How J.P. Morgan is responding to the call of underrepresented founders and consumers of color
- How are established banks addressing the divide for underrepresented founders to create a more equitable environment for entrepreneurs today?
- In a strategic move, JPM has announced plans to launch around 100 new branches in low-income communities. This decision stands in contrast to the broader pattern of banks pulling back their brick-and-mortar footprints.
Can innovation be equitable?
The financial services industry has historically been male-dominated, and the entrepreneurial and startup landscapes tell a similar story — not because there are fewer women founders, but because they face fewer opportunities than men.
This doesn’t diminish the talent and capability of women entrepreneurs, whose presence in the business world continues to rise. From 2019 to 2023, the number of women-owned businesses grew at almost twice the rate of those owned by men. As of 2024, women own 39.1% of all businesses—more than 14 million—employing 12.2 million individuals and generating $2.7 trillion in revenue. Despite this progress, significant challenges persist: men still hold a larger share of business ownership, and only 7% of unicorn founders are women, according to a recent J.P. Morgan study. These figures are even starker when it comes to minority founders.
Creating a level playing field isn’t just a matter of fairness; it can be a stepping stone for sparking innovation and unlocking economic growth. Ethnically or racially diverse founders can tap into new markets and address the unmet needs that drive sustainable progress. Closing the revenue gap for diverse entrepreneurs could bring in an additional $667 billion, while bridging the gap between women and men-owned businesses could generate an additional $7.9 trillion for the economy, according to a recent research by Wells Fargo.
So, what’s holding back this change?
We know that investor confidence tends to increase when a founder fits a particular mold — whether that means the founder’s gender, ethnicity, or simply having a white male co-founder on the team. But beyond these age-old biases, how are established banks working to narrow this divide and create a more equitable environment for all entrepreneurs in today’s day and age?
“It starts with the investment in a broad national startup banking business,” Ashraf Hebela, J.P. Morgan’s Head of Startup Banking told me in our recent Tearsheet Podcast episode.
“Most of the underrepresented minorities as entrepreneurs are sitting at the early stage, and that means having to invest in an early-stage business.”
Ashraf highlighted the tangible measures financial institutions could implement to tackle this gap and something JPM has been mindful of:
…
