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Minority Business Development Course

The Lawyer’s Role in Helping Close the Minority-White Gap in Business Ownership

Taught by Professor Samuel C. Thompson Jr., Arthur Weiss Distinguished Faculty Scholar, Penn State Law in University Park

Professor Samuel C. Thompson Jr.

In order to assist lawyers who are advising minority owned businesses, Professor Thompson is making his course, Minority Business Development, available online to the general public at no cost.

The online version of this course is being provided for personal enrichment and/or professional development purposes only. Individuals who access the online course, and who are not enrolled at Penn State Law in University Park, will not receive academic credit, participate in classroom discussions, submit assignments, or receive feedback from Professor Thompson.

This seminar is divided into three parts: Introduction and in-depth analysis of the minority-white gap in business ownership; the lawyer's essential tools in representing a minority-owned small business; and the big ideas for addressing the minority-white gap in business ownership. Professor Thompson is teaching the course concurrently to Penn State Law students in the spring 2021 semester. As the semester progresses, recordings of each lecture and supplemental course materials will be made available below.

Course Syllabus

Part I: Introduction and In-Depth Analysis of the Minority-White Gap in Business Ownership

Part one of the course, which has four sessions, will focus on understanding the current state of the differences between white and minority business ownership and the underlying reasons for such differences. The fourth session will feature special guest Carlos Berdejó, professor of law and J. Howard Zeimann Fellow at Loyola Law School, Los Angeles, who will join us for a discussion of his forthcoming article in the University of Wisconsin Law Review, “Financing Minority Entrepreneurship.”

Session 1: View class recording

Session 1 Assignment Sheet
Session 1 Combined Reading Materials
In-Class Slide Presentation

Individual Reading Materials:
CBO Report - Distribution of Household Income
U.S. Census Bureau Report - Income and Poverty in the United States
Brookings Report - Examining the Black-white Wealth Gap
U.S. Bureau of Labor Statistics (BLS) Report - Race, Economics, and Social Status
U.S. BLS Report - Labor Force Characteristics
Excerpt from Thompson, Biden vs. Trump, Ch. 20 - Inequality
Leo Strine, Working Paper - Toward Racial Equality
Thompson - Introduction to Issues Arising from Advising a Small Minority-Owned Business

Session 2: View class recording

Session 2 Assignment Sheet

Reading Materials:
Robert Fairlie - Why Are Black-Owned Businesses Less Successful than White-Owned Businesses?
Maxim Pinkovskiy - Discussion of Picketty's Capital in the Twenty-First Century, Part One
Maxim Pinkovskiy - Discussion of Picketty's Capital in the Twenty-First Century​, Part Two
Thompson - Additional Materials on Picketty's r > g Thesis
Thompson - Comment on Picketty's r > g Thesis
Lynnise Pantin - The Wealth Gap and the Racial Disparities in the Startup Ecosystem
Bhutta et. al. - Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances
McKinsey & Company Report - The Economic Impact of Closing the Racial Wealth Gap
Robert Fairlie et. al. - Black and White: Access to Capital Among Minority-Owned Startups

Student Presentations:
Why Black-Owned Businesses Are Less Successful & The Overall Wealth Gap’s Effect On The Economy
The Wealth Gap and Its Effect on the Racial Disparities in The Startup Ecosystem
McKinsey Report on the Economic Impact of Closing the Racial Wealth Gap
Racial Inequality and Access to Capital

Session 3: View class recording

Session 3 Assignment Sheet

Reading Materials:
Robert Fairlie - Financing Black-Owned Businesses
Robert Fairlie et. al. - 2017 National Report on Early-Stage Entrepreneurship
Amber Burton et. al. - The Battle to Keep America's Black Banks Alive
Federal Reserve Racial and Economic Equity Act
Kauffman Foundation - Access to Capital for Entrepreneurs: Removing Barriers
JP Morgan et. al. - Helping Entrepreneurs of Color Grow their Business
Kauffman Foundation - Trends in Venture Capital, Angel Investments, and Crowdfunding across the Fifty Largest U.S. Metropolitan Areas
McKinsey & Company - Building Supportive Ecosystems for Black-Owned U.S. Businesses
Andre Perry and Carl Romer - To Expand the Economy, Invest in Black Businesses
President Biden - Executive Order on Racial Equity, January 26, 2021
Citi GPS - Closing the Racial Inequality Gaps

Student Presentations:
Building Black Businesses
Access to Capital
Helping Entrepreneurs of Color Grow their Businesses
Early-Stage Entrepreneurship and the Role of Black Banks

Session 4: View class recording
Featuring guest speaker Carlos Berdejó, professor of law and J. Howard Zeimann Fellow at Loyola Law School, Los Angeles

