‘Change the trajectory’: Black Opportunity Fund hopes to spur systemic progress

While Black-owned businesses have seen a groundswell of public support in recent years, especially on social media, business owners and entrepreneurs consistently struggle to overcome a massive hurdle to their success: access to money.

Historically, studies have shown that Black individuals are perceived as being high-risk when it comes to loans. Colin Lynch, co-founder of the Black Opportunity Fund (BOF) says a survey of Black entrepreneurs conducted by Abacus Data confirmed this occurrence repeatedly.

“What we see quite consistently is that [Black business owners] are viewed to be higher risk. As a result, they’re less likely to receive the loans that they’re asking for, they’re more likely to be charged higher interest rates and they’re actually most likely to be denied,” he told CityNews. “We’re also seeing some data and some surveys that indicate that the percentage of venture capital funding that’s going to the black community is extremely small, despite there being a significant number of innovative black individuals looking to found startups.”

Boosting Black business

To counter this ingrained societal inequity, Black Opportunity Fund has established a pool of capital with the help of banks like TD and National Bank of Canada, corporations, governments at all levels as well as individuals.

That capital is provided to Black-led businesses and entrepreneurs in the form of loans as well as equity investments. Some businesses receive “non-repayable support,” which will soon also be extended to charities and non-profits.

Lynch explains the idea for the fund was birthed in 2019 “with a group of individuals that looked at what existed in the Black community and what could exist in the Black community.”

Pandemic-fueled losses of Black businesses throughout early 2020 as well as the murder of George Floyd in May of that year galvanized the group to take action.

“By the time it got to June 2020, we said we have to do more than just talk about what we’d like to do. We actually have to now start acting,” he said.

In 2021, BOF partnered with the Coalition of Innovation Leaders Against Racism (CILAR) and Pitch Better, to provide cash grants to Black-led businesses that were impacted by the COVID-19 pandemic. Funded by Facebook, now Meta, they were able to support 55 businesses.

Lynch says they received 1,455 applications for that program, and those who did not receive funding were still provided with other supports.

“We’re designed to provide financial capacity, but we also want to provide wraparound support that actually helps those organizations, those businesses, those entrepreneurs, those individuals, to build their capacity, to grow, to create jobs, to create employment down the line,” he said.

In this financial quarter, Lynch says they’re opening up a “much bigger pool of capital” thanks to contributions from 40 different banks and corporations. He says they have thus far raised “tens of millions of dollars” which will be distributed to the community over the next five years.

“We’re not at our max though, so we’re still raising capital. As we raise more capital, we hope to support more and more businesses. Eventually we would like to support over 8,000 Black businesses and entrepreneurs and over 450 charities and non-profits,” said Lynch. “Over the next decade, we’d like to be able to provide over a billion dollars of support into the community” said Lynch.

BOF is also a registered charity and donations from individuals are also welcome.

Changing the trajectory of a community

Lynch says the fund’s big-picture goal is to dismantle anti-Black racism by funding Black-led ventures, which will ultimately improve the community’s social and economic well being and benefit the country at large.

“You change the trajectory of a community. You change the perception of somebody’s ability when they see an organization or funder actually tell them ‘yes,'” said Lynch. “That gives them confidence. That confidence plus the certainty of funding allows them to go hire other people, allows them to form expansion plans, and that’s what creates economic growth. And so ultimately, that helps our country.”

As an example, Lynch cites a business BOF funded that conducts important medical research, “not just on conditions that impact the Black community, but conditions that impact the community at large.”

Further, Lynch says seeing Black individuals as successful business owners, as employers and as founders of charities will also help change some of the “systemic perceptions” of the Black community in our country.

“That’s how you begin, call it ‘dismantling’, some of the systemic racism — where you see many, many, many instances of individuals in the Black community that are powered up to be able to make great contributions.”