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Diversity in Tech Is Still a Problem

Black Lives Matter pledges, are they still relevant?

The modern-day civil rights movement returned into the mainstream earlier this year after cell-phone videos exposed what has been happening for centuries. The unjust murders of George Floyd, Ahmaud Arbery, Breonna Taylor, and other innocent Black lives killed at the hand of police brutality called attention to the individual, systemic, and institutional racism still prevalent in our country. Since May, thousands of peaceful protests have occurred in the streets of American cities, and many companies, institutions, leaders, and individuals have taken vows to end bias, lift Black and minority groups, and commit to being anti-racist through monetary pledges and company-wide inclusion efforts.

The lack of diversity in startups and the venture capital industry is alarming and is a problem we cannot ignore. Underestimated founders (a term coined by Arlan Hamilton) must work 10x harder than their white, male counterparts and still seem to come up short. Black founders lead a mere 1% of VC-backed startups, and 80% of VC funds don’t have a single black investor (source). See the problem?

Our industry needs to do the first step — recognize the issue. A few VCs, investors, and companies committed to funding Black and other minority founders back in June. The catch? Well, since these “pledges,” we’ve seen very few announcements, checks, and wires. Which raises the question: Are these investors following through on their promises? Or was this only to save face?

We’ve seen a few wins for Black-founded companies raising money that deserve recognition and celebration. To name a couple:

You can find even more United States-based VC-backed Black startups here.

But even so, thousands of Black and minority founders keep applying to accelerators and venture funds unsuccessfully. With no luck, they are forced to continue pitching hundreds of times and are still denied access to funding. Not to mention, many underrepresented founders cannot get in contact with investors for a quick conversation. How are they supposed to get in front of VC’s if they can’t even get an initial meeting? I’ve had the opportunity to sit down with some of the Black founders facing these issues.

These entrepreneurs are determined, driven, and energized about their startups and deserve a chance at showing the startup world what they have to offer.

  1. Onyekachi Amadi is building an app FOR Black womxn to thrive in her marketplace, Ebony Crown.
  2. Tiyani Majoko is a South African lawyer who co-founded Anü, an app connecting startups with business professionals.
  3. Allyson Valley, the founder of the virtual therapy platform Soulace for Black people searching for Black therapists.
  4. Kimberly Jolasun, Marie Farmer, Nneoma Ojiaku, MD, MPH all working to help mothers create apps for everything from locating the right OB-GYN for you, to custom pregnancy apps, to virtual baby showers, to mealtime with your kids.

And there are so many more founders out there struggling to get a seat at the VC table. In a recent Bloomberg article titled Black Venture Capitalists Confront Silicon Valley’s Quiet Racism, a former VC said, “Black-led startups don’t gain backing because, in general, they haven’t achieved category-defining successes and are viewed as too much of a risk.” Which leads to my statement:

“There is a reason the white male is a second-time founder. Because he actually got a first chance.” — Janine Sickmeyer

However, we are starting to see some capital funds recognize minority founders. This September, Y Combinator, who provides seed funding for startups, announced the launch of three new directory sections to “better support historically underrepresented founders.” These three new lists are for Black-, Latinx– and womxn-founded companies, aimed at giving these startups exposure to investors who can back them. Y Combinator has also compiled data on each of these groups, including total raised and total valuations, and the figures are impressive. We are likely to see other investors follow Y Combinator’s lead and see more investors taking notice in underrepresented founders.

Because of this, I’m dedicated to being more transparent about my investing as an angel. I created a Notion page to share who, what, and how I’m supporting, and hopefully encourage other angels and investors (no matter the size of checks you write) to disclose their stats so we can all strive for a more transparent and diverse ecosystem.

Investors, share your portfolio diversity stats.

Even the most straightforward pie chart can convey a strong message to other angels and founders looking for a shot. Below you can find the investment breakdown for my angel fund, Let’s Start Up Ventures, and for more information about the companies I invest in, go here. I am proud to be fully committed to investing 100% in underrepresented groups since April 2020.

In addition to a lack of diversity at the cap table and funding, there are problems with the existing technology that is built. We’ve known about diversity issues, biases, and racism in the tech space for a long time. And unfortunately, we are seeing the same patterns: white guys.

