Black business revival is happening in LA
Lawyer Almuhtada Smith helps local black founders take their business to the next level.
By Megan Reed
Los Angeles is experiencing a black business renaissance as many black entrepreneurs are riding the tech wave. According to the Kauffman Foundation, there were more black-owned businesses last year as a proportion of total population than at any time in the past quarter century. However, only 1.2% of venture capital (VC) raised in the first half of 2021 went to black founders.
“Venture capital is the highest level of funding for high-growth startups,” said Almuhtada Smith, senior attorney at law firm ARS IP, PC “Like Facebook, LinkedIn, Tic Tok, Uber and Lyft; all have venture capital invested in the business which has helped them grow rapidly. The VCs are looking for what they call unicorns. They look for companies that will be valued at a billion dollars or more in the future.
Smith’s company is rooted in its mission to provide strategic advice to entrepreneurs and creatives of color, and has worked directly with many of the city’s most innovative black businesses and artists. Through Smith’s work in intellectual property, licensing, corporate, real estate, and entertainment law, he has had first-hand insight into the unique challenges that Black entrepreneurs and creatives face. He also has the unique vantage point of observing the growth and boom of LA’s black renaissance creativity from his heart.
“I started ARS Counsel in 2018, primarily to center Black entrepreneurs and creatives who are starting businesses or even mid-market businesses if they are more mature businesses, to help them take them to the next level” , Smith said. “I work with many startups and we do corporate law, intellectual property and entertainment. From a corporate law perspective, we form corporations. We do all of the founders papers. We draft contracts for new start-ups. We help them when they raise funds from these venture capital funds. We prepare them to grow. We ensure that all initial documents are in order.
Los Angeles has become one of the nation’s tech hubs, with more than 500 tech companies, including startups, in Silicon Beach.
“Google, Microsoft, Yahoo, Facebook, SnapChat, Tinder and a bunch of big tech startups have offices here,” Smith said. “But they still suffer from a lack of diversity. What I’m talking about in terms of rebirth for black people and people of color starts with people like Nipsey Hussle, who realized that innovative ideas aren’t just housed and nurtured in these big tech companies, but also in his community of south of Los Angeles. why he opened the Marathon Store there and Vector 90. So it was very intentional to nurture that talent in South Los Angeles. And people like Issa Rae have also shed light on this talent through his show Insecure and through investments in LA-based startups.
Los Angeles is called the entertainment capital of the world, with many celebrities living in this city. Many black celebrities are investing in local startups in black communities.
“LA has this entertainment culture, but these people have ventured into tech investing,” Smith said. “People like Nas, Jay-Z, Will Smith, Serena Williams have invested in many startups based in Los Angeles and South Los Angeles. And not just on the founders’ side, there are other investment funds that intentionally do this work. People like Slauson & Co., who we also work with. Slauson & Co. raised a fund to specifically invest in founders of color. Many of them are based in Los Angeles. All of this is happening at the same time. This has made Los Angeles one of the top hubs for tech and startup investment. »
Smith’s services aren’t just for technology-based businesses, because technology is part of every small business.
“Everyone uses technology in some form or way,” he said. “Not every company is trying to become this billion dollar revenue company. Some people start businesses just to support their families in their community, and that’s important. There are models to help these people by raising smaller amounts of capital. It may not be through the VCs. It could be through angel investors who may not be looking to get as much out of their investments. Crowdfunding has been a good avenue for some of these small businesses. But in any case, it is always important for them to have their documents together and protect their intellectual property. We help small businesses with that.
For more information on the services of the ARS IP law firm, visit www.arscounsel.com.