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Are You Funding Black Founders?
Local & National News | July 06, 2020
Black founders are underfunded. Period.

By the way, other demographics are underfunded too and there’s something we can do about it.

If you’re reading this, you probably intuit that black founders have a particularly hard time getting funding of any amount.

Ironically, black founders are often lapping up scraps in an industry that creates hundreds of billionaires in our lifetimes (not to mention the invaluable intrinsic contributions of folks who build great products).

Take a popular and easy-to-grasp example.

Humanity will never be able to repay Steve Jobs for his genius and contributions to the lived experience…(nor can we repay Katherine Johnson, the Hidden Figure who helped John Glen orbit the Earth). 

And that’s the point.

Brilliant STEM minds are more accessible today than at any time, in space and time, yet black founders are still not being funded.

There’s something you can do about it.

Even among our own community, we hold black founders to standards of perfection, when all we really want is the opportunity to be mediocre, and surprise you, just like everyone else.

 

Are YOU funding black founders?

Since 2019, I’ve invested in 6 startups and counting, although I’ve yet to write a check for $25,000 cash and that may be further off than you might think.

You can help black founders too, even if you don’t use their products (or invest cold hard cash).

After all, maybe you know a soul who purchased shares in X car company stock, yet they have never even test ridden it.

This article kicks away the excuses we use to not fund black founders. 

Wading into the tech startup waters is a little different than what you might think, and this article is NOT investment or legal advice, but rather business insights based on what I’ve come to appreciate about locally, underfunded tech startups led by black founders, and how you (yes YOU) can help.

 

Are you actually funding black founders?

1. Money is the cheapest thing you can ever give to a tech startup founder (if you’re a great angel), but it is often the ticket price to entry.

If you’re like me, you’re probably thinking you had to invest BIG money to help out a black founder in need.

After all, if a founder is raising, you’re kind of wasting their time if you don’t invest in their company right?

After all, time is duckets (as my Pops would say). 

Again, this article isn’t about whether you should or whether you should not invest in black-led startups.

However, the insights we’ve gained from tech startup underdogs who have developed serious traction in their companies and built a solid pedigree over their careers still find difficulty getting funded. 

You can do something about this.

Assuming you’ve already made the decision to invest in a startup, I found you might want to communicate at least once a month with the founders if you’re an active angel (and merely reply to a founder’s monthly email if you’re passive).

I suppose technically, you could become a completely passive member of a founders team (a silent partner), and not communicate at all with black founders.

But if you’re reading this article you’ll appreciate that some of the more intrinsic benefits of being active in your startup network, such as relationship growth and business savvy, pale in comparison to the money actually exchanged for access, if any.

Why give more duckets? 

First, feedback is huge for a black founder, if you actually use their products.

I’ve used four of six founders' products and it really helps to provide founders with that timely feedback, plus founders can tell when you’re not hip to their operational world.

That’s just the way it is.

More importantly, if you can curate additional feedback from other users and consumers, that’s big cabbage too…more lingo from Pops.

We’ve curated feedback by hosting app launch parties in Harlem (mostly in late 2019 and early 2020), with aspiring angel investors, founders and creatives from across the city.

Can you guess what happened?

Not only did black founders get funded (with cash), but these black founders got funded with support from a growing community of others who believe that our digital future depends mostly on our physical actions together, today to create that digital world.

A few blocks away from Madame CJ Walker’s historic home in Harlem, folks gathered to celebrate tech startup founders under a fun and entertaining agenda, networking games and a pitch replete with a Q&A.

While the VCs in attendance asked brilliant questions, it was feedback from users, consumers and creatives that propelled the conversation and connected dots nobody thought to fuse.

We even hosted one app launch party for a FinTech company on the same street that Madame CJ Walker used to drive upon. 

That’s culture.

These cast of characters revealed what you can also probably intuit.

There’s one thing you provide to black tech startup founders that’s older than capital, “feedback”.

From people like you and me.

And when you gather folks in a living room/kitchen under a singular purpose with a structured agenda, a unifying interfaith blessing and tech-enhanced networking, the outcome is uplifting to everyone in the room.

But don’t take my word for it.

2. If you’ve ever blown $250 in a weekend you could invest in a black-led startup.

Again, I’m not saying that you should invest. Just that you likely can.

My point is that the price of connecting with a tech startup founder shouldn’t be a factor that results in black founders being underfunded; and the truth is, it really never is. 

Some sales experts suggest that price is a made up concept, and whether you believe this or not, price is essentially a value we ascribe to things that change based on so called “market demand” (and supply).

To take it back a slide and bring it back from the ethereal, you can help black tech startup founders even if you’re not rich.

Now, for the juicy stuff…

3. Here’s the deal, certain customers won’t have access to the products they really need, because black tech startup founders aren’t being funded.

The external networks that support black founders are sometimes unable to manufacture, support and distribute their products to markets, limiting consumers to products designed for a broader customer base, which can be highly inefficient and inconvenient sometimes.

When black founders are underfunded, so are the communities they serve.

Many of these founders are serving communities where it’s typically too costly to penetrate commercially, without a cultural or marketing advantage. 

When it comes to black founders, funding often comes out of networks, rather than inward

Historically, our ancestors lived and died as capital stock, and contemporary black founders are turning that concept on its head by serving markets like professional recruiting, local tourism, financial planning and trucking, using their existing networks to pull together enough resources to outlast the insolvency trap. 

It’s not uncommon for black founders to enter pitch competitions and get hit with market-based questions, suggesting that the founder couldn’t possibly have an advantage with black consumers (or widely applicable products), because more well-endowed corporations haven’t “figured it out yet”.

Luckily, a shift from a scarcity mindset to one of abundance shows just how important it is that black founders be funded.

People’s lives are at stake.

4. And without funding black founders, entire markets get left behind. 

...Or swept into go-to-market strategies that can prove more costly than expected.

One example is banking. 

Believe it or not, it’s hard for some folks to conceptualize that there are still swaths of folks in our communities who are unbanked.

Yes, there are still folks who are unplugged and waiting to be plugged in, and there are still businesses that need resources to adapt to an ever changing commercial landscape. 

It’s not your problem that a black founder isn’t ready for a huge cash (or network) injection, but you can likely help them go from zero to one...with enough time.

Another example is local tourism. 

Local differences in business tastes aren’t bad, in fact it's the beauty of growing up in the urban United States of America, or in other cosmopolitan pockets around the globe. 

It’s not that black founders are always exceptional, but that black founders who haven’t broken the seal on success yet, or dare we say mediocre, can be transformed.

Just like other average startup founders who have surprised us with exceptional companies after linking up with a strong network who supported and believed in them.

We often pride ourselves on our ability to predict great companies before they make it big, but at some point we realize that numbers are necessary but can only take you so far.

So I’ll ask again, in an obligation-free way…

Are you investing in black founders?

 

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