Neil here.

Last week, the Japanese investment conglomerate SoftBank announced plans for a $100 million fund dedicated to “companies led by founders and entrepreneurs of color.”

But while SoftBank – and many other organizations and firms – have made strides to diversify our entrepreneurial ecosystem, I believe that there is still a lot more work to be done.

Because the fact is that women and people of color are still vastly underrepresented in both business and funding, shutting potentially lifechanging ideas out of the global innovation landscape.

To me, this points to a responsibility that we all have to intentionally support diverse participation in both entrepreneurship and investing.

This support will not only break down persisting economic barriers, but it will also open the doors to innovators and investors from more diverse backgrounds… which I believe will benefit all of society.

Here are three ways that you can provide this support right now:

  1. Support companies owned by diverse founders

A 2018 report by the Case Foundation indicated that while there are 12.3 million women-owned businesses in the United States, they only generate 4.3% of total business revenue per year. All-women founding teams received only 2.2% of all venture capital funds in 2018, while founding teams with at least one female member received only 12% of the same funds.

The same report indicated that while privately held minority-owned businesses contributed over 1.3 million jobs to the U.S. economy following the Great Recession, only 1% of venture-backed founders are Black, and only 1.8% are Latinx.

Additionally, between 2009 and 2017, businesses led by Black women received only 0.0006% of total tech venture funding available, and businesses led by Latinx women received only 0.32% of the same total.

It’s clear that many high net-worth investors tend to favor a very limited few entrepreneurs… despite the fact that companies led by women and people of color tend to perform better in the long run.

But like so many others, I believe that uplifting and supporting entrepreneurs from all genders, cultures, races, and backgrounds will strengthen our economy, our communities, and our abilities to solve some of our country’s most persistent problems with even more creative solutions.

  1. Build and provide “inspiration capital”

I fully believe that anyone can be an entrepreneur, and anyone can be an investor.

It’s important that we take steps to diversify representation of both entrepreneurs and investors on a wide scale to break down existing myths about who can participate in the entrepreneurial landscape.

The Case Foundation calls this “inspiration capital,” or the idea of “demonstrating to aspiring entrepreneurs, funders, and media that a robust pipeline of diverse entrepreneurs exists in this country.”

On an entrepreneurial front, there are many campaigns that work on initiatives like these, such as #FacesofFounders, and the Case Foundation’s Myth of the Entrepreneur series.

On the investing side, I believe that as more startups choose to embrace crowdfunding as their financing platform of choice, it will further democratize capital and encourage a wider range of people to participate in funding and supporting our country’s next big ideas.

  1. Participate in communities of diverse investors and entrepreneurs

Now, here’s some good news:

If you’re reading this, you’ve already taken a step in the right direction.

Because these types of initiatives are exactly what we’re trying to achieve here. We’re building a community dedicated to breaking down the walls that have traditionally barred diverse entrepreneurial and investment participation, and we’re dedicated to continuing that growth.

And by participating in communities like this, you’ll be able to provide support beyond funding that is essential for young companies to get off the ground… especially for companies owned by founders typically underrepresented in our economy.

At the same time, however, this is an ongoing process, and there are always lessons to be learned… but together, we’re stepping up to the responsibility of supporting innovators and investors from all backgrounds and walks of life.

I’m excited to keep that learning process going far into the future.

Until next time,


Neil Patel

P.S. Make sure you keep up with me on Facebook, Instagram, and Twitter for even more community updates!


Comments

7 responses to “We Support Diverse Founding Teams and Investors”

  1. I have sent emails many times trying to find out why I can’t seem to get access to whom or how to invest(even small $50.00) for startup companies. I understood when I signed up that we can do that, but so far everything I have access to through the site has required me to join monetarily something else. Please advise how I can make this work.

    • Hi Frederick,

      You can access all of Neil’s recommended deals by heading to the deals page on the Angels & Entrepreneurs website. Here’s the link: https://angelsandentrepreneurs.com/deals/. We have plenty of deals available there, with a few more coming down the pipeline soon. I’m sure you’ll find something you like there!

      Cheers!

      Sarah

  2. Thank You Neil for this commentary. I am woman of color and have just found my passion for the business world. This network has fueled understanding for people following their dreams. Dreams have no color they simply are the spirit and drive of that person and their willingness to step out. but we all know that sometimes that person of color is not presented with opportunities that most have. So Thank You for provided the opportunity and platform. So i’m learning and stepping out. Fear is our greatest enemy!

  3. “Because the fact is that women and people of color are still vastly underrepresented in both business and funding, shutting potentially life changing ideas out of the global innovation landscape.”

    Let’s stop bla bla, bla: VCs, PEs, Investors and Investment Banks, how many Black women Entrepreneurs are you planning funding in 2020 and 2022?
    My company is the next UNICORN!!!

  4. Wow. I had no idea that companies ran by women and minorities tend to preform better. In the past when I saw a campaign saying “female founded” or “black founded” I felt like they where touting that fact, trying to get you to buy in. I don’t have anything specific against women or people of color, but I have decided not to invest in some companies, in part because it felt like they where bragging about those facts, and I was worried they might be leaving to much on their gender or race to get funding and not their achievements and abilities. In retrospect, now that I understand the business world better, this probably wasn’t as big a deal as I made it out to be. This just reminds me that thinking critically through due diligence requires me to look past prejudices to truly understand a companies chances of success.

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