Only 1% of venture-funded startup founders are Black. Not only do startups have a problem funding Black founders, venture capital itself has it’s own problems with race with 80% of VC firms don’t have a single Black investor. (Washington Post, Tech Crunch) With limited access to capital, it’s no surprise that the average Black entrepreneur starts a business with $35,000 — one-third of the capital than White entrepreneurs. (Black and White: Access to Capital Among Minority-Owned Startups 2016)
Here’s a list of 10 funding sources for Black Startup Founders:
I first met Melissa via Georgetown University where partnered with the Ford Fund to host HerImpact. (Technically 2019) I volunteered as a mentor and was completely blown away by the presentations, sessions, and the energy of the community.
Melissa is the founder of the 1863 Ventures fund through which she has supported 525 high growth businesses in the DMV. Her focus area is all historically marginalized communities, Native Americans, women, and others.
Founded by Shelly Bell, another DMV local, Black Girl Ventures has raised over $500,000 to provide capital to female founders of color. BGV uses a blend of crowdfunding and in-kind sponsorships from companies like Google Cloud, Penji, and Hubspot for their pitch competitions. They also have an online community to help generate resources for founders here.
VFN is a huge network of venture capitalists that fund companies at various stages and different sectors. This is an online portal that you can use to connect to them once you are ready to pitch for an investment.
Founded by Arlan Hamilton, Backstage Capital is one of the original funds that first focused on female founders of color. The fund has invested over $7M in more than 130 companies led by underrepresented founders.
If your startup idea focuses on personal care, food & beverage, retail, publishers, tech-enabled marketplaces, or e-Commerce, Color invests Seed to Series A in early-stage founders that are female, people of color, or underestimated.
This fund invests Pre-Seed, Seed, or Series A in female founders of color whose startups have a minimum of $100k in revenue. They typically first checks of $150k to $500k. They have a preference to have multiple investment partners.
While not focused exclusively on founders of color, Serena William’s venture fund invests in startups that embrace diverse leadership with over 60% of their investments going to companies that have diverse founders.
8. Harlem Capital (New York, NY)
Harlem Capital just sort of blew up on the VC fund and raised one of the largest inaugural funds to invest in founders of color — over $40 million. (Black Enterprise 2019)Their goal is to invest those funds in over 1,000 diverse founders over a 20 year period. They invest between $500k to $1M in early stage (Seed and Series A) startups. Thus far, they’ve made 26 investments. (They also have a TV show on Vice called Hustle).
9. Lightship Capital (Cincinnati, OH)
Unlike other funds based on the coasts, Lightship Capital is based in the midwest and invests in people of color, women, members of LGBTQIAP, and people with disabilities. The invest in early stage companies that work in the following industries: consumer packaged goods, eCommerce, sustainability, Artificial Intelligence, and healthcare.
Silicon Valley has struggled to have equal representation of tech workers with strong disparities based on race. Black workers comprise only 3% of technical workers at the 8 largest U.S. tech companies. (Industry Week 2018) One possible solution is connecting investment with HBCUs which account for 80% of black judges, 50% of black lawyers / doctors, and 25% of Black undergrads who earn a STEM degree. (The Atlantic 2019)
This is the exact gap that HBCUvc seeks to fill. HBCUvc is a student-run incubator that provides founders with mentorship, pitch coaching, micro-grants, and introductions to the HBCUvc investor network.
This list isn’t designed to be comprehensive but a starting point to make it easier to find resources for Black startup founders. If there’s a fund or organization that you feel should be added to the list, feel free to add them below.
“Freedom from Fear: Achieving Racial and Economic Equality in America”
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