The MBE Market
The changing demographics in America create an opportunity for the creation and cultivation of minority controlled business enterprises (MBEs), particularly those that can be significant suppliers to larger corporations.


Demand:

Many major U.S. corporations have a desire to expand the business that they do with sophisticated MBE suppliers


Supply:

Very few exist (especially in manufacturing businesses)
90+% of suppliers to the Fortune 500 have revenues of $100 million
Approximately 90% of MBE companies have revenues of less than $1 million

Reasons for Imbalance:

Access to capital, especially for asset intensive businesses
Lack of investing equity within minority community
Dilution of minority ownership from outside equity
Lack of experienced minority executives in these industries

Red Clay Role

Acquiring businesses that have the scale, skills and capabilities necessary to supply large corporations. Red Clay will provide value added support, including recruiting management talent, engagement in business development activity, contract negotiation and/or managing financial institution relationships. Companies that Red Clay acquires, where appropriate, may be certified as MBEs.

Understanding the MBE Market

Red Clay's principals have been involved in the MBE market as bankers, investors, consultants and operators for more than 15 years. This experience has contributed to the following publications that provide additional insight into this market niche and support a portion of the investment thesis for Red Clay.

The Competitive Reality of Supplier Diversity - 2005

Equilibrium Paradox - 2003