Resources for Black tech founders have seen a small increase in funding in the past few years. However, the ecosystem for venture capital firms and entrepreneurial space is still dominated by 77.1% of White educated men based in Silicon Valley, according to Crunchbase. In 2021, Black founders raised $4.2 billion, a 281% increase year-over-year.
Allyson Kapin, founder of Washington, D.C.s’ Women Who Tech, said VCs are dominated by men who act as gatekeepers and decision makers. “A lot of the pressure is on women to fix this very deep-rooted problem, and that’s not going to work. We alone as women cannot fix this industry’s problem, where frankly the gatekeepers are dominated by men,” she said.
Shifts are happening as a result of conversations, but is it enough? Black investors and VCs are taking the steps needed to cultivate change by diversifying venture capital investments in an otherwise equivalent setting.
Alkeme Health’s CEO, Ryan Mundy, raised $4.6 million in seeding back in 2021 from the likes of Techstars, Y Combinator and more. That success gave him a leg up in advising others on the importance of networking, building relationships and creating a reputable quality for one’s self.
“As a founder, you should always be fundraising and always be networking,” he said. “You’re investing in an individual, 1000%. I used to hear that as an investor, and didn’t know what that meant until I actually started my own company and realized how much work it is to take an idea from your brain and bring it to life.”
He added, “You’re 1000% betting on the person and your confidence in them – it’s not just about the numbers.”
There are several successfully led VCs and capital resources led by Black entrepreneurs worth researching with great potential. This list serves as an investment for people who understand the politics beyond the red tape and most importantly, gaining a network capital familiar with laboring tasks.
Nonprofit organization BLCK VC helps Black founders and entrepreneurs connect by centralizing its focus on Breaking into Venture, Black Venture Institute and Scout Network. The company, established in 2018, seeks to provide diversity through venture capital investments.
Backstage Capital has a very forward movement and welcoming atmosphere for companies led by underestimated founders, including women, people of color, and LGBTQ+ founders. Their expertise covers highly scalable companies that can return on their investment 10x or more. They’ve invested over $7 million in over 120 companies ushered by underrepresented founders.
VC firm 1863 Ventures focuses on founders that rank higher in the growth spectrum. They help to minimize barriers and risk factors as it pertains to financial expansion while encouraging minority and disadvantaged groups. Perks include free tips for business practices, risk reduction and optimal functioning.
Harlem Capital has a diverse portfolio and team dedicated to investing in a mixed group of founders and have been doing so for over two decades addressing disparities. Since their launch in July 2020, they have helped 20 minority-led startups. They are dedicated to helping founders build equity within the ecosystem.
Women have still been seen as a cornerstone for change in the tech world and Fearless Fund supports that. The company aims to help underfunded women of color gain resources to three series of funding: Pre-seed, Seed Level or Series A funding.
Kapin said that it’s “up to the investor community” to be intentional on how they build their networks and despite the media coverage received and unveiling of stats, more action is still needed to democratize the essentials.