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At the eighth Annual State of Entrepreneurship Address, the Kauffman Foundation launched the “Zero Barriers to Startup” initiative and urged entrepreneurs and policymakers to help break down barriers to new business creation. While the US is becoming more racially diverse, the makeup of entrepreneurs does not reflect the changing demographics.
A similar theme was echoed by this year’s South by Southwest Festival, an annual event in Austin, Texas that brought people from around the globe to meet, learn, and share ideas. Almost every entrepreneur I have met has a personal story with a conviction propelled by the needs of a family member or close friend. Those inspirations are what make the startup world so exciting to watch and to be a part of.
One of my key takeaways was the topic of diversity in tech, and how we must make a conscious effort to seek out people from more diverse backgrounds in the innovation lifecycle, from founders to funders and board members. Here are some of the startling figures cited by Jean Case and Steve Case of the Case Foundation:
- Only 10% of venture-backed companies had a female founder, 1% had an African American founder.
- An overwhelming 78% of all venture capital investment went to companies in Silicon Valley, New York, and Massachusetts.
- 93% of the investing partners at the top 100 venture firms were men.
According to a recent McKinsey study, “companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.”
And diversity matters not just for the bottom line. Having founders from different background and demographics can bring a diversity of thoughts and problem-solving skills. This helps to ensure innovation and economic growth across all communities as our population (and target audience) becomes more of a “melting pot,” and our needs evolve. One good example is Vicki Zhou, Co-founder of WiseBanyan. Her family background enabled her to look at investment through a different lens, and her startup was created with a mission to provide access to financial advice and investment opportunities to everyone.
Be purposeful. Be inclusive.
Speaking of diversity and inclusion. Earlier this month, I wrote a post about the financial health of Americans and where traditional financial institutions and startups could lend a helping hand. It was written partly out of frustration that there are so many Americans (especially the older adults) who need help managing or improving various aspects of their financial lives, but yet, the market seems fixated on “racing to be second.” AARP will be hosting their sixth annual LivePitch event in Mountain View on April 12–13, which aims to shine a spotlight on the innovation activities going on in the space benefitting the 50-plus, a generation that seems to have been left out of the disruption activities in the FinTech world.
Here is a quick list to highlight a handful of startups that I have come across that are doing interesting things for the sandwich and older generations. Some of these will be at the AARP event mentioned above. As with any “lists,” this is not meant to be exhaustive. There are a lot of great entrepreneurs out there doing wonderful things — and every day I keep finding more. So keep up the good work! We need you.
Abaris: B2C online marketplace and resource for income annuity products. They were one of the very few startups looking at innovating the retirement planning space early on. It has been amazing to see how much they have grown under Matt’s leadership. His steadfast conviction and relentless effort in solving the retirement income problem for the older adults is truly inspirational. @myabaris
Earn Up: Loan payment automation that budgets and schedules payments based on monthly income and whenever the customer can afford it. According to the company, a majority of their customer have been able to accelerate their debt repayment. Kudos! @EarnUp
EverSafe: Learning system to protect seniors against fraud, identity theft, and age-related issues by monitoring and alerting on unusual activities. I love that the solution is designed for the entire family, including kids and aging parents. @EverSafeSeniors
Fabric Wealth: Financial life management combining tech and human touch. The founder was caught by (pleasant) surprise when they started getting a lot of older adults signing up for service. Who says 50+ don’t use tech?
Guide Change: Promotes financial independence and helps to prevent fees/losses from fraud and financial exploitation. The Founder, Michael Curran, got the inspiration after participating in a local hackathon in Austin. @Guide_Change
Continue exploring entrepreneurs here.