THERE IS A LOT OF TALK THESE DAYS ABOUT GETTING more women and minorities into the tech pipeline, from sponsoring programs to teach girls to code to ensuring recruiters seek out African American candidates. Nowhere is the diversity issue more evident than in the venture capital industry, which is dominated by white men who fund very few startups founded by women and minorities.
African American men receive 2% of the VC funding other startups get, while black women get a tiny fraction of that. According to DigitalunDivided's report, The Real Unicorns of Tech, VC firms lend white men $1.3 million on average even if their startup fails, compared to $36,000 for black women. In the past five years, black women received a negligible amount of venture capital funding--just 0.002%--while the number of black women starting their own businesses has more than tripled. There are only 11 startups founded by black women that have raised more than $1 million in VC funding, including Black Enterprise 2016 Techpreneur of the Year nominee Jewel Burks, co-founder and CEO of Partpic, an Atlanta-based visual recognition startup.
"Years of institutionalized racism, sexism, and classism, as well as the pressures of being the 'representative' of an entire culture of people, has made failure a costly proposition to many potential founders of color, especially black women," the report states.
Last year, the National Venture Capital Association pledged to increase its diversity efforts and the dollars invested in startups with black and female founders. A small number of black investors in Silicon Valley include Y Combinator's Michael Seibel, Precursor Ventures' Charles Hudson, EchoVC's Eghosa Omoigui, VentureFund.io's Clarence Wooten, Bronze Investments' Stephen DeBerry, Base Venture's Erik Moore, Intel Capital's Lisa M. Lambert, and Laurence "Lo" Toney from GV (formerly Google Ventures).
The disparity in funding has given rise to African American women venture capitalists looking to back diverse startup founders who could turn into tomorrow's high-powered CEOs. Monique Woodard recently joined the San Francisco-based accelerator 500 Startups, as its first African American venture partner, to increase the firm's investments in black and Latino tech entrepreneurs. She will continue to run Black Founders as executive director of the national organization representing tech professionals and startup executives.