By most accounts, raising funding for an early-stage startup or business venture is hard. In fact, less than one percent of all new businesses receive venture funding and less than 13 percent of businesses receive bank loans.
While there are many types and sources of funding, knowing where and how to get it can be difficult to understand and navigate. Accessing capital can be difficult for founders from all backgrounds, but underrepresented founders face systemic challenges in funding their businesses.
In 2020, less than 10 percent of venture capital funding went to women founders, and less than one percent of funding went to Black founders. Black founders are 25 percent less likely to receive bank loans for their ventures. Additionally, on average Black families have less than 15 percent the mean net worth of white families. This means that the notion of “friends and family” funding is out of reach for many Black entrepreneurs.
The statistics can be daunting, so I’d like to share three ways in which I navigated funding ecosystem bias to raise over $2 million for my startup and over $25 million (and counting) for my venture fund, Collab Capital.