- 20298 NW 38th Place Miami FL 33055
- Grant.mcgaugh@5starbdm.com
- 305 562 1825
December 15, 2025
How Minority-Owned Businesses Can Counter Funding Barriers
Minority-owned businesses generate nearly $2 trillion annually in the U.S. economy. Yet time and again, I see founders with strong products, real traction, and clear demand struggle to access capital. Venture investment in these businesses remains under 2%, and traditional lending continues to favor legacy relationships over future potential.
This is not a coincidence. It’s a structural failure in how we define risk, credibility, and readiness.
Grant McGaugh is not just a branding expert — he’s a transformation architect. As the CEO of 5 STAR BDM and Senior Managing Director at Cornhusker Capital, Grant helps entrepreneurs and executives develop investor-ready personal brands. He’s also the host of the popular Follow the Brand podcast, where he interviews influential leaders driving impact at the intersection of purpose and visibility.
What I See Behind the Numbers
Through my work with entrepreneurs and institutions, I’ve learned that funding barriers are rarely about a lack of talent or discipline. They’re about how the system was designed.
Traditional finance still relies heavily on relationship banking and familiar signals. Who you know. Where you went to school. Whether your business fits a narrow, standardized model. Many minority founders were never positioned inside these networks to begin with.
Because of this, Black and Hispanic entrepreneurs are far more likely to self-fund or rely on informal capital. Research confirms what I see in practice: higher denial rates, higher interest offers, and fewer second chances, even when credit risk is comparable.
The consequence is a compounding disadvantage. Without affordable capital, scaling is slow. Without scale, businesses are labeled “too risky.” The system reinforces its own conclusions.
The Cost of Ignoring Proven Potential
The economic impact of this gap is massive.
McKinsey estimates that closing the racial wealth gap could add $1.5 trillion to the U.S. economy by 2028. Minority-owned businesses don’t just create revenue. They reinvest locally, create jobs, and stabilize communities.
Yet in 2023, Black founders received less than 1% of venture capital while representing over 13% of the population. This persists despite strong evidence that diverse teams outperform homogeneous ones in innovation, revenue growth, and market expansion.
When people ask me why this gap still exists, my answer is simple. We are not underfunding risk. We are underfunding opportunity.
Why I Tell Founders to Treat Brand as Capital
One of the most effective ways I’ve seen founders break through financial gatekeeping is by building visibility before asking for money.
Thought leadership, podcast appearances, and a credible digital presence function as modern trust signals. They show market relevance, expertise, and demand long before an investor reviews financials.
I’ve worked with founders who could not secure traditional loans but attracted angel investment within months after consistently showing up as credible voices in their industries. Their brand became proof of value. Their audience became social proof.
In today’s relationship-driven funding environment, visibility creates legitimacy. When people understand who you are and why you matter, capital becomes a conversation rather than a barrier.
The Real Opportunity Ahead
Closing the funding gap is not about charity or compliance. It’s about unlocking economic value that already exists.
Founders must begin treating brand building as a core capital strategy. Financial institutions must evolve beyond outdated definitions of risk. Policymakers must reward transparency and inclusive capital deployment.
When capital flows more equitably, innovation accelerates, communities strengthen, and the economy becomes more competitive.
I don’t see this as an idealistic goal. I see it as inevitable. The only question is who adapts fast enough to lead the shift.
I didn’t get here alone—this win belongs to my clients, partners, and supporters. Let’s keep pushing forward together.
📩 Want to collaborate? Reach out at grant.mcgaugh@5starbdm.com
🎧 Listen to the Podcast: Follow The Brand
🔗 Connect on LinkedIn: linkedin.com/in/grantmcgaugh
#MiamiLeaders #BlackExcellence #BusinessGrowth #PersonalBranding #5STARBDM
Thank you for being part of this journey. The best is yet to come.
– Grant McGaugh
CEO, 5 STAR BDM | Speaker | Investor | Podcast Host