What’s the UK Black Tech Pipeline?
When it comes to making venture capital funding more accessible and diverse, the question of pipeline always comes up. And if we take the black ethnic group as an example, one could ask: what’s the number of black-led tech startups you’d expect to get seed funding in the UK annually?
Since less than 1% of incorporated businesses raise a seed round, my napkin maths suggests that we’d expect around 10 black-led startups to get seed funding per year. However, an aspirational number could be as high 30, assuming perfect alignment with demographics.
My numbers are likely wrong and I’d love for someone to share any data or a methodologies that can help pinpoint a range that’s more representative of what’s possible.
My assumptions below are very broad and don’t account for several nuances but I wanted to put something out that could get a discussion going and hopefully people who are better at this than I am can also have a go.
Let me know what you think!
Expected Case
- 670,000 companies founded in UK in 2018/19.
- Around 1.8% of all incorporated companies are tech companies.
- Around 1.7% of all companies have at least 1 director or partner who’s black (13,400).
- That gives 205 tech companies with a black director (670k x 1.7% x 1.8%)
- Around 5% of new tech companies get seed funding.
- That gives 10 black-led tech startups you’d expect to get seed funding in a year.
Aspirational Case
Update 12 June
I did a Twitter poll on this question and got the following results:
