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the future of work for everyone, by everyone

EPISODE 6

 

The future of minority wealth with Henry Childs II

A. Walton Smith, Head of Content and Community Engagement at We Are Rosie and Founder of Black Woman Owned passes the mic to Henry Childs II, Founder and CEO of the Minority Wealth Commission, the largest multi-stakeholder organization solely focused on eradicating the racial wealth gap and finance the minority economy. In this episode the two discuss advice for minority business owners and what the ideal future of minority wealth looks like.

 

TRANSCRIPT

Walton: Hi everyone. I am A. Walton Smith head of content and community engagement at We Are Rosie and the founder of Black Women Owned and you are tuned into Pass The Mic by The Rosie Report podcast. In each episode, the guest from last week, me, talks to another rebel for good. Change-makers who bravely opted out of traditional employment and turn their life’s work towards a mission that is also changing the paradigm of work. Last week, I talked to Brad Grossman about the future of inclusive online communities. And this week I’m excited to talk to Henry Childs II, founder and CEO of the Minority Wealth Commission, the largest multi-stakeholder organization, solely focused on eradicating the racial wealth gap and finance the minority economy. Amazing. Welcome to The Rosie Report podcast Henry. I’m extremely excited to talk to you.

Henry: I’m excited too. Thank you for having me.

Walton: Of course. You’re amazing. What you do is amazing. So it had to be done. We’re going to go ahead and get right into the questions. So for everyone out there who’s listening, who may not know who you are, can you describe to us what it is that you do?

Henry: So I’m not here trying to raise the largest minority wealth fund in the world. Right now there’s so much money out there. There’s so much money out there. I mean, we know congress, they kicked out their $2 trillion stimulus, which I’ll get into later. We know that the Federal Reserve’s printing money. And when you talk to these institutional investors, they talk about hundreds of billions of dollars of dry powder, just sitting out there. So what Warren buffet said is when others are fearful, be greedy. So we’re being super greedy and it’s not because we’re vulture capitalists or anything like that. We’re being super greedy because every single day I get a phone call from a struggling minority business that is just talking about, they cannot get to the money. They can’t get it from friends, they can’t get it from family, they can’t get it from their own bank.

I mean, what’s the purpose of having a bank if you can’t get money. And we know that both the BCs and PEs aren’t funding people of color. So what I decided to do is I’m working with institutional investors to do the huge fund, to finance a minority economy and it’s equity and it’s debt. On the equity side in July, we announced a $250 million FVLCRUM fund, which is going to be that late stage growth capital that these businesses need to expand. I’m truly excited about that. They said, Henry, are you crazy? You’re going to do a… you’re going to raise a $250 million fund in this economy for black and brown people and women. And I said, “Yes, and we’re going to close that thing in four months.”

Walton: I’m beaming over here. Yes, yes, yes. Oh my God.

Henry: We’re going to do it. And then on the debt side, we’ll have just enough to partnership with JP Morgan Chase to do two things. We’re going to increase the number of black households that are fully banked. Right now only 46% of black households are fully banked. And we’re also going to have a mentorship program where JP Morgan Chase is going to mentor black banks to get them the capital they need and the resources they need. So we’re pumped up. So long story short, I’m out here trying to raise a hundred billion dollars over the next five years and jumpstart the minority economy.

Walton: Oh my gosh. I mean tears. Okay. That is so amazing. And it’s so necessary and I’m so glad that you’re doing the work because everyone does not see the value in black and brown people and women, but we all know that we actually make this world move. So I’m just going to leave that there. That’s amazing. Wow. Thank you for this work. So were you doing this work before 2020 and if so… which I know, yes… if so, what did you see that other people did not see?

Henry: So before 2020, what I saw, I saw a flood. I saw a flood of biblical proportions and it was really the future of work, which is what I was focused on. Because this space, this future work stuff, we’ve been talking about this for the last two to five years, but what CVOID did is it accelerated it. Because what we’re supposed to see over the next two to three years of future work, the rise of machines, COVID hit and it happened in two months. And that’s why you see this new world where the companies who went through the digital transformation years ago, they are seeing record profits. I mean, you see it in the stock market, record margins, record market cap, and they’re killing it, like Amazon. And then you see companies that didn’t start or didn’t finish their digital transformation and they are being delivered pain in the marketplace right now.

