Black entrepreneurs have always been struggling to raise capital for their startup. Arielle Pardes from WIRED adressed this issue in a recent report by calling out VC Black Valleypardeswired firms to be equal towards black people as well.
The debate is just that the tech industry doesn’t favor black startups; their capital raising statistics reflect that. There is no doubt that the tech industry has been predominantly white for many years.
As the tech market started growing, the black entreprenuers, unfortunaltely, didn’t taste much success as compared to the white one when it came to raising capital.
Arielle Pardes, herself a black entrepreneur, adressed this issue in a recent article she published on WIRED, where she talked about how the white were favoured by VCs and the black-led startups were left behind.
Black Founders – A Startup to Help Fund Black Startups
In 2011, Black Founders was launched by Monique Woodard, founding partner at Cake Ventures, to help raise awareness of discrimination towards black techpreneurs. According to Woodard, black-led companies were getting non-financial support by the experts and the big fish but when it came to money, everyone was reluctant towards investing in their ideas.
When Woodard was working in Silicon Valley VC Black Valleypardeswired, she noticed that the industry was still inclined towards the white. According to her, not many VC firms were investing in black-led tech startups which was a huge concern for diversity.
“We are still not equitably connecting to founders and writing checks into companies led by black entrepreneurs,” stated Monique Woodard.
In the past decade, 77% of venture-backed founders were white and only 1% were black, with black women being even less represented at less than 0.2%. The disparity in funding is attributed to the lack of diversity in the venture capital industry, where only 4% of employees are black, according to a 2018 survey.
This lack of diversity leads to systemic issues that keep black entrepreneurs out, making it difficult for them to access capital, networks, and angel investors.
Fortunately, The Problem is Solving
As more and more people are now becoming aware of the issue, especially the decorated VC Black Valleypardeswired, the racial discrimination is now somewhat reducing. For instance, recent events like protests against racism and violence, and the impact of the COVID-19 pandemic, have brought attention to the importance of diversity and inclusion in tech.
The steps taken by VC firms have now put “underserved” founders in a better place. Recent reports show that the gap in funding is now being bridged thanks to several campaigns and recent protests against racism.
Adreessen Horowitz’s (a16z) recent contributions and investments are a proof of that. In 2020, a16z launched the Talent x Opportunity Fund whose focus would be to serve “underserved” founders. Similarly, $100 million worth of Opportunity Growth Fund was launched by SoftBank that would focus on serving solely black founders.
Some recent initiative taken by angel firms to support black-led tech startups are as follows:
- Andreessen Horowitz: Talent x Opportunity Fund to support “underserved” founders
- SoftBank: Opportunity Growth Fund, focused on founders of color with $100 million investment
- Backstage Capital: founded by Arlan Hamilton to provide funding and support to black entrepreneurs
- BLCK VC: a virtual event organized by an investor network to support and help connect black-led startups with funding.
Are Black Entrepreneurs Being Treated Equally All of a Sudden?
Diversity in the tech world is still a big problem, especially for black entrepreneurs who are trying to get money for their startups. Even though some people say they want to make things better, not much has changed. There are big reasons for this, like a history of unfair treatment, not having enough support from family or friends, and having trouble meeting people who can give them money.
“Black entrepreneurs don’t need a separate water fountain…You have to fix the systemic issues in your fund that keep black founders out and keep you from delivering better returns,” said Woodard on a virtual event hosted by the investor network BLCK VC.
But, there is hope! Some groups are trying to help by giving money at the beginning and offering guidance. This is a good start, but it’s not the same as real investments. Black entrepreneurs and investors want real change, like having more black people hired and supported.
It’s time for everyone in the tech world to step up and do something real to make a difference. By working together, we can make sure that everyone has the chance to succeed and make a positive impact.
North America Gitcimpanuzdnet, Cimpanu on Zdnet Reports Nissan (North America) Source Code Leaked