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raceAhead: Black Women Company Founders Need Investment

Here are two facts to consider. The first: Black women are starting businesses in record numbers. The second: The median funding raised by all black women founders is $0.

These are some of the findings from a new study from ProjectDiane, the data collection arm of Digitalundivided, a research and acceleration organization which leads high potential black and Latinx women founders through the start-up process.

The 2018 report, which was created in collaboration with JPMorgan Chase, the Case Foundation, and the Ewing Marion Kauffman Foundation, highlights the entrepreneurial energy of black women, and the woeful underinvestment in their potential to move markets. It’s a clear problem for all sectors, particularly technology, says Digitalundivided founder and CEO Kathryn Finney.

“It means [losing] new ideas and new thinking in an ecosystem that still lacks inclusion and diversity,” she says. “But more important than that, women of color CEOs are able to access the kinds of untapped markets that investors are looking for.”

Some highlights from the report:

  • The number of startups founded by black women has more than doubled since 2016. There are 227 startups in the ProjectDiane 2018 database compared to 84 in 2016, a 2.5x increase.
  • The median funding raised by all black women founders is $0. While there is a growing number of black women crossing the million dollar venture threshold, the vast majority of black women-led startups are unable to raise any money.
  • Black women have raised only .0006% of the $424.7 billion in total tech venture funding raised since 2009.

The broader opportunity costs are worth considering.

“A majority of small businesses in the African-American community are founded by black women,” says Finney. Chronic underinvestment hurts everyone. “A sizable percentage of African-American households are headed by black women,” she adds. “So when black women are under-resourced it communities are under-resourced.”

Still, the trend line shows that there are reasons for some optimism.

Since 2009, black women–led startups have raised $289 million in venture or angel funding, much of that in 2017. Better still, some 34 black women raised over a million dollars in outside venture funding in 2017, compared with just 12 in 2015. And investments in entrepreneurial education by HBCUs is helping: More black women founders are graduates of Howard University than Harvard, Stanford, or MIT.

But the average raised by those outside of the million dollar club who are able to get the attention of investors is $42,000 — a 15% increase since 2016, but still not enough. And we know so little about what these founders need to succeed, which compounds their lack of visibility in the financial world.

This is part of what makes ProjectDiane’s work so valuable. They’re developing a unique snapshot into the barriers facing a cohort of entrepreneurs who have been completely ignored, even by academia. Until recently, less than 1% of the Harvard Business School’s influential case studies database — some 10,000 strong — featured a black executive of any gender, even though 9% of U.S. firms are now black-owned.

That, too, is starting to change. A new Harvard Business School class called Black Business Leaders and Entrepreneurship was created by an enterprising senior lecturer named Steve Rogers and uses brand new case studies featuring black protagonists. “We’re showing the true spectrum of the business world,” he said. “We are now righting this wrong and being more inclusive.”

On Point

Birth rates have dropped in zip codes where home values grew the mostThis fascinating analysis from Zillow stops far short of causation, but does raise some interesting questions. First the math: An extra 10 percentage-point rise in home values was associated with an extra 1.5 percentage-point drop in birth rates for 25- to 29-year-old women, with the biggest declines in the West and Northeast. Most experts expected the baby bust that started in 2008 recession would have turned around with the economy. While the study doesn’t explicitly break down the data by race, it’s pretty clear that the financial pressures – lack of family wealth, lower savings – experienced by black and brown people and other marginalized folks – would further exacerbate the problem for professionals of color living in high growth neighborhoods.Zillow

Suicide is now a public health crisis
It’s a complex problem. People of means do have access to treatment and care, and more people are on medications than ever before. But desperation and impulsivity seem to be on the rise, pointing to new waves of despair despite smiling social media presences. Public health experts seem to be ready to concede that what they’re doing is not helping. “I think the increase in demand for the services is so huge that the expansion of treatment thus far is simply insufficient to make a dent in what is a huge social change,” says Dr. Thomas Insel, a former director of the National Institute of Mental Health, now in the private sector. But others worry that it’s simply becoming more acceptable. Either way, there’s no one sector whose job it is to prevent these deaths. “It’s shameful. We would never tolerate that in other areas of public health and medicine,” says Insel.
New York Times

