I was giving a talk about the inequities for people of color in entrepreneurship when a White male entrepreneur interrupted to tell me that it was hard for him too. That when he was starting his company, he had to max out his credit cards and did not have wealthy friends to fund his business. What I have tried to explain to him and to many others is that if you, as a White person, are playing the game on level 7, then people of color are playing it on level 11. These differences are compounded for women of color.
Like Duke’s Center for Advancement of Social Entrepreneurship, or New Profit, we all cite similar data to make the case that funding disparities exist. Black and Latinx founders receive less than 3 percent of venture capital funding; on average, Black women raise $36,000, while White men raise $1.3 million. We tell stories about the White entrepreneur who raised a friends-and-family round of $500,000 and the Black counterpart who raised $5,000.
Yet what ideas to transform teaching and learning will we leave on the table because we did not value entrepreneurial talent of color? What do we miss out on because we failed to provide the financial support necessary for their ideas to take root and spread?
Companies and organizations led by people of color do make a difference in building better solutions for students who look like them. In our still segregated society, often (but not always) being the same race means having a similar experience. It’s a lot easier to “empathize with your user” when you are your user. You can imagine why a barbershop might be a platform for educational change, or the impact a laundromat-library can have on Detroit youth. It makes sense to you why having a Black teacher matters to Black children doing better in school. You build tools for Android and text first because as cool as iOS is, you know that most people in resource-starved communities do not have an iPhone.
What I have learned this year is that there’s actually a lot more we do not know about the social capital markets. This lack of shared knowledge is holding us back from creating more effective capital markets, and from serving underrepresented entrepreneurs and users who reflect the diverse socioeconomic backgrounds in this country.
What is the average amount raised by a social impact founder of color in their first two, five, and 10 years as compared to their white counterparts? What percentage of CEOs are people of color in the portfolios of the top 100 institutional funders, fellowships and accelerators? What is the average wealth capacity of a social entrepreneur of color (and his or her network) compared to a similarly situated white entrepreneur?
If it is true that we “measure what matters,” then it is not a far stretch to assert that such data does not exist because it has not—so far—mattered to the investment sector.
Yes, there are prominent Black leaders and CEOs. But holding up the “exceptional Black founder” also misses other and more common implications of being undercapitalized. It means not being able to attract the talent needed to build the product. It means not having the sales force required to grow. It means not being able to afford the cottage industry of consultants that help you build capacity and provide strategy. And yes, those are the brakes in entrepreneurship.
The result are promising tools and services that ultimately fail—not just for the founders, but for the teachers and students who will not have access to the support and interventions that they need.
At Camelback Ventures, we have invested in 33 fellows over the past three years who are shaping their communities in powerful ways that need full support. They’re building tools and services from on-demand social emotional coaching for students to data tools for special education teachers to a platform that improves teachers’ ability to provide feedback. Collectively, they have raised over $14 million. That’s still a drop in the overall bucket of the over $2.5 billion in philanthropic and impact investing invested annually—so there is work to do.
For 2018, I predict we will see what we have always seen. To paraphrase a line from Hamilton, we’ll see “people of color getting the job done.” The only question is whether they will be able to cash checks stamped “sufficient funds.”
