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Entrepreneur, May, 2000 by Cynthia E. Griffin

Is it time to change the way we define minority entrepreneur?

In some respects, "tween" is the best way to describe C. Michael Gooden's company. Integrated Systems Inc. has outgrown the SBA's definition of small, but it's definitely not a Fortune 1000 corporation. But if a controversial initiative approved by the National Minority Supplier Development Council works as planned, Gooden and a select group of minority entrepreneurs could break into the Fortune ranks.

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The initiative creates a category of "minority-controlled" companies, and allows this new class of entrepreneurs to seek equity from institutional investors without losing minority designation. To do so, the owner must retain at least 30 percent of the firm's economic equity; control day-to-day operations; keep no less than 51 percent of voting equity; and operationally control the company's board of directors.

"Discrimination doesn't stop when you get larger," says Weldon H. Latham, a lawyer with the Shaw Pittman firm in Washington, DC, who specializes in diversity issues, "why should the programs that allow [minority entrepreneurs] to participate in the mainstream of American business?"

Gooden knows the frustration of trying to grow a company using only debt financing. "You take action," he says, "then have to sit back and work off the debt."

And Gooden warns, "We're racing against the clock. The more [corporate] consolidation we see, the more we lose the opportunity to participate in the market."

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Tell Webster

Entrepreneur, May, 2000 by Cynthia E. Griffin

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