Rising Black-Owned Businesses Face Acquisition Dilemma: Gentrification Or Growth?
With the increase of Black-owned businesses, there have been concerns about Black companies being sold or taken over by white firms.
From 2017 to 2020, the number of Black-owned businesses across the country increased by 13.64%, and Black-owned firms brought in an estimated $141.1 billion in gross revenue in 2020 – an 11% increase since 2017.
However, according to Forbes, there has been a trend where Black-owned businesses are being sold to or acquired by white-led companies.
They raised the question of whether the business acquisition is a sign of the gentrification of Black businesses.
Are Black Businesses Being Gentrified?
As some companies strive to cater to a larger audience and achieve high levels of success, the success is often followed by acquisition by large white-owned companies.
Forbes considered that through white acquisition, Black-owned businesses may strive to make their product or service more appealing to different populations.
Acquisitions have led to detachment from Black customers that initially helped Black-owned businesses flourish.
Monique Rodriguez, founder and CEO of multi-million dollar natural hair care brand Mielle Organics, announced she had sold her company to P&G Beauty at the beginning of this year.
Black Twitter expressed annoyance, although Rodriguez and her husband remained the brand’s CEO and COO.
“I don’t wanna hear nothing about supporting Black businesses because the second Black companies get all the support they need from the Black dollar, they hand everything over to the person with the biggest check,” said one Twitter user.
CNBC reported that Rodriguez viewed the move as “selling up”, not selling out and said the backlash was due to the lack of general knowledge about what goes into building a business.
What Are Black Business Owners Saying?
Forbes states that Black business owners believe these partnerships present new opportunities for financial success.
Fee Bolden, serial entrepreneur and founder of RootedinBlk, said 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,” she told Black Enterprise.
“Not only were these great opportunities for their founders, they’ve created millions of jobs and wide-ranging opportunities for millions of people.”