Entrepreneuring While Black

Black Entrepreneurs face systemic racial discrimination when trying to raise money to launch a business. They are further subjected to a double standard that criminalizes their actions while their White counterparts often get a pass.

According to a recent survey, two-thirds of Americans cannot name more than a handful of Black entrepreneurs. There is a reason for that. Systemic discrimination deprives them of a critical ingredient to starting a business: venture funding. According to a 2020 study, only 1 percent of venture capital funding goes to Black entrepreneurs.

Data from Crunchbase via TechCrunch

"In the clubby world of venture capitalists, who spent $130 billion in the United States last year and helped anoint the world’s four most valuable companies and countless other successful start-ups, there is effectively no legal backstop that ensures people of color have an equal opportunity to share in its wealth creation."
Reed Albergotti, Washington Post

The Racial Disparity

"Unfortunately, the cancer of racial bias and its attendant manifestations entrenched through the alarming levels of income inequality and racial disparity of shared prosperity has metastasized into investment and funding ecosystems."

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Americans See the Discrimination

62%

Source: Survey of 1,062 Americans conducted on June 13, 2023. Margin of error is +/- 2.5 percent).

A massive 62% of Americans said they believe “there is a bias among investors against Black entrepreneurs seeking to start a new venture. That is the primary reason why black entrepreneurs are not funded,” according to a recent survey.

Criminalizing the Actions of Black Entrepreneurs

Start-ups, especially in Silicon Valley, are famous for their “fake it until you make it” ethos. Founders sell a vision to investors and would-be customers, then scramble to turn it into a reality once they get funding and product orders.

From Apple to Tesla, American business lore is filled with billion-dollar companies built on this bluff. These efforts have rarely been deemed unethical and, certainly, by no means, criminal as such actions are part of a longstanding and mostly unwritten culture of doing business in Silicon Valley.

However, for Black entrepreneurs, they can “fake it until they make it” at their own peril. If you are a Black entrepreneur, you are forced to play by a different set of rules or face the prospect of having your actions deemed a crime. Even though most white-collar crimes are committed by people who are White, people of color are incarcerated more frequently and for longer.

5.9

Source: The Sentencing Project

"African-American adults are 5.9 times as likely to be incarcerated than White people and Latinx people are 3.1 times as likely.

As of 2001, one of every three Black boys born in that year could expect to go to prison in his lifetime, as could one of every six Latinos—compared to one of every seventeen White boys."