Raising the bar for the underrepresented and underutilized Black middle market.

Like so many of us, my journey began with my grandma.

Evelyn grew up in the 1930’s and 40s in McComb, a segregated railroad town in southwestern Mississippi.

One day at age 12 or 13, as she was planting seed on the family farm, a car pulls up. A man gets out with a ruler. He had come to measure how far apart Evelyn had sowed the seed. Because according to Black codes – informal and formal systemic laws designed to keep Black people as second-class citizens – Black farmers like my grandma’s family were required to suppress their yields below those of white farmers. To enforce that, Black farmers were not permitted to plant their seed less than a foot apart, versus two inches for whites.

Black business owners still face inequity today. There have always been two doors to the American economy. And one of them, even if Black entrepreneurs pull themselves up by their bootstraps and persevere, leads to a passage rife with unique challenges, from access to multiyear corporate contracts and implicit bias in contract awards, to inequitable insurance/bonding requirements just for an opportunity to bid for new business, and sometimes elusive and hollow corporate supplier diversity contract programs that end up holding back their growth. As echoed by Treasury Secretary Janet Yellen, “From Reconstruction, to Jim Crow, to the present day, our economy has never worked fairly for Black Americans.” 

It takes a lifetime to build a middle market company, one with annual revenue between $20 million and $500 million. It takes generations for a Black business owner to get to $2 or $3 billion in annual revenue. And perhaps only 50 Black families (in my estimation) can tell that story today.

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In 2021, there were only five publicly traded, majority-Black-owned firms. That compares with approximately 4,000 publicly traded companies in the United States in 2024. Think about that for a minute.

Data like that, while stunning, does not shed much light on why there aren’t more $100-million Black-owned businesses and publicly traded companies, let alone what the U.S. economy could look like with more Black-owned firms.

Here’s a few of the many factors I’d like to amplify regarding the historical whys behind the data:

• The formation of Black-owned business in the U.S. has been historically delayed. You won’t find many Black firms active today with roots earlier than the 1940s for many reasons, including exclusion from fair financial markets, inherent and disparate distribution of federal economic programs commencing with the Freedmen’s Bureau Act in 1865, land theft, stolen innovations, forced land sales called partitioning, and racial violence.
• An Institute for Justice study shows that between 1949 and 1973, 2,532 eminent domain projects in 992 cities displaced 1 million people – two-thirds of them Black. 
• An Associated Press (AP) investigative series, published in 2001, reported that hundreds of Black landowners lost more than 24,000 acres, including stores and city lots — worth tens of millions in today’s dollars — through unethical legal tactics and racial violence between the Civil War and 2001. 
• In 1910, the AP reported, Black Americans owned at least 15 million acres (6 million hectares) of farmland, nearly all of it in the South, according to the U.S. Agricultural Census. Today, Black Americans own only 1.1 million acres (440,000 hectares) of farmland and are part owners of another 1.07 million acres (428,000 hectares).  
• Until the civil rights struggle of the 1950s and 60’s, Black Americans were powerless to prevent the taking of their farmland, according to Stuart E. Tolnay, a University of Washington sociologist, interviewed by Associated Press. 
• In recent times, the whys behind the dearth of $100-million Black-owned businesses and publicly traded companies is tied more to policy, such as federal rules that require the inclusion of Black-owned firms in government and diversity contracting programs (i.e., affirmative action) that have come under fire, and lack of institutional knowledge within Black families:  Where do you turn for trusted advice about growing your company when no relatives are Fortune 500 CFOs, CEOs, or investment bankers or have even worked in corporate America? 
• Another why is that while  supplier diversity programs may initially spur business, they  may ultimately limit Black-owned firms’ growth, as sometimes lucrative procurement decisions are made with business decision-makers that sit outside the supplier diversity channel. 
• The federal government’s efforts to bolster the inclusion of Black-owned businesses in contracting have come under attack from multiple fronts. The legal landscape, political environment, economic stress, and technological and market changes are all influencing the scope and focus of federal contracting programs and make their outlook dynamic and uncertain.
• Historically, diverse-owned businesses, including Black-owned firms, have been underrepresented as primary contractors in federal procurement. The cost of entry to some supplier diversity programs is so high and complex that Black-owned firms do not qualify for various opportunities. As a result, Black-owned companies are far too often subcontractors and seldomly the prime awardee.

As head of the Black/African American Segment for Wells Fargo Commercial Banking, I am on a journey, striving for the commercial banking industry to be in a place where we understand the “whys” and the unique needs of Black owners of middle market businesses. 

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