While the narrative around diversity in tech continues to grow, little has been discussed concerning the low rate at which startups created by founders of color receive funding from the venture capital pot each year.
Little has been done to formally move the needle from what has consistently been reported as 1 percent or less.
Until measures are put in place, it seems that the trend of Black athletes and recording artists who are jumping into the tech investing game could help tip the scales a bit. However, there is a variety of factors to consider.
Indeed a number of Black notables have either recently started or are partners in venture capital firms targeting the tech arena. From iconic rap artist Nas to the inimitable Snoop to highly influential Jay Z, many recording artists have begun to focus on this area.
Professional athletes such as Derek Jeter as well as Carmelo Anthony are also throwing their hats in the ring.
In fact, Lo Tovey, a partner at Google Ventures, says that he believes such entrants help in supporting diversity efforts in funding.
“The reason is that most of the athletes have networks that extend to people of color,” Tovey said in an email to Moguldom. “Therefore, athletes are going to see more deal flow from people of color, which increases the chance of funding to those entrepreneurs.”
However, even a quick glance at portfolios shows less than 1 percent of founders of color have been funded.
Why?
First, while intentions may be good, perhaps even those of color are oftentimes victims of implicit, subconscious bias. They are subject to preconceived notions of what a successful founder looks like or how he or she behaves or what genius actually looks like.
In addition, it seems that the partners or collaborators with the heavy-lifting experience in venture capital are of non-diverse backgrounds.
The funding journey begins with referrals and relationships. It can be fraught with frustration and peril. In fact, many firms state on their websites that this is the sole manner in which they work. Some list no contact information at all.
For those outside of a certain social set, this makes penetrating and developing said required circles quite difficult. In fact, such separation, oftentimes deeply intertwined with class and race, is powerful and spills into disparities not only reflected in funding but in the C-suite, on corporate boards and more.
Much of this phenomenon is deeply connected to social interaction and relationship. So much so that new, exclusive organizations are springing up to counter traditional status quo situations, though with no guarantee that they, themselves will not be separated further by both race and class.
Even measures seemingly arranged to support tech founders of color, such as popular incubator Y Combinator’s diversity plan, seem to fall a bit short.
So what’s a Black founder to do?
Consider beginning to hold your favorite artist or athlete accountable. Ask their offices what their diversity plan is for investment for the year, and why current statistics for their portfolio are as they are. Approach those who have a track record for awareness around social impact and fairness. Many times, they simply might not be aware.
For example, Starbucks CEO Howard Schultz’s venture capital firm Maveron is quite active at investing yet the team, advisory members, and investment portfolio itself offer an exciting opportunity for expansion.
“I am trying to make a difference as an individual,” Shultz said. It is that mindset that can help ignite massive change in funding today.
As we all begin to prepare for 2018, the new focus is clearly to expand the conversation in the industry and with policymakers to include the entrepreneur and support our own creativity rather than solely that of the innovation of others.