Recently, Wells Fargo CEO Charles Scharf said in a memo, “While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from.” But the truth is, the lack of diversity in tech and business is NOT a pipeline problem. Plenty of highly-qualified Black talent is out there, and they are actively seeking and applying for these positions.

Coined by Tiffani Ashley Bell, we can fix this nonexistent pipeline problem with #HireorWire, meaning that businesses should be hiring Black talent, and investors should be wiring money for Black founders. Some of my white friends at software companies ask me where they can start recruiting to find a more diverse pool. For starters, companies and leaders should look into the following resources for hiring Black talent.

  • Diversify Tech — A job board where companies are transparent about their Diversity & Inclusion efforts.
  • People of Color in Tech — A platform connecting people of color with jobs in the tech industry.
  • Frauvis — A company and job board for elevating Black women in tech.
  • Equalithons from Essteemworld — Week-long, remote hackathons dedicated to addressing issues related to gender and racial equality, as well as social and environmental challenges.

If you’re in a position of authority to hire consultants, speakers, or set up programs at your company, book Monique Woodard, Pariss Athena, Brooke Sinclair, or Ayodele Odubela to level up your tech teams.

But if you’re activitely seeking to find people who look, think, and act, just like you, like Brian Armstrong, CEO of Coinbase, stated in his recent article about being a “mission focused” company, then you are part of the problem. In his statement, he declares that his company won’t engage in or support broader societal issues or political causes, which is code for privilege and oppression. Commenter Shayna K. says it perfectly “Imagine being a company that thinks that it can “enable belonging” without engaging with broader societal issues… What you’re saying is that you & your employees (largely white/Asian + male) have the privilege to avoid thinking about the world & rights because it’s “inconvenient” for you.” What’s worse is that tech leaders like Paul Graham applaud this behavior. And that wasn’t even the only bigoted thing that happened in tech this week. Exclusive tech app Clubhouse has taken a quick turn to the dark side as groups on the app have been using the platform for anti-black agendas, leaving listeners in tears as they struggle to find a safe space on the internet.

And what about the companies who are making the technology we live and breathe every day? We need to change racial bias in technology as a whole, but if the people creating these apps and programs have a bias, then the system is already set up for failure from the start. For example, it was recently discovered that Zoom’s face detection algorithm erases Black faces, and even the Twitter cropping algorithm is favoring white people over Black. But this isn’t new. Computer Scientist and Digital Activist Joy Adowaa Buolamwini has been fighting algorithmic bias through MIT Media Lab and shared her research in a 2016 TED Talk that has been viewed over 1.2 million times.

Another instance of bias was pointed out by Del Johnson, a VC, who says that the builders of products are not getting a fair shot at upvotes because of the community harbored at Product Hunt.

This bias could be true for a product’s private and beta communities as well, and it’s a company’s responsibility to fix this early on. Here are a few examples of how to cultivate an anti-racist software culture and technology early on:

  1. Hire Black talent for all roles in your company.
  2. Hire a “tech inclusion expert” to search for bias in your software and make suggestions, just like an accessibility expert.
  3. Create anti-racist communities from the start and make it part of your mission that beta testers, customers, and partnerships will be of diverse backgrounds.
  4. Invite Black people to speak and host events for your company and talk about things other than being Black.
  5. If you’re white, decline press requests, speaking engagements, and panels for more than just diversity and inclusion topics.

But don’t stop there. Not only do tech companies and VCs need to be thinking about anti-racism and diversity, but founders should also be thinking about it too when creating a cap table. This tweet from Kristen Anderson of Catch highlights this thought well by allowing “non-traditional” investors and underrepresented folks to be on the cap table.

The bottom line is that everyone, from leadership, venture capitalists, founders, tech companies, and beyond should be actively anti-racist and clearing the way for Black and other minority founders to excel in the tech industry. To do this, leaders and VCs should be transparent about diversity stats in their funds and businesses and stick to the pledges they made alongside those black boxes they posted on Instagram.

Thank you to Naya Moss, Brooke Sinclair, Kofi Ampadu, for reviewing and editing a draft of this article.

Update 12:21 pm ET: This article was updated to remove the antisemitism discussion about Clubhouse after the moderator of the room discussed the title of the room was not meant to be harmful.

Follow along for more news, thoughts, and advice on startups and angel investing, focusing on the overlooked and underrepresented. Sign up for my newsletter here.



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