Session 4 Assignment Sheet
In-Class Slide Presentation

Reading Materials:
Samuel Thompson - Background Information on Congress' Paycheck Protection Program (PPP) Response to the COVID-19 Crisis
Robert Fairlie - The Impact of COVID-19 on Small Business Owners: The First Three Months After Social-Distancing Restrictions
Overview of PPP First Draw Loans
Overview of PPP Second Draw Loans
U.S. Small Business Administration - PPP: Guidance on Accessing Capital for Minority, Underserved, Veteran, and Women-Owned Business Concerns
Robert Fairlie and Frank Fossen - Did the $660 Billion Paycheck Protection Program and $220 Billion Economic Injury Disaster Loan Program Get Distributed to Minority Communities in the Early Stages of COVID-19?
Emily Flitter - Black Business Owners had a Harder Time Getting Federal Aid, a Study Finds
David Wallace-Wells - The Scholar of Inequality Warned Us that Our Economic Systems Couldn't Withstand a Global Catastrophe
NCRC - Lending Discrimination Within the Paycheck Protection Program
Allison Arteaga Soergel - Rob Fairlie Testifies Before Congress on Inequality in Pandemic Economic Impacts
Robert Fairlie - Testimony to U.S. House of Representatives
Karen Kerrigan - Testimony to U.S. House of Representatives
Stephen R. Schoaps - Testimony to U.S. House of Representatives
Sharon R. Pinder - Testimony to U.S. House of Representatives
Carlos Berdejó - Financing Minority Entrepreneurship

Student Presentations:
Financing Minority Entrepreneurship, Part 1
Financing Minority Entrepreneurship, Part 2
Financing Minority Entrepreneurship, Part 3


Part II: The Lawyer’s Essential Tools in Representing a Minority-Owned Small Business

Part two of the course will focus on some of the basic tools a lawyer needs when advising on the formation and operation of a small business, including a practical introduction to the following concepts: (1) the organization and operation of the basic forms of business (i.e., corporation, partnership, and limited liability company (LLC)), (2) the federal income tax considerations in the choice of business entity (i.e., C corporation, S corporation, partnership, or LLC), (3) the private placement exception to the registration requirement of the Federal securities laws , (4) an introduction to basic accounting principles for the business lawyer, (5) negotiating Small Business Administration assistance for a minority-owned business, and (6) the drafting of an agreement for the acquisition of a small business. In looking at each of these topics, consideration will be given to any issue that is unique to minority businesses. The principal source for this part of the course is the law school casebook, Business Planning: Financing the Start-Up Business and Venture Capital Financing, Third Edition, by Therese H. Maynard, Dana M. Warren, and Shannon Treviño.

Session 5: View class recording

Session 5 Assignment Sheet
Presentation: Business Planning 101

Session 6: View class recording

Session 6 Assignment Sheet
Presentation: Limited Liability Company Law
Presentation: The Incorporation Process

Session 7: View class recording

Session 7 Assignment Sheet
Presentation: Federal Securities Law

Session 8: View class recording

Session 8 Assignment Sheet
Presentation: Introduction to Issues Arising From Advising a Small Minority-Owned Business: Tax Considerations

Session 9: View class recording

Session 9 Assignment Sheet
Presentation: Equity-Based Compensation
Presentation: Intellectual Property Primer

Session 10: View class recording

Session 10 Assignment Sheet
Presentation: Capital Raising and Overview of Venture Capital

Session 11: View class recording

Session 11 Assignment Sheet
Select National Venture Capital Association Model Legal Documents
Presentation: Venture Capital Financing

Session 12: View class recording

Session 12 Assignment Sheet
Presentation: Small Business Administration (SBA)


Part III: The Big Ideas for Addressing the Minority-White Gap in Business Ownership

Part three of the course, which consists of the final two sessions, will focus on (1) a critique of various existing private and public proposals, and (2) the development of new public and private proposals, for addressing the problem. The first of these sessions will be a roundtable discussion by leading thinkers on this topic who have produced important scholarship on the need for lawyers to help close the white-minority economic gap. Guest speakers include Leo Strine, former chief justice of the Delaware Supreme Court; and Beverly Moran, a retired law professor who taught most recently at Vanderbilt Law School.

The final session will include student presentations and Professor Thompson’s ideas for updating a paper he wrote as a law student at the University of Pennsylvania Law School. The paper, “Black Business Ownership: An Analysis and a Proposal,” was published in the November 1971 issue of Black Business Digest. Robert Mundheim, of counsel at Shearman & Sterling, professor of corporate law and finance at the University of Arizona James E. Rogers College of Law, and former dean at the University of Pennsylvania Law School, will be a special guest at this session. Mundheim is also Thompson's former professor, teaching him a course on minority business ownership at Penn Law in 1971.

Session 13: View class recording

Class session 13 is a special event featuring 24 guest speakers in a range of fields, including lawyers, economists, bankers, business school deans, venture capitalists, private equity investors, tax policy experts, and entrepreneurs. For more information on this event, including supplemental materials and guest speaker bios, visit

Session 14: View class recording

Presentation by Alexis Castillo: The Unequal Access to Capital: Financing Issues Minority Business Owners Face
Presentation by Nicole DuGan: Race-Neutral or Face-Fair?
Presentation by Brea Jones: Why White Owned Businesses Are More Successful, Steps to Enhance Black Owned Business, and the Impact on the Economy
Presentation by Sidnee McDonald: An Analysis of How Intellectual Property Law Contributes to the Wealth Gap Between White and Minority Businesses
Presentation by Skyler Morgan: Equity Based Funding for Minority Owned Businesses
Presentation by Britani Peterson: Proposal for a Minority Business Accelerator at Penn State
Presentation by Professor Thompson: Black Business Ownership: An Analysis and a Proposal: 1971 and 2021