And it’s not just certain industries like retail or restaurants, it’s all industries. So what we’re trying to do is we’re trying to get more minority businesses to transition to the digital economy and we’re telling them the truth. And I think this is really important because a lot of times… I just have to say it, minority businesses are lied to. And they’re told you’re not getting funding because of your skin color. Is that the case a lot of times? Yes. But what’s also true, especially right now is, your business isn’t the right business. Business has changed. There’s the digital world and there’s everybody else. And if you can’t meet your customers, let’s say you’re in the restaurant industry right now. If people can’t order food on an app and you can’t get it to them through some type of delivery service like Uber Eats, then your business is probably closed. And that’s what we need to be doing is helping minority businesses transition to the digital economy because that is the new normal and it’s not going anywhere. So what I saw was a flood. So I decided to build an arc.

Walton: Oh my goodness. Hold on. Keep that. We’re going to Tweet that. That’s going to stay. Okay. Thank you. I’m keeping that for myself. That was amazing. And I think it’s just really important that you say that we need to give the right information. Because you’re right, people lie and it is unfortunate to hear and see that that takes place. But again, thank you for doing the work to make sure that that’s not going to be a thing. A hundred billion you said in five years?

Henry: A hundred billion.

Walton: Yeah. It’s going to happen. Yeah, completely got to be done. Okay. So prior to 2020, we talked about the flood and the arc and again, great reference. What was the defining moment for you to take action to even start this journey?

Henry: Yeah, so I was running the minority business development agency. It’s the only federal agency that’s solely devoted to helping minority businesses grow and compete in the global economy and COVID hit. And then Congress and this administration, they just felt the people. And I’m just going to flat out say it. I mean, we saw the $2 trillion cares act and I want to call it the uncares act because I mean, I don’t even know what they were thinking. So the plan was, we’re going to force businesses to close and then we’re going to make them compete for loans from their banks. And I was in the administration. I was screaming guys, this is going to be a travesty and it flat out was. So I decided I need to go into the private sector to really help these minority businesses because they were getting destroyed.

And we saw from February to April 40% of black businesses shut down. 40% from February to April. So I left and I immediately started the Minority Wealth Commission, which as you mentioned, it’s the largest multi-stakeholder organization that’s dedicated to eradicating the racial wealth gap. And that’s super important because we see extreme inequality and just huge gaps in wealth right now and nobody was filling that void. So we decided to get the ethnic chambers, to get the civil rights group, get some fortune fifties and we’re going to go out there and we’re going to eradicate this racial wealth gap and really drive equity, justice and equality. 

Walton: I love it. I can’t say enough. I’m probably going to be saying this the whole time through the podcast, but thank you. Especially as a black woman, to hear that this is happening and to read about it happening and to be able to tell people, it’s going to be okay, we need to hold on and we need to read more and invest more in ourselves. But also follow what you’re doing because that money is going to be there for us. Amazing. Okay. So, so much has changed in 2020. What do you see now, and you kind of spoke about this, that you didn’t see before?

Henry: So I think it’s young people, I mean, the action from young people. Post-millennials, they’re the youngest and most diverse generation in American history. There are more post-millennials than there are baby boomers and they have a completely different ethos. They’re focused on environment and they’re focused on social goals. So what you’re seeing is you’re seeing corporations trying to figure out how to market to them. And that’s why you see these young people… if you don’t believe what they believe in, you don’t value what they value, they’re just not going to do business with you. And I just think it’s amazing and that’s something that I did not predict, just how they… they’re not about incremental change at all. My generation, we’d be like, oh, incremental change. We’ll get there someday. We’re going to pass the baton. These young people, they’re not passing anything. They want change and they want it now. So that’s what I’m seeing. 

Walton: I can absolutely agree. It’s really interesting because the groundwork was laid for the generation before and the generations before that, for millennials now to be no, we’re stopping this right now. Either you can have our business and change or you can not have our businesses stay the same. And it’s so interesting because not only that, the generation behind millennials are following suit. They’re even… they’re more fierce really to me than millennials and they’re getting their bearings. So that is a really great observation. I completely… wow, I completely agree with you on that. Okay. So has your mission changed at all? It seems like it’s basically the same, but has it changed at all since this whole COVID situation and the resurgence of black lives matter and civil unrest in America? Has your mission changed at all? So maybe a focus… a little bit different or maybe taking your path or deciding to go a different way on the same journey? Does that make sense? 

Henry: Yeah, I think it has changed. I think it’s made me focus more on the importance of capital. I never thought I’d be out here raising these large size funds. I am an attorney by trade. I try to… you do what you think you know to do, try it though still arise activism, tried the politics, tried everything and it wasn’t enough. So I figured out that people who are really making a difference are the people with the money. And so unfortunately growing up black, we didn’t have the money and that’s why you see us just suffering and out here protesting and I heard fighting every day for basic human rights. I mean just the basics. So I decided I’m going to get out there and I want to basically be a source of capital and a source of inspiration for black and brown people everywhere. 

