant step towards leveling the playing field for all entrepreneurs.

4  

Lowering Barriers to Entry 

Equitable access to capital is another crucial aspect of fostering entrepreneurship. Digital platforms can  lower the cost of entry for both investors and entrepreneurs, helping to mitigate capital access  problems often faced by those from underprivileged backgrounds [Freeland 2018]. Lower barriers to  entry mean that a more significant number of individuals can participate in the entrepreneurial process,  increasing diversity and potential for innovation. 

Building Social Platforms for Networking and Collaboration 

Digital platforms can also mimic the neighborhood community's traditional networking and mentorship  benefits. They facilitate knowledge sharing and expand opportunities for sponsorship and mentorship.  This type of networking can expose underprivileged entrepreneurs to a larger world of ideas, strategies,  and potential collaborators or investors [Burt 2001]. 

Creating Natural Incubation Environments 

Natural incubation, a process of business development wherein entrepreneurial activities are stimulated  and supported within a community [Smilor 1987], is another avenue that digital platforms can help  facilitate. By providing a space for entrepreneurs to connect, share ideas, and work together, these  platforms can serve as virtual incubators, fostering a sense of community and cooperation. 

Providing an Accreditation Tool for Investors 

Lastly, digital platforms can provide an accreditation tool for investors. Studies suggest that  accreditation is essential for investors, providing a level of assurance regard

This research sample serves as an example report that G360G Venture Voice could use to enhance the credibility of its product by  featuring it on the company's website,social media platforms, or marketing efforts. The report provides evidence that  focusing venture capital in underprivileged communities can mutually benefit both communities and investors. Within  the article, I summarize the advantages, challenges, and current solutions for promoting entrepreneurship in  underprivileged communities. I also propose potential strategies that could be leveraged to support greater  entrepreneurial success in such communities, which align with the potential benefits that G360G Ventures Voice  could offer. This 

report could also form the factual basis of a marketing campaign centered on businesses for positive change, aligning  with Salesforce's #TeamEarth marketing initiative. While the article's style is academic, it could also be revised as a more attention-grabbing blog post. 

In a world where over 3 billion people live on less than $2.50 a day, igniting entrepreneurship in  underprivileged communities is a pressing social obligation with considerable economic potential.  Unfortunately, these communities face more significant hurdles compared to their privileged counterparts. This report highlights the challenges and benefits of enabling entrepreneurship in these  communities, offers a critical evaluation of the existing landscape, and proposes a transformative solution  that utilizes digital platforms to overcome these challenges. 

We find ourselves at the junction of technological advancement and social responsibility, with an  opportunity to reshape the landscape of entrepreneurship in underprivileged communities. This report  presents compelling evidence that supporting these communities is not only a catalyst for positive social  change but can also yield substantial economic benefits. It also exposes the stark reality of current  practices falling short of effectively addressing the unique challenges faced by these communities. A  paradigm shift is necessary, and digital platforms could be at the forefront of this change. This report  suggests leveraging digital platforms to provide resources, mentorship, equitable business evaluations,  and opportunities for collaboration on an unprecedented scale. By doing so, we can unlock the untapped  potential of these communities, foster a more diverse and inclusive entrepreneurial landscape, and  position itself as a leader in the tech startup ecosystem.

The Economic Necessity of Entrepreneurship in Underprivileged  Communities 

Nearly every entrepreneur would agree that building a new business is hard work, but the playing field is  far from level for disadvantaged communities. It’s true that all new entrepreneurs must overcome the  lack of formalized organizational structure and establish legitimacy in the eyes of consumers and investors [Stinchcomb 1965]. Most new ventures are also resource-limited due to their scale, compared to larger, corporate market participants. These factors are universal for any new venture. However, these  complicating factors are further amplified for entrepreneurs from underprivileged communities. To make  matters worse, members of underprivileged communities face additional complicating factors like discrimination, pressures of poverty, and a higher risk of venturing due to the lack of safety nets [Morris 2020, Assenova 2020]. As a result, a substantial portion of the population is greatly underrepresented in  the rapidly growing tech startup landscape [Rubin 2010].  

