Insights | 5 October 2022
the power of black wealth
To begin Black History Month, Coutts UK hosted a roundtable discussion with a number of Black entrepreneurs to debate and discuss the challenges Black and ethnic minority-owned businesses face as well as how better to encourage and grow Black wealth across society.
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In attendance for our panel discussion were:
- Sharmadean Reid: WAH Nails / Beautystack / The Stack World
- Annabel Ashalley-Anthony: Melanin Gamers
- Antoine Dixon-Bellot: ADB Films services, ADB investment, Mastermind Media
- Edwin Appiah: Partner, Cornerstone VC
- Michael Barrington-Hibbert: Founder & Chief Executive Officer, Barrington Hibbert Associates
- Farhana Ibrahim: Binta’s Kitchen
Together the group talked through a number of key points:
Lilian Chovin, Head of Asset Allocation at Coutts, says, “We believe it’s best to stay focused on the future when investing – we recommend looking ahead five years or more. How do markets look over the longer term? How does that match with what you want from your money over time?”Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
The transformational power of agency
Agency can initially come from good education, but the real impact only appears when you have the power of money in the form of capital. Our panel recognised the power of communities which don’t typically lack gumption and entrepreneurial spirit but are often constrained by the absence of inter-generational wealth, which can have two self-fulfilling impacts:
- Families who have never had money before see a culture around them of visible wealth, therefore the first thought is often to spend/buy, rather than save/invest.
- Not growing up hearing conversations about what to do with money means the next generation doesn't learn healthy financial habits.
So, talking about money, beyond just saving, and explaining and understanding investing, can have a big impact. The genesis of this approach has been seeing the power that the capital allocators (those who hold the pen on spending) have and wanting to make sure more of those people are in the Black community.
An economy experiences ‘stagflation’ when growth is stagnant and inflation is high. It’s an unwanted situation because money is losing value while investments into assets such as shares in companies aren’t making returns because there is such low, or even negative, economic growth.
Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
Raising investment & networking
We heard about the importance of planning – one highly successful founder spent two years working on her pitch. She became one of the first Black women in the UK to receive venture capital (VC) investment.
But that in itself is evidence of the problem as it is at the heart of the 'you'll have to work twice as hard' message that many in the Black community heard growing up. Unfortunately, the number of Black female entrepreneurs receiving VC investment is too low – it can be counted on hands and feet.
Our discussion affirmed that more transformational advice around raising investment, and all aspects of success in business, came from building networks – which all our panel had had to do from scratch. Because, while the communities they grew up in have plenty of that gumption and entrepreneurial drive, they didn’t have the ready-made networks.
Networks are what got the entrepreneurs their investors and first customers, often through those financial partners. Networks were also invaluable for getting advice on how to deploy that investment more efficiently.
The panel also talked about how Gen Z entrepreneurs are likely to bypass traditional sources of finance, certainly at the outset. They would often raise funds directly from audience bases on social media platforms. However, while that typically entrepreneurial route of breaking the rules and getting things done can provide important startup funds, it means Gen Z entrepreneurs miss out on those networks that can help them use that capital efficiently.
An economy experiences ‘stagflation’ when growth is stagnant and inflation is high. It’s an unwanted situation because money is losing value while investments into assets such as shares in companies aren’t making returns because there is such low, or even negative, economic growth.
Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
Normalisation
We spoke about the normalisation of Black success and wealth, and the lived Black experience whereby success can be negatively framed with a need for ‘justification’. In this context, equality means a level of Black and minority ethnic businesspeople reaching positions of power that’s in line with their white counterparts. It’s that broader excellence of Black entrepreneurs and professionals who are breaking through that corporates and investors are only just waking up to. It represents a transcendence of circumstance but there is still a long way to go to ‘normalise’ and to change those circumstances and perceptions, both conscious and unconscious, that can disadvantage Black businesses.
An economy experiences ‘stagflation’ when growth is stagnant and inflation is high. It’s an unwanted situation because money is losing value while investments into assets such as shares in companies aren’t making returns because there is such low, or even negative, economic growth.
Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
Success
What does success mean to our panel? For many it was bringing to life the key points we’d already discussed: creating agency for themselves; creating the wealth, security, and time to consider the world in a less chaotic way and taking the time to assess and strategise. That recognises a privilege that many other people have, which is the time to think ahead.
An economy experiences ‘stagflation’ when growth is stagnant and inflation is high. It’s an unwanted situation because money is losing value while investments into assets such as shares in companies aren’t making returns because there is such low, or even negative, economic growth.
Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
Lessons for the future
Finally, our group of entrepreneurs gave their lessons for all future entrepreneurs:
- Embrace failure.
- Build your social capital – create your networks: they can open doors in what may seem like a brick wall at first. Successful entrepreneurs can help build these by mentoring in Black communities.
- Allow yourself encouragement and recognise what you’ve achieved as you grow.
- Start investing, not saving, every month, as early as you can.
- Just go for it – you learn from the failures, and you will rise with the successes.
- Never give up – if it has been done, it can be done.
An economy experiences ‘stagflation’ when growth is stagnant and inflation is high. It’s an unwanted situation because money is losing value while investments into assets such as shares in companies aren’t making returns because there is such low, or even negative, economic growth.
Stagflation became financially synonymous with the difficulties the UK and other economies faced in the 1970s. The oil producing organisation OPEC embargoed oil exports to many western nations, pushing up oil and energy prices dramatically. The rise in the cost of living, fuelled in part by wage price spirals, coincided with stagnant economic growth, and unemployment was high while things got more expensive. This resulted in stagflation.
Although we currently have an energy shock, especially in Europe, as a result of the Russian invasion of Ukraine, the main driver of today’s inflation pressures was the pandemic. It led to a large demand for goods when strained and locked-down supply chains couldn’t cope.
Investment Outlook 2025
