By Girl Tyler
Securing funding is a familiar challenge for any startup founder who was not born with a silver spoon in their mouth. A rigorous process goes into developing a new idea, pitching it to investors, and convincing them that they're investing in a scalable company. Investments are risky on both ends. For Black women founders, securing a meeting with an investor is met with its own unique set of challenges. We'll spare you the 250-year history of why Black entrepreneurs often lack access to capital. Times are changing, though. More and more Black-led startups have found success with backing from venture capital investors in the last five to seven years.
Progress has been slowly trending upward for companies founded by Black women. According to ProjectDiane, a biennial demographic study tracking Black and Latinx women in entrepreneurial and innovation spaces, 93 Black women raised more than $1 million in venture capital in 2020, almost triple the number of Black women who accomplished this in 2018; and yet, this is still a fraction of what founders from other groups receive. Crunchbase reported that by July 2021, Black women startup founders had only received 0.34% of total VC dollars spent in the U.S. The good news is a shift is taking place. Crunchbase data shows venture funding for Black women-led U.S. startups are on target to surpass figures from the last five years. In the first half of 2021, startups with at least one Black woman founder raised an estimated $494 million, higher than the 2018 five-year-high of $484 million.
So, who are these venture capitalists who are acting as gatekeepers? White guys. According to MIT Technology Review, 65% of VC firms do not have women partners, and 81% have no Black investors. Women make up half of the VC workforce, according to a 2020 report by Deloitte, and only 9% of Black women occupied an investment partner or equivalent role. The percentage was even smaller, with fewer than ten people, in 2016.
The industry is mostly white and male…for now. BLCK VC, co-founded by Sydney Sykes, aims to change this. The non-profit has set out to create equity within the industry by fostering communities of Black investors and providing educational resources. BLCK VC seeks to double the percentage of Black investors and partners in the industry by 2024. As the industry progresses, more and more Black women-led funds are popping up. Here are five women who have set out to create inclusive investments:
1. Arian Simone
President and CEO, Fearless Fund: The company backs businesses led by women of color seeking pre-seed, seed level, or Series A funding.
2. Arlan Hamilton
Founder and Managing Partner, Backstage Capital: A venture fund exclusively investing in women, Black/POC, and LGBTQ founders.
3. Tracy Gray
Founder & Managing Partner, The 22 Fund: A VC fund that invests in tech-based manufacturing companies.
4. Gayle Jennings-O'Byrne
General Partner and Co-founder, WOCstar Fund: A tech-focused early-stage investment fund led by women of color and inclusive teams.
5. Sarah Kunst
Founder Managing Director, Cleo Capital: An early-stage VC fund.