IYKYK: Black-Owned Businesses Are Being Acquired by Major White-Owned Companies
Black-owned businesses experienced the quickest growth from 2017 to 2020; the greatest increase was seen in Black women-owned businesses.
According to the Brookings Institute, businesses owned by Black women increased by 18.14%, outshining women-owned and Black-owned businesses, which increased by 9.06% and 13.64%, respectively. Amid the growth trends, there have been concerns about Black companies being sold or taken over by white businesses, according to Forbes.
The outlet raised the question of whether business acquisition is a sign of gentrification of Black businesses, a process to appeal to a wealthier group of consumers. As companies strive to cater to a larger audience and achieve a high level of success, it is often followed by acquisition by large white-owned companies. This often leads to detachment from the Black consumers that once helped the Black-owned businesses flourish.
Black business owners believe these partnerships present new opportunities for financial success and other opportunities. However, some people believe business acquisitions have some negative effects. Tami Hall, shared founder and CEO of Prestige Blinds LLC, said, “If you’re a serial entrepreneur and the numbers are right, it makes a lot of sense to build it, grow it, sell it, maintain a stake, and move on to the next venture.”
“I firmly believe that this ‘fast money’ mentality somewhat works against our people when it comes to building generational wealth and community,” she continued. This raises concerns from Black consumers that products will no longer have the cultural significance and value they once held. This notion has been deemed as “selling out,” according to the outlet.
Entities such as Black Entertainment Television (BET) were Black-owned from 1980 to 2000 before being acquired by Viacom Inc.
In light of concerns about Black businesses being consumed by white corporations, Fee Bolden, serial entrepreneur and founder of RootedinBlk, said these concerns may be due to a “lack of exposure.” “Business acquisitions have resulted in some of today’s most notable companies, such as Instagram, Uber, Airbnb, and Netflix, to name a few. Not only were these great opportunities for their founders, they’ve created millions of jobs and wide-ranging opportunities for millions of people,” she said.
“I personally wouldn’t advise any Black entrepreneur to launch a business that is not acquirable. Freedom should be even more of a goal than perceived legacy,” she continued.
What happens after a business is acquired is significant. As previously reported by BLACK ENTERPRISE, TikTok star Veronica Shaw created a Pink sauce and partnered with a company that she alleged never reimbursed the out-of-pocket costs she paid, causing financial struggle.
Black business owners often start businesses to cater to the overlooked needs of the community. Thus, Black-owned businesses are tasked with considering how business acquisitions and new partnerships affect consumers who have supported the company from the beginning.