Debunking the Myths Why Venture Investors Don’t Fund Diverse Startups •

Humans never can land on a word to explain what happens to women and minorities within the company. Are such founders overlooked or underestimated? Underrated and underrepresented? marginalized? Discriminated? Or just ignored?

The excuses used to justify these sobriquets are equally scattered. Women only received 1.9% of all venture capital funds last year because they only build beauty and wellness companies; there is a lack of a proven track record; it’s too early, they’re too risky and there’s a pipeline problem. Maybe she’ll get married, have a family, and leave the business behind.

And black founders raised 1% of venture capital funds because there weren’t enough pitching; they are a minority of the population and thus deserve a minority of the funds; their products and markets draw from something only their community has anything to do with; there is not enough traction, they are not qualified; or, like a Twitter user wrote, they are not “masculine, pale, and from Yale.”

Ah yes, this explains it all. Women are too emotional to run businesses. A female founder told she heard an investor say he wouldn’t invest in a woman-founded company because “she was annoying.”

Men, on the other hand, are not annoying. They are skilled and qualified, and, as we all know, sexism and racial discrimination went poof after the civil rights movements and the third wave of feminism. Since then, decisions about people of color and women have been based purely on quantitative and demonstrable facts. Clearly.

“You can’t say you support women in technology without supporting mothers.” Suelin Chen, Founder

In fact, fact-based investor due diligence often ignores women-founded companies have a higher yield than founded by men. The rest of the data on bias in the venture industry is so vague it’s hard to get much out of it. Without transparency, it is difficult to determine exactly how many people of color and women are pitching, making it difficult to assess how disproportionate funding for these groups really is. However, there is a way to pick apart some common misconceptions.

First women (especially black women) are more likely to start a business than men (and keep opening companies increasingly), which means that the idea that there are not enough women to invest in is simply not true.

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