Posted in Conferences & Conventions, Education, Entrepreneur, Innovation, journalism

Part 1 – Addressing The Blockage In The Media Entrepreneurship Deal Flow

By Michelle Ferrier, Ph.D.

In search of the larger picture of media entrepreneurship, I recently traveled from North Carolina to Washington, D.C., and environs to meet with incubator directors, serial entrepreneurs, and others in the digital intelligencia. My goal, I thought, was simple. Engage in conversations about the new media landscape and how to fund great ideas.

Admittedly, I went with my own preconceived notions on what I’ve dubbed the East Coast Listening Tour. I was thinking of creating an accelerator to help educate and fund journalism-based projects coming out of the Journalism That Matters Create or Die series of design | build | pitch events in Detroit and Greensboro.

But something shifted on that road trip. Perhaps, like in the movies, my character learns something about herself as she traveled down the highways. As I met with folks like Doug Mitchell, co-director of UNITY’s New U incubator and William Crowder, managing director of the Comcast DreamIt Ventures project and Dr. Chad Womack, cofounder of the Black Innovation and Competitiveness Initiative, I stopped thinking and talking. I put on my journalism hat. And I started asking questions and listening.

What is needed in the media entrepreneurship space for projects by and for people of color? What do project teams need in terms of education, training or funding? When do they need such interventions? Who is already servicing these people with the skills and knowledge to be successful? What is the audience that is not being served effectively?

Many on the National Association of Black Journalists’ Digital Journalism Task Force have talked about the lack of financing for journalism projects by or for people of color. New U was designed to help address that gap. DreamIt Ventures was designed to fill that need. But as I chatted with people just as passionate about media entrepreneurship, the larger media ecosystem became a bit clearer. And the gaping holes became increasingly apparent.

With more than 200 applicants for 16 slots in the 2010 class, New U has a very selective process for picking its final teams for mentoring. Four of the 16 go on to actual funding. Same scenario with DreamIt Ventures. Many more entrepreneurs are waiting for their shot than the number of slots available to accommodate them.

Venture capitalists talk about deal flow…the number of ideas it takes for the big one to be found. To me, it doesn’t seem as if we have any problem with deal flow with the hundreds of entrepreneurs of color waiting for a chance to be heard. What I see is a tremendous narrowing of the arteries leading to the heart of the matter – funding. And lots of ideas never see the light of day for lack of access to that flow.

Tomorrow, Part 2: 5 Concrete Steps to Moving the Needle on Media Entrepreneurship

Dr. Michelle Ferrier is founder and publisher of LocallyGrownNews.com, a hyperlocal community news site now in its second year. She is also an associate professor in the School of Communications at Elon University.

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Home of the National Association of Black Journalists's (NABJ's) Digital Journalism Task Force

One thought on “Part 1 – Addressing The Blockage In The Media Entrepreneurship Deal Flow

  1. Dr. Ferrier, your research is an informative journey that deserves a large-scale media spotlight. Unfortunately, the vast majority of journalists of color have self-selected to remain focused solely on our side of the proverbial wall that separates the business side of media from the content-driven side.

    When a sour economy forces us to look around the landscape of media to see how we, too, can engage in entrepreneurial efforts, which have created jobs in media and wealth for those who own such enterprises, only then we see how virtually homogeneous the vast landscape of media truly is.

    And when we delve into the details of what it takes to start an entrepreneurial venture, media-focused or otherwise, we realize how much we have to learn … and how little participation we have in the processes required to fully participate as “equity” citizens in this nation. As shareholders invested in the future of America, we, too, should understand the processes of job creation and wealth generation. We, too, should seek to not only pursue job skills and career development, but also understand the processes that produce those jobs for which we seek to qualify, regardless of whether we believe entrepreneurship is a passion we seek to pursue. We, too, should engage in the processes that produce larger benefits for those who recognize the value of investing in our future beyond being the hard-working worker bees.

    While we look around and notice a lack of colorful faces in media ownership, we should not ignore the dearth of color within the realm of private risk capital, where angels of color, moreso than venture capitalists, are essential cogs missing in the machinery that provides funding for seed stage startups.

    Your research will show us that we’ve yet to fully engage in the startup race, the pace of which has accelerated with technology and the pace of innovation. Your research will show us that we are in the startup phase of learning about a whole new world of opportunity.

    We will essentially need to bootstrap our way forward, digging into our own pockets to fund our ventures. We will need to find others with whom to collaborate and recruit teammates to push forward in the entrepreneurial realm. And when we’ve gone as far as our pockets will allow, we will need seed stage investment that routinely comes from angels, not VCs. And that’s when we will arrive at the desert frontier virtually devoid of people of color who invest in startup teams of fresh-faced energetic entrepreneurs.

    Angel investors are essential funders who help entrepreneurs in the stages of developing a business model, accessing target markets and proving the revenue model that sustains a business and helps it compete in a market and grow. Venture capitalists enter the next stage after a company has a proven business model and is poised, ready to ramp or scale exponentially.

    This relatively new frontier of investing is one where we have a lot to learn. As little as we know about the stock market, we know less about investing in startup companies. But the startup and scale frontiers are the landscapes that claim responsibility for virtually all net new job growth in the U.S. since 1980. These are the the places where a mere 1% of the top performing companies (five years old and less) are responsible for 40% of all job growth in the nation … every year.

    I’m not advocating that we all start up companies, nor that we all jump into the arena of angel investing. We are not all entrepreneurs nor are we all capable of putting our investments into high-risk startups.

    I’m saying that if we want to increase ownership in media and other industries for people of color, if we want to compete for market share, if we want to contribute to the job growth in our communities and our demographic sectors, if we want to generate wealth on an exponential scale (horizontally as well as vertically), then some of us need to decide to be the risk-takers … both on the entrepreneur side and the investment side.

    Otherwise this paradigm that your research is revealing will remain the reality … where people of color continue to wonder where the jobs are, and why when America catches an economic cold, we nearly die of pneumonia.

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