DiversityInc Magazine, 2006 |
Black Enterprise Magazine, 1996 |
You
have to acknowledge what’s going on. And then you have to develop efforts to address those gaps with respect to capital access.
We’ve seen a number of [new] funds that are focused on African-American
women entrepreneurs. What they’re finding is exactly
what we predicted: that there’s a large group of very talented entrepreneurs
with good companies that are well-positioned to make abnormally high financial
returns that have been locked out of the market because of the irrelevant
factors. Now that they are beginning to get capital, they are going to do well.
We just rebroadcast our webinar, “How to Finance an African-American Woman-Owned Business in 2018,” and on the initial broadcast,
we had about 40 African-American women entrepreneurs on the call, all doing
very interesting stuff. So, we’ve helped uncover the demand for capital there,
and we will continue to develop new tools that will flow capital resources into
that space, because we think the returns are going to be higher than
average.
6. What impact has the financial crisis had on communities of color?
Census data has shown that Black median net worth decreased 61 percent from
2005 to 2009, and a white family lost 21 percent of their wealth. Both are
devastating declines in wealth, but whenever you have a 61 percent decline
impacting a specific community over a very narrow window of time, it leads to
greater social cost.
Long-term, we know that this decreases the economic activities for the economy
overall, because if you lose 61 percent of your wealth, that means that you
don’t have the money to invest in houses, invest in new businesses, invest in
sending your children to school, all of which generate additional economic
activity. It has been, and continues to be, devastating economically on the
communities involved.
And it’s not just that one time period. From 1983 to 2013, the median wealth of
Black and Latino households declined by 75 percent and 50 percent,
respectively, and median white household wealth rose by 14 percent.
You may think: well, that’s on them, that’s their fault, that doesn’t affect
me. Eventually, it will affect you. That’s the reason why you should care. No
matter where you fall along the wealth distribution, our contention is that
everybody is better off with a fairer, broader wealth distribution. The reason
is purely economic; if everybody has more money, then everybody spends more.
7. You’ll be speaking at the FPA Annual Conference on the future of
blockchain. Can you give an example of how blockchain technology is being
used for social impact?
One of the most interesting ways we’ve seen blockchain being used for social impact is
to enhance food safety—basically, tracking the path of food from its origin to
its consumption point in a much more efficient way than has been done in the
past.
IBM, Walmart, and a number of other companies came together on Capitol Hill
earlier this year to talk about how they are using blockchain technology to enhance food traceability and
transparency. When you have something like an E. coli outbreak, the current
response of the food industry is to throw everything out, because you don’t
know where it came from. Blockchain allows you to narrow that down. It
allows you to say, we’re throwing out this pallet because it came from that
farm, but we’re not going to throw out this other pallet. Blockchain technology
can tell you where to look so you can run the analysis and determine faster and
with much greater efficiency, which food products are contaminated.
If you’re really interested, I encourage you to look up Hyperledger and
Solidity. Get involved and learn the software. Any finance professional in the
U.S. should learn how to code in blockchain. If you really want to protect your
job 20 years down the road, you will learn this.
8. You’ve been tracking Bitcoin since 2011. Is there anything wrong with
Bitcoin as an investment?
No. I think it’s a fine investment, as long as it’s done in moderation and as
long as you understand the risks that are embedded in the system. You should
have some—a minimum $100 position—in Bitcoin, just so you can see how it works.
We like a number of tools, including Coinbase, a platform where you can buy small amounts of Bitcoin and other
cryptocurrencies. Another platform is Etoro. It’s very elementary, but it’s a good way to get introduced. (By using this link, you can get $30.)
9. You also serve as managing partner for National Crowdfunding Services.
What role does crowdfunding play in society’s economic success?
This idea of social finance is a powerful one. The Statue of Liberty was
crowdfunded. People sent in a dollar here and a dollar there. The civil rights
movement was crowdfunded. Martin Luther King Jr. would go around to churches
and they’d pass the hat to pay bail for people arrested during the civil rights
movement. All of the digital currencies are crowdfunded. Some of the new
financial technologies based on digital currencies—I’m thinking about ICOs—they
all are crowdfunded.
This idea of pooling money together is a very positive and very powerful
approach. We’ve seen what’s happened with sharing cars and sharing apartments
and sharing scooters. We think we’re just at the beginning stage of applying
this way of thinking in terms of crowdfunding and shared resources. We think
it’s the future. Social financing is going to be a key part of the new economy.
10. In June 2016 you predicted Trump would win the presidency. How did
you get it right when so many others got it wrong?
Our independence allows us to be objective. A lot of people were forecasting
based on their preferences or based on their institutional ties. MSNBC was
forecasting Hillary Clinton to win, because they really, really wanted her to
win and their ties to that kind of social network didn’t allow them to look
around the corner for other evidence that might run counter to what everybody
was predicting.
Independence and objectivity are our specialty. And having this level of
objectivity is not costless. There are people, clients, institutions, and
others who won’t deal with you because they think, this guy doesn’t toe the
party line, he’s not saying what we want everybody to say.
In June 2016, looking at social returns, social data, as well as financial
data, our models were saying, there’s something going on here; everybody’s
undervaluing this candidate and this approach, and our model is quite clear in
saying that he’s going to win.
Carly Schulaka is editor of the Journal. Contact her HERE.
LEARN MORE
The Future of Blockchain Join William Michael Cunningham at the FPA Annual
Conference in Chicago, Oct. 3–5, 2018, where he will participate in a panel
discussion on the future of blockchain. Learn how this emerging technology will
influence the financial planning profession. Visit FPAAnnual.org for event,
schedule, and registration details. Learn More 7535 E.