Black founders raised 1.3% of last year’s $330 billion in US venture investments, totaling just over $4.3 billion. So far, Black founders have invested a smaller 1.2% of the $125 billion this year.
The past few For months, private market investors have slackened their pace of investment as a potential recession looms, but that 1% figure has barely changed, meaning rain or shine economically, it’s always a challenging time to be a black founder.
This frustration is exacerbated because two years ago “the powers that be” promised change after the murder of George Floyd. The “racial reckoning” – as some called it – saw many voices pledge to help build a more socially and economically just startup market that this time also included minorities. Tiny and even backward progress in creating a fairer business market negates the importance of change, especially since significant economic progress is needed to help the black community close the wealth gap.
To repeat what has been said over and over: you cannot outperform, outperform or tactically maneuver around a system that is intrinsically discriminatory. There could (and have been) a million articles written about a lack of fair fundraising results, fraught funding journeys for minority founders, and the need for more diverse LPs, more empathy, more opportunity, more this, more that, just Lake† Lake† Lake – and yet that 1% figure remains essentially the same. It is a more important social problem masked by the constant reassurance that the venture market is about to change. And yet black founders are raising an even smaller share of venture dollars this year than last year.
Change takes time if there’s a mindset to change and hearts to turn, although the venture finance gap problem isn’t as challenging to solve as some make it out to be – there are billions of dollars to invest, so all it takes is , is to get more of that capital to work in the businesses of minority founders.
With two quarters to go into the year, here are some predictions for what the black founding community should expect — and what they want to do next.