Women have had to do more with less to get their companies off the ground. Startups with female CEOs get 2.7% of all venture funding, compared to 97% of white men. And the stats are even more discouraging for women of color; for example, black women lead less than 1% of the women-led tech startups in the U.S., receive only 0.2% of venture funding, and have funding rounds averaging $36,000. Compare that to white men’s average raise of $1.3 million.
Increasingly women of color are creating their own innovative and creative funding routes and their own networks, circumventing landmines of sexism, sexual harassment, and prejudice when seeking fundraise.
Many of these programs often do double or triple duty by training women on how to properly pitch and awarding funding for their businesses, while also teaching women to how to be investors and set themselves up to serve on boards (Per Catalyst, women of color currently make up 3% of board seats).
Here are some of the ways black women are creating their own funding opportunities.
CROWDFUNDING FOR SOCIAL IMPACT FOR-PROFIT BUSINESSES
Pipeline Angels is training both investors and inventors. The brainchild of Natalia Oberti Noguera, she aspired to change the face of angel investing and challenge stereotypes around women and money. The company started as a reverse market research project–to build a network of women social entrepreneurs in New York City, and it got to over 1,200 members. The goal is, “To do well while doing good.”
Oberti Noguera, a 2005 graduate of Yale with a BA in comparative literature and economics, had an “a-ha moment” that was the impetus for starting the program when she noticed the growing proliferation of for-profit social venture companies like Honest Tea and Tom’s Shoes. The tipping point was hearing a white male VC at a tech conference say that he looks for “Someone like me” when deciding whether to invest in a company.
To provide equal access and opportunity, she created Pipeline Angels as one program for investors and another for founders. Oberti Noguera strategized that it would be easier to get high net worth women who are donating to nonprofits to donate to for-profit social ventures. She believed that it is easier to get this demographic to see the value of these ventures, and consider investing in these ventures, in addition to solely philanthropic causes that they’d normally donate to anyway.
Founders (all women or non-gender conforming people of color) of for-profit social companies pitch to an investor cohort, each investor contributes $5,000, and they decide as a collective which company wins the pitch competition and the funding.
One entrepreneur with successful results is Tanya Van Court, the founder of GoalSetter, formerly iSow. GoalSetter is a platform that gets kids to sign up for goals for holidays, birthdays, and special occasions where gifts are given, save for things that are meaningful while eschewing smaller things, and encourages more mindful purchases. It empowers kids and allows them to use their agency to set a goal and teaches delayed gratification.
Van Court is a veteran in the digital platform space with stints at ESPN, where she launched their digital platform and online video service ESPN3; HBO where she launched HBO Now; and Nickelodeon, where she ran the digital preschool business. She also holds two engineering degrees from Stanford, in addition to her years of expertise, but when it came to raise funds for her business, she consistently came up short.
After one unsuccessful pitch too many, and repeatedly hearing some variation of, “When you have more customers, more press, or more traction,” Van Court decided to focus on funding from female-backed funding sources. Applying to three Pipeline Angels cities, and pitching while seven months pregnant, Van Court raised $200,000 for GoalSetter through the program, on her way to securing a total of $850,000 in funding. The majority of funding has come from women and women of color, with only one white male investor. Van Court says “[Pipeline Angels] is a game-changer, and you wish there were more programs out there, because there are great companies that just don’t have a chance to get off the ground, because of lack of early seed capital that they need. Good, beneficial technology is left on the table.”
LURING INVESTORS WHO UNDERSTAND THE MARKET
The ability to learn, invest, and support women’s ventures in a safe space lures new investors to the tech industry, too. Roshell Rosemond Rinkins, a first-generation Haitian-American and tech industry procurement professional, came to Pipeline Angels with no previous experience and no knowledge of what angel investing entailed. Through working in tech, she was exposed to various founders and opportunities, but didn’t know where to start. Rinkins came to Pipeline Angels with a desire to learn and to help game-changing companies.
Rinkins and her cohort participated in the program’s three learning modules–educational training, mentoring, and practical application. Her cohort funded the innovative feminine products company Saathi, which manufactures a pad that is made of disposable absorbent biodegradable materials. Because Rosemond Rinkins previously worked in procurement at Proctor & Gamble, she was familiar with these products and how they are usually made. “I could grasp the Saathi story and what they were doing, because I was connected to that world, particularly having a mother that was from rural Haiti. I know how transformative these products could be, particularly to impoverished and rural areas in developing and emerging markets.”
The income threshold ($200,000 annually) to become an investor with Pipeline Angels may prohibit many women of color from getting involved. Which is why Pipeline Angel alum, Dr. Rowshawnna Novellus founded EnrichHER, a crowdfunding platform to fund women led businesses. EnrichHER has three components–online courses, live conferences, and the crowdfunding investment platform. According to Novellus “The goal is to have a comprehensive community to increase the funding and success rate of women-led businesses. Women already lead roughly 50% of all crowdfunding campaigns, and it’s a tool women are comfortable using, typically for philanthropic needs, sociopolitical causes, or personal (non-business related) funding needs.”
EnrichHER provides a way to turn that model on its head to help a company get capital, and also help investors make small donations often more aligned with their budget. Because it will be registered to allow for non-accredited investors to participate, one with as little as $100 can invest. This also makes the investor class accessible to women and people of color. To finish and scale EnrichHER, Novellus is seeking funding to complete SEC compliance work, which is a barrier to entry to platforms of this kind.
These programs don’t only provide funding for black women founders. They also offer support, and the opportunity to grow networks. And because the investor class is often looked to for board seats, the more women of color involved in investing the better the chances for improving board diversity numbers, too. According to the Alliance of Board Diversity, the largest source of board diversity is black men and white women, with a prevalence of recycling the same people for board seats. This is effectively erasure for black women, as they fit in neither of those desired “diverse” profiles.
Training women how to effectively pool their resources, bankroll businesses, and make wise, discerning choices will not only transform their individual financial future, those they fund, and corporate boards, but could change the course of the industry, without any influence from the larger established firms.
Bärí A. Williams (@bariawilliams) is head of business operations, North America, at StubHub. She previously served as lead counsel for Facebook and created their supplier diversity program.