So what’s changed is just my intensity. I’m just taking on just more than I’ve ever taken on before. And I’m really, really, really focused on this new innovation. Because what I tell businesses is look, these waves of innovation are coming every 18 to 24 months. They just are. And the companies that are thriving, are the companies that can build new concepts and new capabilities and catch these waves. So what you have to do is you have to go digital. And so what we’re doing is we’re bringing the financing, we’re bringing the management source to them, and we’re also building this huge network trying to connect the diaspora. Because we think that we’re the minority in America, but when you look at the globe and you just look at Asia and you just look at Africa, you look at Latin America, South America, India, I mean, it’s black and brown people. But we don’t leverage that. And I’m trying to change the mindset and leverage that we live in a global world and we’re just trying to connect the globe to help people get to the money. 

Walton: I love it. We don’t leverage it. And another great observation, we are actually not the minority when it comes to a global standpoint. Wow. Thank you. I’m just overwhelmed with how great this conversation is going. So what would you… what advice would you give to a small minority business that is interested in receiving funding and getting help, but they’re not quite ready to, I guess, raise the money? So people go out and they try to get funds from other people, whether it be venture capitalist or grants. What do you tell that small business who was getting ready to start asking for money, but is not quite there yet? 

Henry: I tell them you’re never going to be ready. I haven’t been ready for anything I’ve done the past three years. I wasn’t ready to run the minority business development agency, which is in charge of 11 million minority businesses. Wasn’t ready for that. I wasn’t ready to leave and then immediately start a nonprofit, immediately start raising a $250 million fund, and immediately start a global management consulting business. The fact of the matter is you just have to, you have to get out there. The hardest thing, actually… a lot of people think the hardest thing is talent and the know-how, that’s not the hardest thing. The hardest thing is breaking out of obscurity. The problem is how do you get to people who can fund you? And my hardest part was I was doing all these great things, but nobody knew about it. So I’m killing it in a vacuum. 

So when I was able to get to the right people, that is when it’s life-changing. Because like I mentioned before, there’s money out there now more than any time in my life. People are actually trying to invest in people of color because look, these businesses, they’re not crazy. And they see the demographic change happening in America. And they know that it’s going to be black people and brown people buying their products and they’re trying to make a dent in that now. The number one thing is how do you get to those people? And that’s why we built The Minority Wealth Commission and got all these groups together to help people navigate this world. 

Walton: Thank you. Okay. I’m really like putting the gems down in my head as you speak. This is wonderful. What does the ideal future of minority wealth look like to you? 

Henry: A self-reliant, self-sustaining minority economy. We’ve tried this, we’ve tried to integrate into this capitalist society since we were brought to this country and it hasn’t worked and we’ve faced barriers, everything, we start a business, then they throw Jim Crow at us. We do another… start another business and then our business get burned in a black wall street, and then it’s discrimination. It’s like every step we go and every time we try to do what they say to do, we end up getting hurt and we end up getting left behind. So the only answer is at a certain point, we have to build our own economy. We have to control our own economics. We have to control the stores in our community. We have to control the banks in our community. We have to control the educational system, the housing in our community. And that’s really what we’re trying to do. We’re not trying to say, hey, we don’t want to be a part of the main economy. What we’re saying is, hey, we don’t want to die when we’re left out and that’s what we’re focused on. 

Walton: Wow. Mic drop. Okay. The mic was passed. And then you just left it right there. That… wow. And it’s so funny that you say that my father… we were just having a conversation that black and brown people, the wall has been put up against us since this country was founded. And it’s amazing that despite all of these walls and these boundaries, we are still finding a way to better ourselves and to then move into self-reliance. I can only imagine what this world and what America would look like. So thank you for being a part of what the future of minority wealth will look like and what it will be for myself and everyone listening. Oh man, extremely appreciative. Thank you so much for talking with us today, with me about your journey. Where can people find your work online?

Henry: So we have a website www.minoritywealthcommission.com. If you’re interested in our fund, you c go to www.fblcrum, F-B-L-C-R-U-M.com. And then you can hit me on LinkedIn. You can find me on Twitter, Henry Childs II and I’m out there.

Walton: Awesome. Thank you so much. That is it for this week’s episode of Pass The Mic by The Rosie Report. Tune in next week, when Henry talks to Lauren Ruffin, co-founder of Crux. Until then subscribe to the podcast on Spotify and Anchor, and be sure to check out more stories on building the future of work, for everyone, by everyone at The Rosie Report.

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