Supporters of racial equality should use their money to support BAME-owned businesses and BAME professionals , according to the head of a venture capital fund that invests in European startups led by people of colour and women.
Eric Collins, the chief executive and co-founder of London-based Impact X, said the public should not underestimate how their spending habits impacted the lives of people from black and minority ethnic backgrounds – especially in their own communities.
“Capitalism is driven on money, so use your money to drive the results that you’d like. It’s the same thing anyone else does, just do it deliberately,” Collins said. “Go to see your hairdresser, go to your daycare centre that’s run by someone who’s an underrepresented person.”
He added: “Even if you’re going to a large organisation like KPMG, if your money is being spent with an individual who is an underrepresented young associate, that person who has a client can say they have billable [hours] and has an opportunity to get to partnership.”
Collins, originally from Alabama in the US but now based in the UK capital, said the spending power of people of colour in the US alone was worth $1tn (£790bn), and could have a significant impact if it was focused on black-owned businesses.
“You should always be thinking about: are the things that you’re doing – your actions as well as your financial resources – helping to challenge or reinforcing the world that you don’t want to see?” he said.
Collins said he hoped the Black Lives Matter movement would attract new institutional investors to funds like Impact X, which has attracted high-profile investors from across the black community including comedian Lenny Henry, the actor Adrian Lester, and Uber board member Ursula Burns.
Impact X, which is black-owned and managed, has invested in 17 businesses so far, including three London-based firms: Predina, which is behind smart navigation software that predicts the safest route for drivers; Pace, which uses AI to help hoteliers determine what price to set for rooms; and Raylo, an iPhone leasing service offering a new handset every two years for a monthly subscription of less than £50, before selling the devices abroad.
But Collins, who is attempting to raise a total of £100m for the first fund, said the UK investment community had yet to fully recognise the potential of BAME and female entrepreneurs. “What we note and what we have seen, and these protests continue to show, is that does not seem to be the case. It seems as though some of the investment community of the UK has not found us yet,” Collins said.
His comments come after another weekend of protests over the killing of George Floyd by Minneapolis police last month. The unarmed 46-year-old black man was killed after an officer kneeled on his neck for nearly nine minutes. Four officers now face criminal charges.
Carum Basra, corporate governance policy advisor at the Institute of Directors, a business lobby group, said consumer and investor demand could be a “huge driver for change within business”.
“Business leaders will also need to be proactive in showing they understand the concerns of the BAME community. Widening the route to the top of business, so that boards better reflect the society they exist within, is crucial.”
Sue Coe, a senior equality officer for trade union umbrella body the TUC said systemic discrimination could not be solved by “warm words alone” and urged employers to identify and tackle the barriers facing BAME workers.
“That means publishing their ethnicity pay gaps and monitoring staff recruitment and promotion. We need companies to produce robust action plans to deal with inequalities in their workplaces.”
