Getting funding is not the easiest thing to do for a startup. Diversity challenges in the startup ecosystem notates that it’s even harder to get funded as a minority, much less being Black. Black entrepreneurship is one of the hardest occupations due to these challenges as the startup industry is funded by white men who rarely fund minority owned businesses. Many conversations about diversity seem to have the guise that the problem will fix itself.
Studies show that only 2% of venture capital funding is given to African American men. Black women receive only a small fraction of that funding. In fact, only 11 startups owned by black women have received $1 million in funding. It is evident that getting funding is a common problem for an African American business. Fortunately, there are methods to receive funding as a black business.
Research the VC Field
Finding VCs that fund black businesses is simple. Use sites such as Mattermark or Angelist to find VCs that have funded businesses in the past. If they have a history of funding black businesses, then chances are they can aid you in your goal. We recommend finding angel investors to look into your company. There are investors out there with no strings attached, unlike VCs. Angel Investors will help your company if you are able to show them your worth.
When looking for an investor, try to find out their mission statement. If your startup can go with their mission statement, chances are they will help. Remember that investors are trying to find a great return on investment. Make sure that your company is a profitable one. It must be able to show investors that your business is a profitable one. By doing this, you increase the chance of investors taking interest in your company.
Lead with Numbers
Sometimes telling them your pitch isn’t enough. When speaking to the investors, make sure to speak about the size of the market opportunity. Make it obvious so that traction is not a question. Getting funding is easy. Just make sure to confidently speak about your business! Bootstrap your way to that conversation as much as possible so you have something to show for the hard work you have put in.