The word entrepreneur or founder conjures up plenty of imagery. For instance, the entrepreneur with a laptop and a dream. He is laser-focused on making a difference in our world. That entrepreneur starts working in his garage, hires a team, raises capital, and before he knows it, is ringing the opening bell on the New York Stock Exchange.
These types of stories aren’t just legends. There are cases where that solo entrepreneur started out with a garage and a dream. That being said, these examples are mostly relevant to privileged, white creators who have the resources and backing to take a risk.
Raising outside capital to scale a business is mostly catered to one racial group. The data is revealing. In Silicon Valley alone, 91% of venture capitalists are men. 98% of Silicon Valley VCs are white or Asian. And as you can guess, 90 of Silicon Valley VC funding goes to companies led by white males.
As a Black entrepreneur, finding investors for your startup is difficult, but not impossible. In the past few years VC firms, black angel investors, and accelerators have cropped up that provide funding for Black entrepreneurs. With George Floyd’s death and the #BlackLivesMatter movement gaining traction in national news coverage, the VC and investor communities have become more vocal in their support for Black startup founders, small business owners, and Black owned.
Opportunities for Black Startup Funding
Whether you're a Black entrepreneur who just started your business or one of the seasoned business owners looking for funding to scale your rapidly-growing business, there are opportunities to get funding for black entrepreneurs. You just need to know where to look.
We’ve provided a list of Black venture capital firms and investors at the bottom of this post, but we want to spend some time highlighting eight of those investors. Even if you aren’t currently looking for capital, it's always smart to network and start build relationships with the investors and accelerators. It'll make the fundraising process significantly much easier when you start looking for outside funding for Black startups and small businesses.
MaC Venture Capital
MaC Venture Capital is a seed-stage VC firm that is based in Los Angeles. Headed by Marlon Nichols, MaC invests in technology companies “that create infectious products that benefit from shifts in cultural trends and behaviors.” The firm understands that an increasingly diverse global marketplace requires talented entrepreneurs of color.
So far, it has backed Black-owned businesses and startups like Pipe, Ryff, Ready Responders, AirSpace Technologies, and Caffeine TV. Marlon has a long track record on focusing on diverse founders and giving them the opportunity to scale their businesses.
Backstage Capital has a strong history of investing in underrepresented founders, including African Americans. Firm has invested over $7 million in more than 130 companies led by underrepresented founders with big ideas.
Managing Partner Arlan Hamilton says: “We invest in the very best founders who identify as women, People of Color, or LGBTQ. I personally identify as all three.” Startups in Backstage Capital’s portfolio include Color Farm, Journey Foods, Career Karma, Akash Systems, and Promise. Arlan has even written a book to help underrepresented founders called It’s About Damn Time.
NewME was one of the first accelerators that provided support for entrepreneurs of color in America. Specifically, it offers an entrepreneurship program that serves early-stage business founders and their teams. Not only does NewME provide mentorship and specialized curriculums, but the accelerator has helped diverse founders obtain more than $47 million in VC funding. It's a great option for underrepresented founders who are just getting started with their businesses.
Harlem Capital Partners
Harlem Capital Partners is a well-known VC firm based in New York City. Its mission is clear: providing. Venture capital for black entrepreneurs and 1,000 other diverse founders over the next 20 years. Specifically, the firm focuses on minority-owned business and female founders in the United States. Harlem Capital currently has 20 investments that span cities like New York, Los Angeles, Baltimore, Salt Lake City, San Diego, and more. Startups funded by Harlem Capital Partners include PreShow, Moving Analytics, GovPredict, and Dexai Robotics.
DiverseCity Ventures is an impact-oriented VC firm. It has an extremely clear thesis. To back companies with “both positive social / economic / environmental impact, and high potential for outsized returns.” The firm is looking for companies that harness the power of diverse perspectives derived from things like ethnicity, nationality, gender, culture, and domain expertise. Based in Sheridan, Wyoming, DiverseCity Ventures is headed by Mariah Lichtenstern, who was named to Pitchbook’s list of one of the 27 Black founders and investors to watch in 2019.
Precursor Ventures defines itself as a “classic seed stage venture capital firm investing in long-term relationships with founders we believe in.” One of the firm’s main principles is holding itself to a high standard in terms of the diversity of Black founders it supports. Precursor Ventures is focused on investing in startups’ first institutional round of investments. In other words, it wants to be part of the company as early as possible. And is willing to back unproven, first-time entrepreneurs.
Hillman Accelerator is another terrific resource for underrepresented founders who want help growing their businesses. The mission of Hillman Accelerator is to operate “an inclusive entrepreneurship education program.” Those entrepreneurs accepted to Hillman Accelerator can capitalize on everything from outstanding mentorship opportunities to partnerships and capital investments.
The program takes place over the course of 12 weeks and participants are required to live in Cincinnati. The founder and CEO of Hillman Accelerator is Candice Matthews Brackeen, who is passionate about bringing together founders who need help growing and scaling their businesses.
Founder Gym is an online-only training program that helps underrepresented tech founders to raise fundsand scale their startups. Founder Gym offers six-week online cohorts, where founders complete structured exercises and receive training from investors and expert founders.
Compared to other online accelerator programs, Founder Gym has an explicit focus on fundraising and does not take any equity. It can be a great educational option for underrepresented founders who are looking to grow their businesses, build their networks, and access financing opportunities.
Additional Resources for Black Entrepreneurs
These are just eight accelerators and investment firms that can help Black founders grow their businesses. Especially if you are in the early stages of your business, it’s worth your time to do some research and consider working with these successful African American venture capital firms. They can significantly help you grow your startup and accomplish your business goals.
Beyond the eight firms listed above, there are other accelerators and VC firms that can help provide funding for black entrepreneurs:
Black Girl Ventures A firm that provides access to capital for Black entrepreneurs and African American angel investors for Black and brown female entrepreneurs.
Code Fever: An organization that works to increase the innovation of Black students, Black owned startups, and communities.
DivInc: One of the top accelerators for black founders and underrepresented entrepreneurs for accessing resources to launch and scale their businesses.
Valence: A new tech platform and community focused on connecting Black professionals globally with mentorships, job opportunities, other black angel investors, and capital in order to create massive economic wealth and social progress.
Code 2040: A nonprofit that focuses on activating, connecting, and mobilizing the largest racial equity community in tech.
The Fearless Fund: A fund that invests in women of color who are seeking pre-seed, seed level, or Series A financing.
Black Angel Tech Fund: A collection of Black angel investors who make “fearless investments” in Black tech.
Global Eye Entrepreneurs: Championing male entrepreneurs of color, connecting them to world-class resources and accelerating their businesses.
About Early Growth:
Early Growth is the largest national provider of outsourced CFO & accounting services in the venture capital space. For over 10 years, Early Growth has been providing finance & accounting, tax, equity management, and fund accounting services to startups at all stages. Early Growth is a strategic partner handling your finances so you can focus on your business, customers, and team.