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Black Founders Talk Racism In Startups

Posted by Early Growth

July 1, 2020    |     8-minute read (1596 words)

It’s no secret that many Black entrepreneurs are left with no choice other than to bootstrap in the early stages of their company. The lack of capital and ability to get business loans have long presented themselves as a barrier to growth for Black-owned companies. 

Now with the Black Lives Matter movement, the question for many Black startup founders and entrepreneurs is will there be a change?  Before we answer that question, it’s important to share what business looks like for Black entrepreneurs. We asked several to share their experiences with racism in business and the hurdles they’ve had to overcome as they toggle with surviving and scaling.  And though many Black founders have hit roadblocks built by systemic racism, some are hopeful that change is very near.

Joy M. Hutton, founder of on the go Glam

on the go GLAM is a multi-sided marketplace that delivers hair, makeup, and nail services in the convenience of your home, office, or hotel. Customers can conveniently receive beauty services because salons are closed at a certain hour; wait times are long, and traveling to the salon may be a hassle. 

The biggest hurdle for my business is gaining capital in order to scale. I am still overcoming this hurdle, but am bootstrapping in the meantime and learning how to scale with the resources I have available to me. 

It is no secret that Black and Latina women are at the bottom of the totem pole when it comes to receiving funding. This is a barrier I am constantly trying to overcome, but it is my reality. I have been diligent about building a network of people that support me and what I'm doing so I can have access to the right resources.

Charmaine Griffin, founder of Kollective Koils

It took 5 years before I created my first product. Kollective Koils makes handmade natural hair care products for kinky-haired naturals using plant-based ingredients. 

Finding resources and access to funding seems very hard for many Black female entrepreneurs. Most of us have stories of working 9-5’s and using that income to build.  There’s a  lack of capital and knowledge on how to get the capital in the first place.

Jeremy Evans-Smith, founder & CEO of Ascending

Ascending is the community for startups committed to building racial empathy. We’re the first centralized Diversity, Equity, and Inclusion (DEI) resource hub, led by Black-voices, experts and activists. We help bridge the gap between good intentions and sustained action.  

The biggest hurdle has been getting past “no” over and over again. I grew in persistence and fought to deepen my expertise at the intersection of DEI and HR/Recruiting and position myself as someone who adds unique value. Also realizing my lane (as a bridge-builder) as opposed to trying to fill someone else’s lane.

Racism looks like “gatekeepers” not taking DEI work seriously (read: going deep enough to root it out) mainly due to a lack of lived experience. I began to empathize with their perspective, and its inherent limitations and reverse engineered a way to help close the distance. 

To help Black founders, there should be non-dilutive funding. This is critical to allow us to work out solutions for problems we uniquely face and lead to potential gains for investors (and the world). It also acknowledges the wealth gap and how that significantly impedes Black founders from starting and finding business sustainability.

I lead with recognizing none of my work exists or achieves any sort of success without Black female, trans and queer voices. Period. So at every level of leadership, I’m actively including, listening, believing, and amplifying those Black voices, especially. 

Brooke Sinclair, CEO of Velour Imports

Being a Black woman has been my biggest hurdle. I am moderately hopeful about better opportunities for Black founders because I know what I plan to do to help other founders with black and brown skin succeed after I succeed.  If no one else, I am going to do my part to help founders who look like me. 

Jessica Hylton, founder & CEO of The Royal Sweet Shoppe

I recall an incident when I was sweeping the floor of my shop.   I had Hispanic painters painting the ceilings and a woman walked in and passed me.  She didn’t greet me or acknowledge me. She started to tell the painters the shop looked amazing and that she couldn’t wait until it opened. She proceeded to ask what exactly they were going to be selling. The painters point to me and  answers,  “that’s the owner” and the lady looked at me and walked out.  That same week a white older gentleman walks in my store without my permission, looks around and asked,  “how in the hell did you get this space?”  

Racism also looks like investors looking at my books and thinking my projections are amazing but when the week comes to sign the deal or dispense money they realize I’m Black and ask whether or not I should make my financials a bit more conservative, that I may be overreaching. 

I overcome these moments by showing up every day consistently, professionally. We now have a total of 5 locations, 3 in the states and 2 in other countries- Haiti and Zimbabwe.

Yes and I can see change coming. It’s different this time. Go Black!  

Aireka Harvell, founder & CEO of Nodat Inc.

Nodat is an action-driven community marketing platform that helps small local businesses drive new and repeat customers using gamification and incentives.

I’m a Black female tech founder in the local marketing space. I was told that I would not be successful because of this. I was told that my community would not support me and that we do not have access to the necessary type of talent it takes to build this kind of business and access to the network with the resources. I was told to hire a white man to be the face of the company and not to disclose that I was the founder. I was told to send my white business partner to talk to the target customers when conducting customer interviews. I cried a lot but chose not to listen to this advice. Although it has caused us to grow at a much slower rate we have still acquired over 20K downloads and 1400 registered businesses with our Alpha product. We now have our first investment from Beta Boom and are working to launch our new product and prove product-market fit. I decided that I was going to try to prove the naysayers wrong and that meant learning everything that I didn’t know. Making sure that I am coachable and stepping outside of my comfort zone.

There are a lot of programs for Black founders that offer Mentorship but not a lot of them come with funding. This is primarily due to the fact that a lot of the wealth is still controlled by older white men who still hold true to certain biases in the venture capital space and who believe that investing in this demographic of founders is untested and riskier. There needs to be more capital allocated to funds that directly support Black founders at the seed and pre-seed stage.

Rohan Brown, founder & CEO of Barley, Inc.

Barley is an app enabling your guests to order food and beverages remotely right from their phone for takeout or dine-in experience. We are helping the restaurant industry recover from the pandemic by bringing their business online at a low cost as well as monitoring occupancy limits on-premise.

Being a Black solopreneur has its obstacles but I’ve been able to manage the ups and downs by building a tribe. A group of other entrepreneurs in and out of the tech space who face the same obstacles as me and can relate to the struggle.

Racism in my business life comes in many forms but the most prominent being lack of funding for black founders. Investors can’t resonate with me or see themselves in me so it becomes difficult to obtain funding no matter how convincing the business value proposition is. I’ve had to go the extra mile to be taken seriously and prove we have a promising venture. Also, we're based in Philadelphia where the African American population is 44% and the percentage of Black-owned businesses is 2.5%.

More Angel and VC funds should be allocated to Black-led companies. We need to be put in positions to succeed. Here in Philly I’ve been advocating for a Minority Tech Guild to serve as a navigational system for minority founders. I believe the individuals who face the most adversity will create groundbreaking companies of the future.

I’ve hired and worked with individuals intentionally that are different from me but have the same ambition. In my opinion, the more perspectives I have the better off the company will be. There’s strength in unity and wisdom in diversity.

I’m very hopeful there will be plenty of opportunities for Black founders. We are resilient and have come a long way plus, we’re just getting started!

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.

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