Why don’t Black Founders take their companies public?
There’s a fairly new trend of “Culture” investing in which notable venture capital firms are cyphering a portion of their funds to invest in black founders and partner with black media figures turned investors. This trend is no where near reaching its peak, in fact its just getting started. Yet this uptick in conversations about lack of capital for black founders will eventually lead to a much more needed conversation. I’ll take this opportunity to be one of the first to say it. I’m over the moon that more and more venture capital firms are taking notice of black founders. The question to pose in the mist of this new movement is, how many of these investments will eventually lead to IPO’s?
True, it is groundbreaking given the historical figures, that black founders and other underrepresented groups are on the radar of venture capital. However, it is more important for VC’s investing in black founders to give adequate support, mentorship, and continued financial backing that is afforded to their peers. With this in mind, the conversations moves to why aren’t black founders given the same support structure that affords room for error, free reign to experiment, make mistakes, and focus on exponential growth? I don’t know about anyone else, but I want to see black startups doing more of series A, series B, series C rounds and eventually move toward IPO.
The venture capital community has been looking for a certain pattern of founders based on what has been successful in the past. Culturally, many black founders may not line up with what Silicon Valley is use to seeing. This isn’t necessarily a bad thing. It just means that those human biases that have become hardwired kick in and its now imperative to get a new set of eyes in the room. A black VC for example, maybe able to pick up on some very promising potential that a non-black VC may totally overlook.
On the other hand, black founders don’t typically experience that reckless abandon that comes with creating a startup. There’s this pressure to make “ends meet” which inevitably stifles creativity. In essence, its not just the VC’s that have to transcend, its also us, the black founders. We ourselves have to commit to playing a much bigger game than we’ve been playing. That means taking the risk, having the courage to ask for more funding, and having the gull to say, “we’re eventually going to go public”. With that being said, I encourage venture capital firms to build a mentorship program into their “culture investment strategy” that encourages black founders to take more risk, think bigger, become growth oriented, and incorporate the word IPO into their vocabulary. I’m confident that we will eventually begin to see some of the fastest growing and profitable companies that the startup world has ever seen.
