Minority-owned businesses have been the hardest hit in the COVID-19 pandemic. The founder of a new stock exchange is hoping to help fix that.
“The design of the Dream Exchange — from the beginning — is to reach the underserved communities,” said Joe Cecala, founder and CEO of the Dream Exchange.
The Dream Exchange is set to launch in 2021. A Black-owned private equity firm will be the majority owner — making it the first ever Black-owned stock exchange in the country.
“What we’re trying to do is educate the minority market as a whole,” said Bill Ellison, chairman of Cadiz Capital Holdings, the majority owner.
It’s still subject to approval by the SEC, but Cecala says tens of thousands of Black-owned businesses have reached out during a difficult time. Some 41% of those who lost their business from February to April of this year were black, compared to 17% of White business owners.
That’s partly due to banking discrimination, with Black business owners having a harder time getting loans than their White counterparts. One of the goals of the Dream Exchange is to connect businesses with investors who could provide the money they need.
But the unique economic restraints from COVID-19 could still get in the way.
“Their clientele either doesn’t have the money to come and support them or by legislation can’t come out and support them, depending on where we go with lockdowns,” said Mark Abssy, head of indexing at Tematica Research.
Despite pending approval and the current economic challenges, the Dream Exchange will create much-needed diversity in the market, Cecala said.
“This is something I believe is a long-term solution to a long-term problem,” Cecala said.