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Black History Month was established for all Americans to celebrate the countless contributions and recognize the sacrifices that Black Americans have made throughout history. Those have taken many forms, including social and economic justice, governmental service, the sciences, military, sports, academia, and business. But it is equally important to honor the contributions that Black Americans make today. In both past and present, there is one theme that is constant — tenacity and resilience, despite the significant odds.
In celebration of Black History Month, MassMutual shares the story of Rahkeem Morris, a Black entrepreneur who exemplifies resilience and reminds us all that Black history is American history.
Morris dropped out of high school to help address the financial needs of his family. Despite the setback, Morris later went on to graduate magna cum laude from college and received his MBA from Harvard Business School. While juggling part-time jobs for nearly a decade to pay for school, Morris founded Boston-based HourWork in 2017, an online employment marketplace that helps quick-serve restaurant chains recruit former employees who are already trained and ready to work. The software platform also invites employee feedback, enabling management teams to improve corporate culture and reduce costly turnover. And for the nation’s 82 million wage workers, it’s an opportunity to maximize their earnings by breaking the cycle of having to start each new job at minimum wage.
“For working class people, we’re providing them a lifeline of income that they can always tap into for the rest of their lives,” said Morris.
With a client list that includes more than 10,000 fast food franchises — including McDonald’s, Subway, Domino’s, and Taco Bell — his success speaks for itself.
Roadblocks and resilience
Morris had a viable business concept and a scalable model. Despite these strengths and his educational achievements, however, he struggled with a lack of access to financial and social capital, as well as other resources necessary to amplify his success.
He’s not alone. Research reveals the most common barriers facing Black entrepreneurs are:
- Access to financial capital — Statistically, less than 1 percent of venture capital funding in the U.S. goes to Black founders, a figure that mirrors representation among the nation’s largest venture capital firms themselves.1,2 A recent report confirmed that Black entrepreneurs frequently face a higher cost of capital and more stringent application process than white loan applicants.3
- Access to social capital — Black entrepreneurs still face racial stereotypes, biases, and discrimination, a systemic obstacle that negatively affects their ability to attract customers, build social capital, and cultivate professional relationships that help them compete.
The MM Catalyst Fund
An early-stage investment in HourWork by MM Catalyst Fund helped Morris get his start.
Seeking market rate returns, the MassMutual investment fund aims to serve underrepresented businesses, including Black-led startups in Massachusetts. It also collaborates with MassMutual’s First Fund Initiative, which invests nationally in private equity funds led by Black, Hispanic, and Indigenous entrenpreneurs. Through the MM Catalyst Fund and the First Fund Initiative, MassMutual’s total impact investment commitment has more than doubled to $300 million in just over two years in its efforts to cultivate a diverse future.
“It’s a partnership that we struck together that I am so proud to have,” said Morris of the MM Catalyst Fund cash infusion, noting HourWork has since raised a total of $18 million in venture capital through various rounds of funding. “It’s really been a game changer for us, and I couldn’t imagine us being here without the help of the team.”
Black-led businesses build wealth
Supporting Black business owners is an economic imperative. The Path to 15|55 initiative estimates that at least 600,000 new jobs could be created, adding another $55 billion to the U.S. economy, by transitioning 15 percent of Black businesses from sole proprietorships to employee-based firms.
By tearing down the barriers to growth of underrepresented businesses, we also create significant employment opportunities and the potential for market returns. Data reveals that the more than 3 million Black-owned businesses in America add more than $200 billion to the U.S. economy annually and employ roughly 1.2 million Americans.4
Black business ownership, it found, is also a proven pathway to wealth creation, with the median net worth for Black business owners reportedly 12 times higher than that of Black nonbusiness owners.5
That reflects an important opportunity to mitigate the persistent racial disparities in financial well-being.
While Black and Hispanic Americans have accumulated greater wealth in recent years, both still lag far behind most white Americans. Black households in 2022 had a median net worth of roughly $45,000, while Hispanic households had an average net worth of $61,600. That compares with $285,000 for white households.6
The MassMutual 2023 State of the American Family survey found that 44 percent of Black Americans view owning or starting a business as central to their definition of the American Dream. Hispanic Americans were the next most likely (40 percent), followed by Asian Indians (31 percent), Caucasians (30 percent), Koreans (29 percent), and Chinese (26 percent).
MassMutual applauds America’s Black business owners — the visionaries who never relent, despite (or perhaps because of) the headwinds they face. Through grit and determination, they are breaking down barriers, narrowing the wealth divide, and opening the door for the many who will follow.
Discover more from MassMutual …
Remembering MLK and his blueprint message
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1 Crunchbase, “Highlighting Notable Funding To Black Founders in 2020,” Feb. 12, 2021.
2 McKinsey & Company, “The economic state of Black America: What is and what could be,” June 17, 2021.
3 Federal Reserve, “2022 Survey of Consumer Finances,” Nov. 21, 2023.
4 Joint Economic Committee Democrats, “Building an Economy that Embraces and Empowers Black Entrepreneurship,” Feb. 22, 2022.
5 Congressional Black Caucus, “The State of Black Entrepreneurship in America,” April 2019.
6 Federal Reserve, “2022 Survey of Consumer Finances,” Nov. 21, 2023.
