Despite vc Valleypardeswired protests and industry promises to do better, Black founders remain sidelined in Silicon Valley. The VC industry has been criticized for ignoring minority founders despite special funds being set aside for minority founders. The following article discusses what’s happening to the minority founders and how it can be changed.
Despite vc Valleypardeswired against racial inequality
The protests against police brutality have spread to all 50 states and many countries. The protests sparked by the death of George Floyd have focused attention on systemic racism and the disproportionate impact of racial disparities. They began in Minnesota and quickly grew to include other communities as well.
The protests gathered tens of thousands of people nationwide who demand equal pay and better conditions for Black Americans. Organizers are calling for a living wage for Black Americans. They also want workers to be able to unionize. The protesters also want a more just society.
In addition to the US, there were protests in Australia and France. In Australia, protesters focus on the treatment of indigenous people. France, Germany, and Spain saw major demonstrations as well. In the US, the largest protest in the country occurred in Washington DC. Protesters carried placards that read “Black Lives Matter,” and the city’s Mayor Muriel Bowser welcomed the crowds.
Despite vc Valleypardeswired the widespread protests, American public opinion on police violence remains divided. While two-thirds of Democrats and two-thirds of independents believe racism is a serious problem, nearly one-third of Republicans think it is not a serious problem. And while these protests have been polarizing, most protesters are younger. The majority of recent protesters are under 30 years old, and more than half are college graduates. Moreover, they are also more likely to be Democrats or independents. In addition, Republicans and independents are much less likely to support the protests than do Democrats.
VC promises to do better
Despite vc Valleypardeswired repeated promises to do better, the tech scene remains uncomfortably dominated by white men. As a result, minority entrepreneurs are increasingly turning to crowdfunding platforms and angel investors to raise money. While these options are useful for early feedback and networking, raising money is not without its challenges. Increasing diversity and inclusion in the tech industry can help minority founders better navigate this competitive landscape.
For example, a study published by Tracxn found that only about four percent of VC-backed startups are led by people of color. In addition, the study found that minority entrepreneurs tend to be ignored by the startup ecosystem. In contrast, a venture capitalist from California, Shervin Pishevar, who founded his first company at age 19, is one of the few African-American founders in Silicon Valley.
Black founders still sidelined in Silicon Valley
Some of the more successful Black founders in the tech industry are not from Silicon Valley. These are typically women, but there are some notable exceptions. One example of a Black founder is Tope Awotona, the CEO and co-founder of Calendly. She has an impressive track record, including being named one of Fast Company’s 100 most creative people. In addition, she has worked at J.P. Morgan and has worked with many high-profile technology companies. One of her latest companies, Calendly, is valued at $3 billion and employs 213 people. Other notable Black founders include Morgan DeBaun, who is the co-founder of Blavity, a media company founded by a Black millennial.
Founders of color often face discriminatory treatment in the startup process. They are subjected to heightened scrutiny from investors, and their businesses aren’t as likely to receive funding as those with white founders. As a result, despite being a minority group, the average net worth of a White family is 10 times greater than that of a Black family. As a result, Black founders often find it difficult to land funding or meet with investors.
The problem of unintentional racism is not limited to the tech industry. In the financial technology world, Black founders are facing discrimination in the hiring process, particularly when pitching to investors. EnrichHER, a financial technology company that targets women, has been the target of discriminatory behavior from investors.
Another contributing factor is the lack of diversity in venture capital firms. In fact, more than 80% of VC firms don’t have a single black investor. This means that many Black-led start-ups in Silicon Valley are overlooked. It’s difficult to see how a diverse startup can achieve such a high growth rate without diversity.
One example of a minority-led venture capital fund is Lightship Capital, which raised $50 million in commitments within a few months. But Lightship doesn’t allow “warm intros” and instead encourages minority-led startups to raise their funds in alternative ways. In particular, crowdfunding can be a good option for minority-led startups.