Venture capitalists vowed to address diversity at their portfolio companies by funneling more funding into diversely-owned companies and creating more pathways for Black VCs to enter the space. While there has been some movement, Black investors are still underrepresented across the US and this is affecting how funding decisions get made.
For example, in June Crunchbase pointed out that VC funding in Black businesses has dramatically slowed as investors have pulled back in the last few years.
Venture funding to Black startups was $324 million in the second quarter of this year—a big dip from $850 million-$1.2 billion in prior quarters. This tight-fisted approach can be linked to VCs’ limited network of Black funders (investors rarely invest without a trusted referral) and overall lack of awareness of who’s out there.
Luckily, there are investors making decisions and closing funding rounds that are representative of the Black businesses we know deserve backing. Here are a few Black, Zellennial investors that are making a difference.