Behind the Scenes of VC
When it comes to entrepreneurship, the Black community has seen a surge of new business owners, and a 2020 Guidant Financial report found that “72% of Black-owned businesses are profitable, a 5% increase from last year.”
But when it comes to entrepreneurs who want to take their brands to the next level, securing venture funding continues to be a systemic hurdle. Over the last five years, Black and Latinx founders have received only 2.4% of all funding.
Much like the racial wealth gap, which finds white families typically holding a net worth 10 times greater than Black families, there’s a disparity in funding for Black entrepreneurs. The New York Times reported, “On average, 17% of the funding to white startups came from investors, compared with 1.5% for Black founders.”
So despite hard-earned wins, a lack of capital continues to prevent access to the financial opportunities that are crucial for Black business owners. To be direct, Black and Latinx voices in business and venture capital (VC) are being blocked from economic advancement in a society where entrepreneurship is valued as a viable and celebrated path to success. In October 2020, PayPal invested $50 million in eight early-stage Black and Latinx-led VC funds with the goal of bringing more equity to the fundraising process. Blavity spoke with two recipients of these funds — Arian Simone, co-founder of Fearless Fund, and Austin Clements, co-founder of Slauson & Co. — about the Black VC experience, what aspiring entrepreneurs need to know and how an investment from PayPal is helping create a more equitable future.
Read this story in full at Blavity | March 2021