You have to spend money to make money, as the saying goes. But if you have no money to spend to start your own business, then you have a major entrepreneurial dilemma. And that is the situation many African-American women looking to make their business dreams come true find themselves in. Access to capital just isn’t there. And you can basically forget reaching out to venture capitalists for support. People tend to like to do business with people who look like themselves and Black female venture capitalists are pretty much nonexistent.
Think about it.”Even a failed startup is able to raise, on average, $1.33 million in venture capital. But if the startup is run by a Black woman? She might get $36,000,” reported Day News.
One look at Forbes‘ recently released 2017 Midas List, featuring their selections for the world’s 100 top venture capitalists, and the problem is obvious. The list has zero Black men. And not one Black woman either.
Research by digitalundivided found among the 60,000 companies it surveyed, 1,630 white male venture capital partners and a mere 5 (or .003 percent) Black women. And out of 10,238 venture deals from 2012 to 2014, just 24 (.002 percent) of them were with Black women.
“Silicon Valley jargon calls this the 2 percent problem, referring to the narrow slice of African-American representation in the largely white and Asian male-dominated world of tech startup. On the Midas list, it’s more like a 0 percent problem,” reported Day News.
The few Black women who are venture capitalists are trying to make a difference. Monique Woodard is among the .003 percent of capital partners who are of color. When she became partner at 500 Startups, she launched an initiative to invest $25 million for approximately 100 Black- and Latino-led early-stage startups.
“I very specifically wanted to work at the early stage when founders need the most help and the most support,” Woodard told USA Today. “That’s where you can make the most impact for black and Latino founders.”
Woodard is also the executive director of Black Founders, an organization focused on creative diversity in tech and increasing the number of Black entrepreneurs in the sector. She’s one person making sure change is coming to Silicon Valley.
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