She Strengthens

Breaking Down Barriers: The Struggle for Black Female Founders to Secure Funding

The tech industry has long been plagued by a lack of diversity, but a recent article shed light on a particularly alarming issue: the staggering disparity in funding between black female-led startups and their counterparts. Kathryn Finney, entrepreneur and angel investor behind #ProjectDiane, is on a mission to change this narrative.

The Alarming Statistics

Project Diane’s research study evaluated 88 tech companies led by black women, revealing a distressing reality: these startups receive a mere 0.02% of overall venture funding. This means that black female founders are being denied the opportunity to turn their innovative ideas into successful businesses. The numbers are even more striking when compared to their white male counterparts: the average tech startup founded by a black woman raises $36,000 in venture funding, while the average failed startup led by a white man raises $1.3 million.

A Growing Demographic

Despite the funding gap, black women are the fastest-growing group of entrepreneurs in the U.S., owning 1.5 million businesses that generate $44 billion annually. This demographic has significant untapped potential, but without access to funding, their businesses are being stifled.

Highly Qualified, Yet Overlooked

The founders involved in Project Diane’s study are highly educated, with 92% holding at least an undergraduate degree and over 60% being alumni of top 20 ranked schools. Despite their impressive credentials, they are still being overlooked by investors. This lack of diversity in the tech and venture capital industries is a major contributor to the funding disparity.

A Call for Change

Kathryn Finney’s plan to mobilize change involves reaching out to city and state governments, organizations, and individuals who have a vested interest in seeing minority-owned businesses thrive. She believes that policy changes and increased grants are essential to enacting real change.

A Cultural Shift

Finney also emphasizes the need for a cultural shift in the tech industry, where diversity is more than just a buzzword. She argues that the industry wants diversity, but often seeks out “black and female versions of themselves,” neglecting the unique experiences and perspectives of underrepresented groups.

Shining a Light on the Issue

The lack of funding for black female-led startups is a pressing issue that requires immediate attention. By shedding light on this disparity, we can work towards creating a more inclusive and equitable tech industry that provides opportunities for all entrepreneurs, regardless of race or gender.