Maybe you should check in with your social media managers
This moving LinkedIn post from Thea Neal, a social media lead for Hallmark, is an important reminder that the abuse that gets heaped on the people who run the social media for brands can leave a mark. The gig is already nearly impossible — another reason to learn what they do — but it’s not just the changing parameters of the job, the relentless need to produce likes and clicks, or the pressure of having to make more magic with fewer staffers. It’s also the toxic nature of online life, with the name-calling, the pranksters, the trolls and the congenitally angry, that drives burn-out and depression. “As a social media manager, we spend our entire days tethered to channels where we are expected to tend to upset individuals, or plain ol’ trolls. We’re basically being groomed for depression, and for some of us, it’s working.” Please read and share.
LinkedIn

Black teens who watch more black-oriented television programming tend to view black women differently
According to a new University of Michigan study, black teens who watch black-themed television shows have a stronger belief that black women as “strong, independent and self-sacrificing,” than those who watch predominantly white or mainstream television. “Given the scarcity of black women on mainstream TV, it is likely that black youth draw from images in black popular culture to inform their beliefs about black women,”said Nkemka Anyiwo, the study’s lead author. Black teens answered a survey that included 29 popular television programs, 17 targeted to mainstream audiences and 12 targeted to a black audience.
University of Michigan

The Woke Leader

Remembering Medgar Evers
Yesterday was the 55th anniversary of the murder of Medgar Evers, the civil rights activist and first state field secretary of the NAACP in Mississippi. Evers was shot to death front of his family, in the driveway of his home in Jackson, Mississippi. His death sparked enough outrage to rally support for legislation that would later become the Civil Rights Act. Although his killer was eventually brought to justice – Ghosts of Mississippi is an imperfect movie about the court drama – below is a wonderful short documentary called Where Medgar Evers Lives Today, created by students who hang at the Medgar Evers Library in Jackson, Mississippi. They are part of a digital-arts program called Spark-O-Matic: Digital Arts Mentoring & Marvelous Mayhem, which is hosted by the library. In the documentary, the students explain how his legacy lives on through them, and share their dreams for a better future. The librarians seem awesome, too. Enjoy.
Vimeo

Tracking the commitment to black men and boys one city at a time
How are the black men and boys faring in your city? You can find out in the now annual Black Male Achievement (BMA) City Index, which has been updated for 2018, and is included in this report, The Promise of Place: Building Beloved Communities for Black Men and Boys. The report was published by the Campaign for Black Male Achievement, an organization which began as an offshoot of the Open Society Initiative in 2008, and is now a standalone organization. Along with the report, they have created a searchable map which shows the scores of 50 U.S. cities that are home to some 30% of all black boys and men in the U.S. The indices they track include city-led initiatives targeting black and brown boys and men, local programs, philanthropic funding, and the presence of CBMA network participants. The report is here, click below for the excellent interactive map.
BMA City Index

Ruby Dee has died
Dee was a ground-breaking actor, who defied racial stereotypes by landing leading roles in films and stage during a seventy year career, and who held her own against luminary performance partners like Denzel Washington, Sidney Poitier, James Earl Jones, and her long-time husband, Ossie Davis. She was also an indefatigable civil rights activist, who stood aside Martin Luther King, Jr. when he had a dream in 1963, and had never failed to raise her voice on issues of equity and equality. Ruby and Ossie’s website is here. Here’s a clip from her Oscar-nominated performance in American Gangster; here Ruby and Ossie talk about the original production of Lorraine Hansberry’s “A Raisin in The Sun.” Ruby Dee was an international treasure, and will be missed.
Washington Post

Quote

If the American people are unable to contend with their elected leaders for the redemption of their own honor and the lives of their own children, we, the blacks, the most rejected of the Western children, can expect very little help at their hands: which, after all, is nothing new. What the Americans do not realize is that a war between brothers, in the same cities, on the same soil, is not a racial war but a civil war. But the American delusion is not only that their brothers all are white but that the whites are all their brothers…If we know, then we must fight for your life as though it were our own—which it is—and render impassable with our bodies the corridor to the gas chamber. For, if they take you in the morning, they will be coming for us that night.
James Baldwin in a letter to Angela Davis