- Black & Latinx women founders received a reported 31% increase in venture capital funding in excess of $1M from 2018-2020
- Since 2015, Black & Latinx women founders only received 2.4% out of roughly $96B
Black and Latinx women startup founders continue to display the resiliency that has long been in existence throughout their communities and received a reported 31% increase in venture capital funding in excess of $1 million from 2018-2020. Now, more than ever these female bosses are being given an overdue yet well-deserved spotlight. While there are clear improvements, there remain many in the venture capital space who are not fully convinced that their success can be multiplied, as Black and Latinx women founders are still raising less money than their counterparts.
Why This Matters: A recent report from Crunchbase following Black and Latinx-founded companies since 2015, found that of the total venture capital funding secured, these entrepreneurs only received a whopping 2.4%, out of roughly $96 billion. There are many reasons for this but let us discuss a few. Sticking to what you know and who you know can have severe unintended consequences. As you might expect, in a male-dominated industry, that consists of more than 70% white venture capitalists, 26% are Asian and only 3% of them are Black, sticking to what you know leaves out diverse women.
In a male-dominated industry, that consists of more than 70% white venture capitalists, 26% are Asian and only 3% of them are Black, sticking to what you know leaves out diverse women
These women need a serious injection of liquidity because when venture capitalists stick to who they know, it ensures a widening gap between those in exclusive networks, and those without the pre-existing qualifications to compete fairly. Practices like these disproportionately impact Black and Latinx founders who already struggle with raising capital through the more traditional channels of family/friends, bank loans, etc. As the saying goes, if you want something done right, well you know the rest.
Situational Awareness: The National Venture Capital Association (NVCA) and Deloitte partnered to produce the Human Capital Survey which revealed that despite their being a roughly even distribution of women and men in the venture capital space (45% women and 55% men), looking under the hood when it comes to making investment related decisions as to who gets what and why, representation is far less evenly distributed (11% women, 89% men). So, although there are new female-led startups each year breaking records and doing it all despite the prevailing odds, we have quite a way to go to ensure equal access and opportunity makes its way through the nation aggressively.
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