Enabling and accelerating the startup and growth of ventures in underprivileged communities can offer significant benefits to both community members and investors, but there are substantial challenges associated with unlocking these benefits. Entrepreneurship can elevate individuals and communities out  of poverty. The market potential of underrepresented communities is significant, expected to grow, and  largely untapped. Yet, the current platforms and venture capital landscape are not efficiently addressing  the challenges or empowering ventures in these communities. Reducing the cost and risk of new venture  entry, founder growth and mentorship, and investor screening are potential solutions to these challenges. This article explores the benefits, challenges, and potential solutions for enabling modern  entrepreneurship in underprivileged communities. 

Breaking the Poverty Cycle through Entrepreneurship. 

Even in developed countries, the income gap continues to widen year over year. Federal Reserve’s Survey  of Consumer Finances reported the most significant gaps for minorities [Aladangady 2021]. This signifies that the nation and world are still far from social and racial equality. However, targeted new ventures  offer a solution to the growing issue. 

Morris et al., Notre Dame Business School, published multiple works on the implications of and  disadvantages that impoverished, underprivileged entrepreneurs face [Morris 2020, 2021, 2022, 2023].  In one work, he discussed the findings of multiple studies that suggest that entrepreneurship is a means  to break out of poverty [Morris 2020]. In summary, he reasoned that: 

• populations with higher rates of entrepreneurship correlate with larger reductions in poverty [Slivinski 2012], 

• underprivileged entrepreneurs had a higher increase in their household income than non entrepreneurs of the same period [Clark 1999], 

• entrepreneurship was found to reduce poverty in both developed and undeveloped countries [Amoros 2011], 

• and, entrepreneurship enables careers outside of traditional low-wage, low-growth employment that underprivileged individuals often find themselves in [Morris 2020].

2 

Given that poverty drives substandard literacy, living conditions, health conditions, and discrimination  [Morris 2022], poverty alleviation should be at the forefront of economic development discussions.  Entrepreneurship, in the form of new business venturing, can be a potential solution to this global issue.  

Tapping into the Untapped: The Investment Potential of Underprivileged Communities. Many investors might suggest that there is no economic incentive to target underprivileged markets over  more affluent communities, but that is misguided. Undeniably, on average, founders from affluent  communities have higher literacy levels, fewer financial constraints, and more resources. The current  demographics, predominately white male investors and founders, reflect this [VC Human Capital Survey  2020]. Given the growing minority population in the US, there is untapped potential in minority and  impoverished markets. 

Transitioning from the topic of poverty alleviation, it's important to recognize that underprivileged or minority communities represent a significant consumer market [Pagano and Taub 2021]. For example,  two states with the majority of the population being minorities, Ca and TX, also have two of the highest  GDPs [Bureau of Economic Analysis]. Further, the US census predicts that minority populations are  expected to grow substantially, with more states becoming minority majorities [Johnson 2021.].  Accordingly, the potential capital would be a portion of the $1.0 to $1.5 trillion from closing the racial  wealth gap [McKinsey 2020]. McKinsey estimated that if black-owned small businesses achieved the same  average revenue as white-owned businesses, the total revenue gains would account for 200 billion  [McKinsey 2020]. Yet, the current venture landscape is showing little evidence of change, with most  investments funneling to traditional, Caucasian, demographics [Pagano and Taub 2021], and venture has  not historically served other markets [Rubin 2010]. This represents significant untapped potential, but  with if investors shift towards new demographics, the targeted growth strategies must also shift.  

The Current Landscape of Underprivileged Entrepreneurship With such a large market potential, what is holding back business development in underprivileged  communities? First, the landscape has not and does not set up participants for success. However,  evidence supports that these communities will be successful given the opportunity. Given a review of  the successful and unsuccessful strategies, we provide key characteristics for successfully building entrepreneurship in underprivileged communities.  

The Role of Community in Entrepreneurship 

Understanding this landscape forms the foundation for addressing the issue. However, while numerous  strategies have been deployed to increase the success rate of new ventures in underprivileged  communities, their efficacy varies.  

Community members are the best candidates for unlocking the underprivileged consumer markets they  know best. More generally, those familiar with the culture are well suited to grow entrepreneurship in  their own culture and community. Therefore, pursuing growth of businesses with founders based in these  communities is paramount for success. Also, there is a lack of trust from minorities in the traditional  business ecosystems, based on U.S.’s historical evidence of discrimination. For example, McKinsey noted  that in the 2016 Annual Survey of Entrepreneurs, “Only 58 percent of Black owners sought professional  services, for reasons including expense, inaccessibility, and mistrust, compared with 70 percent of  Caucasian owners” [McKinsey 2020, Annual Survey of Entrepreneurs 2016]. Consequently, those that fit  the traditional venture mold cannot be expected to build trust and an organic community, thus unlocking 

3  

potential network effects, within a community that they have no connection to [Topa 2015]. Clearly, to  build a stronger community of underprivileged entrepreneurs, a network of mentors and investors  familiar with the community is essential and traditional methods are unlikely to succeed. 

