THE GLOBAL protests that followed the death of George Floyd in May 2020 triggered heated discussions about the links between economic and racial inequality.
Equality campaigners have long pointed out that the seemingly ever-widening differences in income and wealth between black people and other communities invariably translate into similar disparities in political power and influence.
Building generational wealth through assets such as property, business ownership and investments is no easy task. And it’s an especially difficult battle for black Britons when you take into account the fact that on average, they have less family wealth.
According to a December 2020 report by think tank Resolution Foundation, people of African and Caribbean heritage typically hold the lowest wealth with a median figure of £24,000 in family wealth per adult. This is less than one eighth of the figure for a person of white British ethnicity, which stands at £197,000 in family wealth per adult.
Now one entrepreneur, prompted by statistics like these, is seeking to inspire black communities to take their economic destiny into their own hands and use it as a tool to challenge inequality.
Eric Collins is well known as the driving force behind Impact X Capital, a venture capital fund aimed at investing in under-represented entrepreneurs from the African Caribbean community and women in this country and across Europe.
Collins’ passion for the way in which entrepreneurship can have a transformative effect on society is evident in one of his latest roles as a newly appointed ambassador for the Prince’s Trust.
“My focus with the Prince’s Trust is on the enterprise group” he reveals. “These are young people who have a business or could be working in someone else’s business. My role is to spend time supporting them and help them gain access to the right sort of networks in order to be able to progress their visions and become the drivers of change that we know underrepresented people can become.
“The Prince’s Trust works with some fantastic people around the country who, when supported in the right fashion, can create a certain type of magic. It’s not just that they’ll be able to change their own circumstances and those of their families. They will be able to help communities, the country and ultimately the world. That jives very well with what we do at Impact X.”
The vision that Collins and his founding team had when Impact X Capital was launched has now been boldly articulated in his new book. In We Don’t Need Permission: How Black Businesses Can Change Our World Collins argues that supporting under-represented entrepreneurs not only creates wealth, it drives the kind of social change and racial equality that thousands of protesters called for during the protests at Floyd’s tragic chase.
“We as black people have been organizing, marching and protesting against racial and social injustice forever” Collins tells The Voice. “And these are very useful tools to get us to a certain point. But in the ongoing struggle for racial and social justice there are other things we might need to actually do. Too often we as black people have to go to other people or institutions to ask for money, for capital or permission to do what’s needed.
“For example, if we decide that George Floyd’s death is the most important issue of the century, and we want to support a constant campaign of information and action against police brutality or the strip searching of our young people then we need money to not only get above the noise, but to keep that campaign going for decades. And we just don’t have the economic capital to do that.”
He continues: “One of the reasons we don’t have the capital isn’t because we don’t have good jobs. It’s because we don’t have the kind of capital in our communities on the scale of Jeff Bezos and Elon Musk. They have this kind of capital because they built big businesses, companies that allow them to dominate headlines in media around the world. These companies impact markets, governments, they impact our lives.”
For black communities to have this kind of impact Collins says new thinking is required about how to create Black-founded global Fortune 500 and FTSE 100 companies that are generation-changing, which he defines as having huge positive social impact.
In We Don’t Need Permission he outlines ten principles of entrepreneurship aimed at addressing systemic barriers to economic empowerment that black people have traditionally faced.
These principles are drawn from the successes and failures of entrepreneurs, major corporations and executive teams as well as his own business career and experience as the host of the acclaimed Channel 4 TV series The Money Maker.
“We don’t yet have a group of people who can bend the attention of society towards issues they believe in for a sustained period of time by using their business resources and capital” he says. “Yes, we definitely need small businesses because all countries run on small businesses. But we need a handful of large black companies which can be drivers of real sustained change.”
Collins’ career embodies the ethos that economic empowerment is the key to solving the multiple problems that result from systemic racial and gender inequality.
As well as being a serial entrepreneur and technology executive who has helped transform the value of companies such as AOL, MobilePosse and Micro SwiftKey Collins’ business acumen led to former US President Barack Obama inviting him to join his Small Business Administration Council in the White House .
In 2018 he led a group of prominent black European and US entrepreneurs, investment bankers, corporate leaders, and entertainers that would eventually launch Impact X Capital. And as CEO of the venture capital firm he has invested in and helped transform black-led companies which have gone on to have major social impact.
Last year, after backing from Impact X Capital, digital insurance company Marshmallow, founded by twin brothers Oliver and Alexander Kent-Braham and David Goate, became the first Black British led company to achieve unicorn status, which means a business is valued at more than $1 billion.
“When we invested in the company, 20% of the leadership and employees were black and more than 50% were women”, says Collins. “The type of impact we have created is not just that there are some newly minted wealthy black people. We have created great resumes for a whole bunch of other black people and women who work for Marshmallow because of the skills they’ve developed in using the artificial intelligence which the company uses.
“That makes them very much in demand. Those resumes also give those people an opportunity to start their own companies, because investors will recognize their skills in helping build a successful organization. The money they earn can also be used to pay off student debt, buy a house or to be used for philanthropic reasons.
He continues: “We know that people of color and women are more likely to hire and support other people of color and women and this creates economic opportunities at an amplified rate. As this continues there is a flywheel effect. From day one of our investment strategy we’ve been able to identify these sorts of opportunities and be part of this kind of fantastic ecosystem.”
We Don’t Need Permission: How Black Businesses Can Change Our World is out now