Funding Resources for Underrepresented Founders
The social justice movements of the past couple of years have highlighted the difficulty of securing start-up capital as a Black founder.
- 77.1% of VC-backed founders are white (2017)
- only 1% of VC-backed founders are Black (2017)
- 80% of VC firms don’t have a single Black investor (2018)
- Black women raised 0.0006% of all VC funding in the decade 2009–2019
Many VC firms are now pledging to address inequities in the entrepreneurial ecosystem. The good news is, things are changing, in 2021, funding to Black startups more than quadrupled, reaching $1.8 Billion. But it’s too early to tell whether these changes will be sustained.
However, several VCs have expressed a commitment to improving representation. If you’re an entrepreneur looking to bring a business idea to fruition or looking to scale an existing business, this list of VC firms might come in handy.
Backstage Capital
To date, backstage capital has invested $7 Million over 130 different companies led by underrepresented founders. Backstage Capital Founder & Managing Partner Arlan Hamilton says, “We invest in the very best founders who identify as women, People of Color, or LGBTQ. I personally identify as all three”. The firm welcomes applications from exceptional underrepresented founders. Backstage capital currently invests between $25,000 — $100,000 into mostly tech-enabled startups, as well as providing networking and fundraising support.
TL;DR
Funding: $25k — $100K
Criteria:
- any stage
- any industry
- no technical knowledge needed
DiverseCity Ventures
If your business is an impact-based one, this is the place to go for funding. DiverseCity Ventures funds early-stage startups that combine a positive social, economic, or environmental impact, with a high potential for outsized returns. In addition to investing in seed and pre-seed firms, DiverseCity Ventures has a non-profit arm that incubates and supports early-stage startups, with a specific goal of supporting underrepresented founders.
TL;DR
Funding: not specified
Criteria:
- tech-driven company
- impactful business (socially, economically, etc.)
- pre-seed, seed-stage
Fearless Fund
Fearless Fund was founded with the goal of “bridge the gap in venture capital funding for women of color founders building scalable, growth aggressive companies. The firm invests $50k — $500k in early-stage businesses with at least one WOC founder. Fearless Funds also offers a unique Celebrity Equity-Based Endorsement program that connects startups with celebrities who can act as influencers for the businesses in exchange for equity.
TL;DR
Funding: $50k — 500K
Criteria:
- early stage
- at least one co-founder (with significant equity) is a woman of color
- sustainable competitive advantage (e.g. trades secrets, high barrier to entry, disruptive tech)
- established C-Corporation, (or LLC on the path to incorporation)
- scalable
Founders First Capital Partners
If you’re looking to take your profitable small business to the next level, while maintaining control, Founders First Capital Partners might have a solution for you. The organization focuses on providing revenue-based financing, for small business to business (B2B) companies, particularly those with underrepresented founders, or those based in low to middle-income areas. They provide loans anywhere between $50k — $1M, with the potential for additional funding down the line.
TL;DR
Funding: $50k — $1M
Criteria:
- business-to-business (B2B)
- underrepresented founders and/or based in the low-to-middle income area
- impact-oriented business
Harlem Capital Partners
Harlem Capital is an established VC firm in New York, with a bold aim to invest in 1,000 founders from underrepresented backgrounds in the coming 20 years. The firm focuses on investing in women and minority founders. Harlem Capital has invested in over 20 startups, including Moving Analytics, PreShow, and Dexai Robotics. The company makes investments of $500k — $1M in early-stage companies, out of its $44M fund.
TL;DR
Funding: $500K — $1M
Criteria:
- at least one full-time founder
- seed stage
- disruptive and impactful business model
- Large market size ($1B+)
Impact America Fund
Impact America Fund is looking to make sure underrepresented folks have a say in how products and services are designed, who designs them, and who they’re designed for. To maximize impact in this way, they focus on what they call the “inherent impact standard”, this means that they seek businesses whose success is tied to greater impact on the community. One of the ways they maximize impact is through investing in businesses with underrepresented founders with lived experience to bring to the table. They invest anywhere between $250k — $3Million in seed to series B businesses. If your business is growing rapidly and has shown traction in a $1 billion+ market, Impact America Fund might have the funds for you.
TL;DR
Funding: $250k — $3 Million
Criteria:
- Seed to Series B
- demonstrated traction in $1B+ market
- impactful business idea
Kapor Capital
Deeply committed to diversifying the tech industry, Kapor Capital primarily invests in early-stage tech companies focused on “closing gaps of access, opportunity or outcome” for low-income communities and communities of color in the US, with a particular focus on Latinx and Black communities. Kapor Capital particularly seeks to invest in underrepresented founders. They invest anywhere between $25K — $100K, on a business idea that promises to vastly impact underserved communities.
TL;DR
Funding: $25K — $100K
Criteria:
- tech-driven
- early-stage — pre-seed or seed
- focused on closing gaps of access, opportunity, or outcome for low-income communities and communities of color in the US
- committed to building a diverse team consistent with Kapor’s Founder’s Commitment
New Voices
New Voices is committed to making the entrepreneurial sector more inclusive. They offer women of color entrepreneurs access to both expertise and capital to build or scale their businesses. Grants are allotted through pitch competitions that award winners with $5K — $25K cash grants, as well as mentoring and personalized business skill development. The company has invested $1.4 million since its inception; the company has invested over $1.4 million in companies owned by women of color.
TL;DR
Funding: $5k–$25k
Criteria:
- owned by a woman of color
Precursor Ventures
If you’re looking for funds for your first business, with no previous track record to rely on, Precursor Ventures might be the VC firm for you. The firm is willing to, invest in first-time entrepreneurs. The company states, “we are committed to founders who represent a wide variety of backgrounds in terms of gender, race, background, academic experience and life circumstances.” Precursor ventures currently invests between $100k — $250k in a company’s first round, with reserves available for investments in future rounds too. The firm makes 15–20 investments per year on average.
TL;DR
Funding: $100K– $250K (first round)
Criteria:
- early-stage- pre-seed or seed
- tech-driven