There is also evidence for success if entrepreneurship was pursued in underprivileged communities based  on social factors related to entrepreneurial characteristics, recruiting, and product adoption. For example,  studies have shown that underprivileged communities have a higher rate of entrepreneurship, relative to  more privileged communities [Morris 2020], meaning that they are more likely to embrace the  entrepreneurial spirit if the opportunity were presented. Additionally, ¾ job seekers desire diversity in the  workplace [Magazzo 2023], which suggests that diverse companies could offer a competitive edge in  recruiting up-and-coming Gen Z talent. With that in mind, it is essential that the strategies for building in  these communities is property executed.  

The Limitations of Existing Strategies 

Moving on to the current strategies in place, it's apparent that there are several measures being taken to  increase the success rate of new ventures in underprivileged communities, including direct investment,  incubation, and mentorship. However, success varies depending on the approach. Direct Business  investment helps but is insufficient for fostering a platform of entrepreneurship [McKinsey 2020].  Incubation of new businesses results in higher success rates, but this can be challenging to scale to larger  communities and requires significant time commitments [Assenova 2020]. Similarly, mentorship  increases success rates but is also hard to scale to many potential founders [Techcrunch 2015]. Finally,  investors with community similarities and experience have demonstrated success such as BLVK VC,  Backstage Capital, 1863 Ventures, Harlem Capital, and Fearless Fund [Flemmon 2022]. Acknowledging  these shortcomings of the traditional VC structure, it's crucial to propose alternatives. With that in mind,  leveraging digital platforms could be a promising approach to foster entrepreneurship. 

The Future of Entrepreneurship in Underprivileged Communities:  Proposed Solutions 

Given the existing challenges facing underprivileged communities and the shortcomings of existing  solutions, transformative strategies are needed. It is proposed that digital platforms can greatly improve  success rates of early stage startups and investors.  

Embracing Digital Platforms and Training 

In the era of digitalization, one potent solution to fostering entrepreneurship in underprivileged  communities is through digital platforms. These platforms provide resources, mentorship, and  investment opportunities on a larger scale than traditional VC structures can achieve. They offer online  training, resources, and tools to help entrepreneurs launch and manage their businesses effectively  [Mollick 2016]. This training encompasses crucial areas such as business plan writing, marketing,  financial planning, and more, tailored to the unique challenges faced by underprivileged entrepreneurs. 

Universal Algorithmic Scoring for Equitable Valuations 

One major hurdle underprivileged entrepreneurs face is bias and prejudice during business evaluations.  Digital platforms can employ universal algorithmic scoring systems to provide equitable outcomes from  valuations [Dana 2017]. This system would use objective performance indicators, thus reducing the  likelihood of bias. It's a significant step towards leveling the playing field for all entrepreneurs.

4  

Lowering Barriers to Entry 

Equitable access to capital is another crucial aspect of fostering entrepreneurship. Digital platforms can  lower the cost of entry for both investors and entrepreneurs, helping to mitigate capital access  problems often faced by those from underprivileged backgrounds [Freeland 2018]. Lower barriers to  entry mean that a more significant number of individuals can participate in the entrepreneurial process,  increasing diversity and potential for innovation. 

Building Social Platforms for Networking and Collaboration 

Digital platforms can also mimic the neighborhood community's traditional networking and mentorship  benefits. They facilitate knowledge sharing and expand opportunities for sponsorship and mentorship.  This type of networking can expose underprivileged entrepreneurs to a larger world of ideas, strategies,  and potential collaborators or investors [Burt 2001]. 

Creating Natural Incubation Environments 

Natural incubation, a process of business development wherein entrepreneurial activities are stimulated  and supported within a community [Smilor 1987], is another avenue that digital platforms can help  facilitate. By providing a space for entrepreneurs to connect, share ideas, and work together, these  platforms can serve as virtual incubators, fostering a sense of community and cooperation. 

Providing an Accreditation Tool for Investors 

Lastly, digital platforms can provide an accreditation tool for investors. Studies suggest that  accreditation is essential for investors, providing a level of assurance regard