First, the good news: Female entrepreneurship is expanding. Female-owned businesses grew 58 percent from 2007 to 2018, according to the eighth annual State of Women-Owned Businesses Report. And businesses started by women of color grew by 163 percent in that same period.
Now the bad: Female entrepreneurs get less than 10 percent of all venture capital. And along with minority entrepreneurs, they face often insurmountable barriers. They’re less likely than white males to have a network that opens up access to start-up capital and mentorship. Those networks are largely homogenous—“and if you don’t know somebody who knows somebody who can get you a meeting, then you never get a shot,” says Carla Harris, the vice chairman of global wealth management and a senior client advisor at Morgan Stanley.
Harris has plans to change this. She’s heading Morgan Stanley’s in-house team working to transform the investment landscape for female and multicultural entrepreneurs, as well as small business owners. At the heart of those programs is Morgan Stanley’s Multicultural Innovation Lab, an intensive six-month incubator program that helps female and minority founders grow their tech-forward businesses. (Less than 10 percent of start-ups in the tech field are founded by women, according to 2017 Harvard research.) The Lab educates entrepreneurs, gives them tools for navigating the entrepreneurial field, and introduces them to investors—things that should be accessible to everyone, not just those of a certain gender or race.
Now in its second year, the Lab has nearly doubled the size of its class. And its entrepreneurs are impressive: One founded a financial-literacy platform to help educate young people. Another created a direct-to-consumer platform for at-home testing and treatment for sexually transmitted diseases. The supply of talent is huge, says Harris. (This is the really good news.) We asked Harris to tell us more about the Lab and clue us in to the vital things every entrepreneur needs to know.