For more than a decade, black women have been starting businesses at a rate that eclipses many of their peers, even as entrepreneurship as a whole in the U.S. is in decline. But despite all the work they’re putting in, black women still face greater hurdles in accessing capital to fund their businesses than other groups.
According to a report from CNBC, one 2018 American Express study showed the number of firms owned by black women grew at a rate of 164 percent between 2007 and 2018—amounting to roughly 2.4 million businesses owned by black women in 2018. But they’re also more likely to report accessing credit as a challenge.
One breakdown of venture capital funding from PitchBook showed U.S.-based businesses with women-only founders get only 2 percent of capital funding—and black women make up just a sliver of that paltry number.
This has created the need for funds that focus exclusively on women and minorities, as well as other organizations that aim to give black women access to education and advisory services, as well as connecting them to investors.
Among those groups are Black Women Talk Tech, Black Girl Ventures, and the $100 million New Voices Fund.
Studies have shown that women and minority business owners consistently are denied loans and pay higher interest rates than their white peers, even when they have similar financial profiles. But Shelly Bell, founder of Black Girl Ventures, stressed that discriminatory banking practices aren’t the only thing keeping black women from building the businesses of their dreams.
“There are banks that are discriminatory,” Bell told CNBC. But when it comes to venture capital, money is exchanged between folks who already have relationships to each other.
“Everything is about who you know,” she said. “If your mom didn’t go to school, or dad didn’t play golf with a founder, or your mom didn’t go to school with someone on the board of a large educational institution, where do you find those connections? One of the things we hope to do is bring those people into one space.”
Organizations like Black Girl Ventures try to connect investors with promising entrepreneurs who have a great business venture—and knowledge of a need in the market—that white venture capitalists haven’t recognized or considered.
Similarly, Black Women Talk Tech (BWTT) is focused on providing black women with the networking, mentoring, and pitch opportunities vital to launching enterprises in the male-dominated tech space. On Thursday, February 27th, BWTT kicks off its 4th annual Roadmap to Billions Conference, an immersive 3-day event at the Penn Plaza Pavilion in New York City that is now known as the largest gathering of black women in the tech space. Since its 2016 launch in 2016, BWTT has grown to include more than 500 scalable businesses and tech companies and 10 chapters of local groups across the country, as well as a London satellite.
“BWTT is the only conference that goes beyond providing meaningful conversations for Black women founders in tech; it’s also where deals are made,” said Esosa Ighodaro, who co-founded BWTT with fellow black female tech founders Lauren Washington and Regina Gwynn, in a press release about the event. “It’s rare to have a space for enterprising women in the tech industry, especially black women, to be able to come together and thrive as a collective. The impact is real, and the accomplishments are ever-growing.”
Addressing the discrepancies faced by black women entrepreneurs has also been the focus of several Democratic lawmakers, including presidential hopeful Senator Elizabeth Warren. Last summer, she announced a plan that would provide business grants to minority business owners to close the startup capital gap.
“Disparity in startup capital is the single biggest reason that promising Black-owned businesses on average are less profitable and bring on fewer employees than white-owned businesses,” she said during the plan’s rollout. Her initiative would earmark $7 billion for funding efforts.
Until the playing field is finally leveled, many black women may continue to feel the sting of having to fight three times as hard just to get their businesses off the ground.
“I can’t tell you how many times I’ve heard, ‘Don’t take it personal,’” Gail Warrior, chief executive of Dallas-based modular construction company Warrior Group, told CNBC. “How am I not supposed to take it personally if I know that if a guy goes in with the same deck, he will have a greater chance at securing the deal?”