By CultureBanx Team
- UBS has committed $3M over three years to the Black Innovation Alliance
- Black Innovation Alliance’s ‘Decade of Black Innovation’ supported by UBS will drive $1B to the Black entrepreneurial ecosystem
The Black innovator economy has received a major boost from the legacy financial sector. UBS has committed $3 million to the Black Innovation Alliance (BIA), a 90-member organization closing the racial wealth gap by building pathways that provide equitable access to resources, knowledge, and opportunities for Black entrepreneurs. Through ushering in the next decade of Black innovation, UBS is at the forefront of helping build a more inclusive entrepreneurial ecosystem for Black founders scaling high-growth businesses.
Why This Matters: Black innovation refers to the creation and development of new ideas, products, services, or processes by Black individuals or communities. It can take many forms, including technological inventions, artistic expressions, social movements, and entrepreneurial ventures. UBS’s investment will directly support BIA’s Decade of Black Innovation and drive $1 billion to the Black entrepreneurial ecosystem.
“Equitable access to capital, resources and knowledge is critical in order to achieve a better, more inclusive world,” said Naureen Hassan, President of UBS Americas in a statement. Specifically, BIA’s Decade of Black Innovation has the potential to drive economic growth, improve social outcomes, and promote greater equity and inclusion.
Access to networks and connections is critical in raising capital. For a long time Black founders have been excluded from the traditional funding landscape. Several studies have highlighted significant disparities in capital raising for Black entrepreneurs compared to their White counterparts.
For example, according to a report by ProjectDiane, Black women-led startups in 2020 raised only 0.6% of the total $150 billion venture capital funding. By the end of 2022, adverse market conditions led to a 36% drop in overall VC dollars, but Black entrepreneurs saw a 45% decrease in financing, according to the Crunchbase data.
The problem is deep and multi-faceted when it comes to the entrepreneurs in need of resources and access to money. “Black founders and innovators need safe spaces to grow, build, even fail, but that doesn’t happen without support – the more Black ISOs we support, the more Black entrepreneurs succeed,” said Kelly Burton, Co-Founder and CEO of BIA.
Disparities experienced by Black founders are often attributed to systemic biases and structural barriers in the venture capital industry, such as unconscious bias, lack of access to networks and mentorship, and a narrow definition of what constitutes a “good” investment. To address these issues, efforts are underway to increase funding opportunities for Black founders, such as the launch of dedicated funds and accelerators, as well as initiatives to raise awareness about the importance of diversity and inclusion in entrepreneurship and innovation.
“The aim of UBS’s signature partnership is to help BIA build the infrastructure of support needed so that Black founders can succeed for years to come,” said Jamie Sears, Head of Community Impact & Corporate Responsibility, Americas at UBS.
What’s Next: Addressing these issues will require a concerted effort from both the institutional investment community and society at large, to promote diversity and inclusion in entrepreneurship and innovation. The UBS and BIA three-year partnership will include launching a digital laboratory with resources for founders, hosting training summits for members, providing funding to help develop new and innovative ideas from its member organizations.
CBX Vibe: “Bia’ Bia’” Lil Jon & The Eastside Boyz