It’s no secret that Black founders have a hard way to go when it comes to securing funding. The main reason why venture-backed startups are “still overwhelmingly white, male, Ivy League-educated and based in Silicon Valley,” according to a recent study conducted jointly by RateMyInvestor and DiversityVC, is that funding for minority startups is nearly non-existent in comparison.
According to one recent study, of the VC-backed deals over the last five years out of more than 10,000 founders “77.1 percent of founders were white—regardless of gender and education. Just one percent of venture-backed founders were Black,” Crunch Base reported.
To help combat these dismal numbers, CEO Renee King and CTO Kashief Henry created FundBlackFounders (FBF), a socially conscious crowdfunding platform for Black entrepreneurs.
Both King and Henry are entrepreneurs so they understand the funding problem for Black founders. King, whose professional background includes pharmaceutical sales, strategy consulting, business advisory and development, founded TechUrElders, a tech-enabled service offering technology tools and tips to help users care for elders. Henry has started various e-commerce sites.
“We’re launching a cohort of Black entrepreneurs’ crowdfunding campaigns in celebration of Black History Month. Unlike our white counterparts, most Black entrepreneurs don’t have access to funding their campaigns. In which they would have to rely on their social influence,” said the FundBlackFounders founders in a press release.
King told Moguldom about their focus and objective.
Moguldom: What first prompted you to start the crowdfunding platform?
Renee King (RK): Black founders receive less than 1 percent of venture capital dollars. During my first solo entrepreneurial journey, I lived the underfunded founder struggle. Throughout that journey, I met many amazing Black founders with businesses bigger and better than mine, also enduring that same underfunded struggle.
It’s hard not to feel defeated every time you see that “no capital for Black founders” headline. So I made the decision to put my first startup on pause. For me, it was a “which comes first, the chicken or the egg” decision, or in this case, my startup or funding for Black founders. I could push on with my first startup and secure the bag for myself and my startup, or I could take another path of securing a bigger bag for every emerging Black startup. I picked the latter and pivoted to create a crowdfunding platform
for Black founders.
Moguldom: Why do you feel it is necessary to “change the narrative” as we move toward Black History Month?
RK: As a collective, we are standing on the shoulders of the giants who came before us. And now it’s our turn to become and to support the new Black History Makers. It’s not enough for us to just highlight, reflect on and remember our ancestors. We should remember our ancestors but also take action to becoming our ancestors wildest dreams. Each of the Black Founders currently crowdfunding on FundBLACKFounders.com is creating the new Black History. And we all have to come together, support them, uplift them and contribute to their campaigns so we can have more diversity in business ownership.
Moguldom: What are your “day jobs”?
RK: Multiple revenue streams are our day jobs. Majority of the FBF team are employed entrepreneurs. I am really proud of that. In addition to running FBF, I am a part owner of a credit repair company and I do operations management for a private client.
In between fixing and innovating FBF tech, Kashief enjoys launching e-commerce websites for fun. I think he currently has like 10 e-commerce sites live right now, and he’s making money from all of them. Anytime we’re in our tech meetings all we hear is his sale alerts going off in the background — kaching, kaching, kaching! We’re gonna change his name from Kashief to Kaching.
Moguldom: Why crowdfunding?
RK: Crowdfunding is a great collaborative funding model to help Black founders gain access to capital, and Black conscious consumers gain access to more Black-owned businesses. Black people already crowdfund every Sunday by way of the church, we now need to increase the number of Black entrepreneurs crowdfunding. We are working to build a solution that increases crowdfunding awareness, access, and utilization amongst Black founders.
Moguldom: What do you hope to ultimately achieve through the platform?
RK: Our vision is to create equitable and inclusive economies, where in addition to participating as consumers and employees, Black people will drive the economy through ownership.
Black buying power is expected to hit $1.5 trillion, but only 3 percent of that buying power is spent at Black-owned businesses. We’re in this weird space where Black entrepreneurs lack the capital they need to launch or scale their business, and Black conscious consumers want more Black-owned businesses to support, and still, these two groups have yet to align. Our vision is that a Black entrepreneur focused crowdfunding platform can be a catalyst for connecting Black spending power to Black entrepreneurs seeking capital, resulting in increased Black ownership and Black economic opportunity.
Moguldom: How has technology benefited Black entrepreneurs in your opinion?
RK: Technology, mainly the Internet has opened up information access which has been a tremendous benefit to Black entrepreneurs. Any and everything you want to learn is accessible right at your fingertips. Black entrepreneurs have taken full advantage of that and have used these skills to launch solid technology companies or tech-enabled businesses, now they just need the capital to scale these businesses.
Moguldom: Why do you feel it is so hard for Black founders to raise money?
RK: A lack of access makes it hard for Black Founders to raise money. The VC industry, similar to many other industries, is a heavy relationship business. One VC I won’t name shared how even though they have an open submission application on their fund website where they see a huge amount of applicants; their portfolio still skews 85-90 percent referral. So while they receive and review more cold submission applications in comparison to the number of referral company applications, their selection process still ends up skewing towards the warm intro/referral companies.
Deals are being made in spaces we are typically not present in, ie. vacation homes, private jets, and yachts, country clubs, private social clubs, etc. It’s not to say we’re not in these spaces ever it’s just not our everyday environment therefore it limits our access to forging relationships with the current “decision” makers. And generally speaking, when we are in these spaces, we’re probably not surrounded by decision making people, we’re just guests.
Access also means who you are currently surrounded by. Imagine deciding to launch a startup, your neighbor manages a hedge fund, your best friend is an engineer, your significant other is a sales and marketing genius, and your cousin just sold her company to a tech giant…and all of these folks in your life eagerly jump in to help you and introduce you to all the power players they know. Do you see how if this is the network that you have surrounding you how you are able to naturally fall into funding versus when you don’t have access to this type of network? This is the level of access every Black founder needs and once this happens we won’t have raising-money issues.
In addition to increasing access for Black founders, we need to change the “decision” makers. Similar to how Tyler Perry decided he was not going to fight for a seat at a table instead he decided to build his own, we as a Black collective have to build our own tables of money to fund Black innovation and Black business.
Moguldom: What’s next for you?
RK: What’s next is this platform grows! We always find ourselves looking for seats at tables not built to hold us, well now we have our own and I’d love to see Black founders and entrepreneurs pull up a seat and build from our foundation. We’re going to be so good that we can no longer be ignored.
