Over the past few months, organizations from PepsiCo to PayPal have responded to public demands for meaningful action on racial equality. As protests have swept communities across the country, business leaders are examining the role of ongoing racial disparity in their own organizations. The startup and venture world is facing the same set of questions, and has the same opportunity to create meaningful change.
As a recent graduate of the Stanford Graduate School of Business, newcomer to Silicon Valley, and young Black professional, I set out to explore how Black entrepreneurs experience the startup and venture ecosystem.
The unique challenges Black founders face in their startup journeys are well-documented. From confronting disparities in access to “family and friends” capital that is critical in the earliest stages, to facing unconscious biases in the fundraising process, Black founders confront the effects of racial disparities at every step. These challenges are underpinned by systemic underrepresentation: According to BLCK VC, just 1% of venture-funded startup founders are Black, and over 80% of venture firms have no Black investors.
However, in interviews with Black founders, I found that many have developed a crucial set of skills as a result of their experiences navigating this difficult environment. Persistence, passion, and self-awareness are all abilities that look fundamentally different for these founders because of their experiences with race. By building empathy for the unique experiences of Black founders and by filling gaps in their access to professional networks, we can open the door to greater inclusion in the startup world.
Persistence, grit, hustle, resilience: It goes by many names, but there’s no ignoring that this “it” factor is a must for entrepreneurs. For many Black founders, experiences navigating race have built lifelong persistence.
“I have lived many situations in which I was vastly underestimated. I always had to take the little that I had and position it into strength, even if no one else thought I could do those things,” reflected Helen Adeosun, founder of CareAcademy. This mindset carried Adeosun through an early layoff from a teaching position and fueled her drive to network her way into entrepreneurship from an education-focused background.
For these founders, persistence is core to success. Elise Smith, founder of Praxis Labs, points to the months upon months of bootstrapping Praxis with winnings from pitch competitions as evidence of her unceasing will to keep going. She summed it up: “You know you won’t have the same resources or access, but you have extra fire to figure it out. It’s fueling, in a way.”
Startup founders are expected to have passion: intellectual passion for the industry or idea, passionate energy as part of their leadership style, or even passion for the startup process itself.
For Seke Ballard of Good Tree Capital, his passion stems from a deep-seated duty to give back. Good Tree itself was born from a conversation Ballard had with his father in the wake of the 2015 shooting in a Black church in Charleston, S.C. Ballard discovered a calling to strengthen minority communities by addressing inequities in access to capital. “A synonym for passion could be outrage,” Ballard shared. “How has this inequity persisted for so long? I have a duty to all marginalized people. That feeling of duty informs what I do.”
He wasn’t the only founder to name the role of community as the root of his passion. Sherrell Dorsey, founder of tech publication The Plug, said, “There’s a very different sense of what community means in the context of the barriers our people have faced.” Dorsey’s grandparents, she reflected, raised a family, took on a mortgage, and persisted in long professional careers without even the ability to vote. She concluded, “We really are building from the ground up.”
Harnessing this passion—one driven by responsibility, community, and a strong understanding of history—gives these founders a deep well of motivation to keep building, even when the road gets rough.
For many of the founders I talked to, self-awareness was a product of the fundamental, constant need to relate to others across cultural differences.
Kellee James, founder of Mercaris, has used this adaptability to her advantage throughout her career, building her reputation in economic development and agriculture despite minimal representation of women and minorities in those fields. “I’ve always worked in areas where there are not a lot of Black women, so I’m always aware of myself and how I am perceived. It’s second nature to adjust for that at this point,” she said.
Alex Lofton of Landed described a similar adaptability learned over time: “My own mental model of myself can shift a bit to relate to other people and better story-tell,” he reflected. “I wasn’t doing that intentionally, just out of necessity…But now it’s pretty helpful.” As a cofounder, Lofton has used this combination of self-awareness and empathy as a cornerstone feature of his leadership style: bringing others together, approaching every aspect of the work with curiosity, and continuing to learn about himself as a leader.
The way forward
Just because Black founders may have developed these unique skill sets doesn’t mean that investors and others in the ecosystem easily recognize that fact. Fully translating the depth of Black founders’ skills into greater inclusion in the ecosystem will require greater empathy for entrepreneurs’ experiences. This empathy is an important tool for investors to use in connecting the dots between the stories founders tell about themselves and the skills that equip founders for success.
The ecosystem’s relatively closed nature will also require greater focus on expanding access to contacts, capital, and resources for Black entrepreneurs.
Mercedes Bent, partner at Lightspeed Venture Partners, said having a robust network is crucial. “In my experience, Black and brown founders often have less mutual contacts with our team and founders in our portfolio, and that’s all about the network the founder has,” she reflected. “When founders come in and we’ve been contacted multiple times on their behalf with positive, trusted recommendations, it changes the initial tone of pitch meetings. They start off more jovial and collegiate.”
Building empathy and opening networks are not easy feats. Both are often defined by our immediate communities (such as schools, employers, or neighborhoods), and so our empathy and networks often extend mostly to people who are similar to us.
Still, we are not helpless to enact change; there are a few actions we could all take to stretch our empathy and open our networks. First, we can ask founders how their life experiences have contributed to building the key founder skills, and consider how their answers are similar to or different from our own stories. Second, whenever we meet a founder from an underrepresented group, we can proactively offer to introduce them to others in our network. Third, we can give cold emails a chance. Some of us never respond to cold emails; others never miss a message. Whatever our habits, we should commit to engaging a few extra new faces per week.
The startup world has a major opportunity, a chance to move the needle on the racial disparities that keep many businesses, founders, and investors from reaching their full potential. Start with these small steps and engage in the conversation; there is not a moment to waste.
Erica B. Smith-Goetz is a recent graduate of the Stanford Graduate School of Business.