The startup ecosystem is changing for African American women thanks, in part, to digitalundivided and its latest research ProjectDiane 2018. The groundbreaking study is one of the very few research projects in collaboration with JPMorgan Chase and others (the Case Foundation and the Ewing Marion Kauffman Foundation), to quantify the entrepreneurial experience of Black women founders in the U.S.
The inaugural ProjectDiane report, published in 2016, found that only 0.2 percent of black female-led startups raised VC funding and of those that did, the average amount was $36,000. It may seem like a decent amount of money but compared to the $1.3 million raised by the average startup, the figure is dire.
Still, slowly but surely, the tide is beginning to turn. This week’s updated findings found that black women-led startups have more than doubled since 2016. There are 2.5 times as many startups in the ProjectDiane 2018 database compared to 2016. Significantly, since 2016, the amount raised by Black women founders has increased fivefold. That was $50 million in 2016 to $250 million in 2017.
But, there are still challenges. The growth seems substantial, but compared to the entirety of startup funding; Black female founders are still lagging behind. The median funding raised by these startups is $0 in 2018. While there is a growing number of Black women crossing the $1MM venture threshold, a majority of Black women-led startups do not raise any money. Even though investments in Black women-led startups have increased $6,000 since 2016 to $42,000, on average, that is only a fragment of the $2.1 million that is awarded to male startups. Of all venture technology funding, black women only receive .0006% of the money available.
digitalundivided founder Kathryn Finney in an interview with UrbanGeekz at BIG DEMO Day 2017
With such a nuanced issue, ProjectDiane illustrates how raising awareness about the problem can produce tangible outcomes. Janis Bowdler, the President of the JPMorgan Chase Foundation, says, “Women of color are the fastest growing segment of entrepreneurs. While some progress has been made, ProjectDiane underscores the economic opportunity left on the table when good ideas and small businesses led by women of color do not get the resources they deserve.”
Digitalundivided’s goal is for Black and Latinx women to own their economic security through entrepreneurship and technology. Jean Case, CEO of the Case Foundation says, “digitalundivided is breaking down barriers to economic growth and lifting up new innovators who are driving ingenuity and building more inclusive entrepreneurial ecosystems that are critical to our nation’s economic future.” Not only are these broken barriers positively impacting communities of color, they have the potential to impact the country.
“Expanding access to capital for women and entrepreneurs of color nationwide – segments that have traditionally been overlooked – is good for entrepreneurs and for the overall U.S. economy,” adds Case. With reports like ProjectDiane and companies like digiditalundivided, women of color are that much closer to reaching digitalundivided’s goal.
Main Photo Kathryn Finney – digitalundivided (left) with Christina Valdez – Bloc at BIG Demo Day 2017 (Photo Credit: chuckyfoto)