Originally posted on SocialWayne.com
Letâs start with some facts:
African Americans make up 1% of Internet company founders nationally. (source)
Whites make up 87% startup founders, with Asians make up 12% (source)
Minority angel investors account for 2% of the angel population. (source)
Minority-owned firms represented 6% of the entrepreneurs that presented their business concept to angel investors. (source)
92% of venture backed startups are male (source)
California ranks as the highest state in terms of number of VC deals with 48%, with New York at 14% and Boston at 8% (source)
Half of the startup founders who Raise Money ages range from 35-44 (source)
Black unemployment: Highest in 27 years (source)
Hot Topic for 2011: Black Startup Founders/ Entrepreneurs
This year like never before have conversations, meetups and programs been launched and talked about why are there so few blacks in tech, or why black startup founder are not getting the same opportunities or access or why such programs as the NewMe Accelerator and organizations such as Black Founders are needed. It’s about time is how I feel about since I’ve been in the web/tech space since before the first dot com bubble and even though the internet is suppose to make things a level playing field, sadly when it comes to launching a web tech startup and getting funding it’s not. Some people act like racism doesn’t exits and want to say if you have a great idea or product, you have the same chances as everyone else. I tell you that is just not true in most cases.
True Stories from Silicon Valley:
This summer while we were in Silicon Valley for the NewMe Accelerator we learned a lot and kept hearing a few repetitive stories. One was about a young teenage Indian programmer who worked for another startup, left and pitched an idea, no app, no MVP, nothing but an idea and walked away with over $700,000 in funding. Another was from leading Venture Capitalist and investors such as Jay Jamison, Mitch Kapor, Michael Arrington, and Ron Conway that there are not enough Black startup founders and/or they don’t see enough Black Startup founders walk through their doors and/or there are not enough successful Black startup founders who have raised funds as examples for others. So if you don’t see the need for such programs such as the NewMe Accelerator or Black Founders or groups such as Blacks in Tech. Don’t argue with me… I dare you to argue with them.
flickr photo by Juan Haro Rodríguez
Black Founders/ Entrepreneurs Are you ready?
Since the launch of the NewMe Accelerator we have received tones of request from Black Entrepreneurs with startup ideas looking for help in terms of mentorships, funding, partners, investments, design help, programming help, you name it. But most of the time the request is looking for small seed investments to get an an app or product launched. When the phone rings I can almost predict the conversation, it goes a little something like this: Hello, I have an idea or startup that’s going to be big. Can you help with funding or mentoring or introduce me to someone with money. Every now and then someone will say, I’m building a new social network that’s going to be bigger than Facebook and I my response is usually, Ok, can you send me a deck and after that I hear nothing.
Regardless of the phone calls or who has an idea or not, one thing I learned being in the Valley during the summer is there’s a system, a format a bar set by other startup founders to raising capital and that bar is high. It doesn’t matter what color you are, if you don’t follow the protocol or format or standard unless you have a NBA friend, or rich uncle or have the right people in your network with capital and trying to raise money for your startup in this economy…good luck!
Getting in and making a difference:
With everyone launching a startups these days or have an idea to launch one, this is why the business / community accelerators are on the rise and startup accelerator/incubator such as Y combinator, Founders Lab, Tech Stars, and 500 Startups are like the NBA and NFL draft for entrepreneurs.
The numbers for how many black startup founders who have participated in such programer have yet to be made public and while a few incubators are well diverse such as 500 Startups in terms of race and gender none have had a large or a significant amount of Black founders participate over the years. If I’m wrong, show me the data and explain the 1%. This is why we launched the NewME Accelerator, it’s why I’m happy to see the growth and future of the Black Founders group in Silicon Valley and why programs such as theDreamIt and Comcast Ventures for minority-led startups are being created.
If youâre a founder that makes it into one of these programmers, consider yourself lucky and take advantage of the opportunity because you may not get another chance and there are thousands of entrepreneurs who would love to be in your shoes.
Your startup chances by idea and team to raise money:
I donât have any hard data yet but this is my observation for Black Startup Founders/ Entrepreneurs:
Idea + Team = Chances to raise money
Start a new social network
Single founder with no startup and no coding experience = .5%
Team (developer, CTO, designer) with little experience = 2%
Single founder with experience from a huge successful social network = 4%
Launch a hip hop or Urban platform or urban blog/website or urban video site
Single founder with no startup and no coding experience = 1%
Team (developer, CTO, designer) with little experience = 3%
Single founder with experience = 5%
Launch a mobile (iPad, iPhone or Android) app
Single founder with no startup and no coding experience = 5%
Team (developer, CTO, designer) with little experience = 10%
Single founder with experience = 20%
Team (developer, CTO, designer) with little experience = 30%
*If youâre a black woman and single founder = -1%
The harsh reality for black entrepreneurs in the web/tech space. Your chances of raising startup capital are slim to none. If you’re an entrepreneur, good luck and prove me wrong. If you’re an accelerator or incubator, open your doors and prove me wrong. If you’re a venture capitalist please prove me wrong!