I think it’s become trendy to solely blame Silicon Valley for minorities not getting funded. But those in the industry know it’s more complicated than that. Understanding how fundraising and Silicon Valley works will shed some light in the real problem. How did Amazon or Snapchat get all of that money but black startups to get none?
One place to look is the first two rounds that black communities typically can’t raise BEFORE approaching the valley: Family, Friends, and Fools round (FFF) and Angel Investors. The wealth gap is a larger issue for Black getting funded than people think because the first two rounds typically come from the founder, their family, friends, fools and Angel investors THAT THEY KNOW. Key: that they know. Much more likely to get early money from people that know you than strangers (Amazon and Snap founders got it from their dads). After you get $100-400k from these people and have built enough traction to pitch VCs you then have a much higher probability of getting VC Capital.
Angel investors are just wealthy people in your community which is why athletes and entertainers get hit up so much in our community to bridge this gap.
Micro-VCs are funds under 25m, Queensbridge is a micro VC, typically writing 25-50k checks into seed rounds. Not enough to solve all of your problems (unless 10-20 partner together to take down rounds, which is for another post!). But look what happens when our black founders get FFF and Angel/micro VC’s round down – Mayvenn just raised a monster Series B from top 10 VCs, we can compete as well as everyone else!
But know the process, we get caught at the first two steps then we are trying to get VC meetings and funding with very little traction compared to others who have raised two rounds from FFF and angels before they pitch VCs. Of course, there are other factors but I’m running out of characters! Haha. Chime in, ask any questions about angels, micro VCs, and VCs below!
Other communities can’t solve our problems, we have to solve them ourselves. I actually have the solution, it will be revealed in due time, it’s currently in Pilot 🤫👩🏿🚀👨🏾🏫👨🏾💻