Connect with other founders
Every Black female founder needs a support group to help her navigate the venture-capital landscape, Tiffany Dufu, the founder of the networking app The Cru, said.
Her company raised a $2 million seed round in July 2020, led by Bloomberg Beta and Alpine Meridian.
“One of the most important things you can do is collaborate, communicate, ask for help, and be vulnerable with a group of women who are going through the same thing,” Dufu said. These women “can help hold you accountable but also remind you that you’re not going crazy,” she added.
Joanna Smith, the founder of the educational company AllHere, echoed Dufu’s advice. She joined a support network for Black women in tech, Visible Figures, to discuss topics such as hiring and fundraising.
“Never go it alone,” said Smith, who’s raised a total of $12 million in venture capital since she launched AllHere in 2017. “There’s a community of women who have raised and who are eager to share what worked for them and what didn’t.”
Research and link with prospective investors early
When seeking investors, be sure to research the venture-capital firm, its founder, and the ethos of the company, Smith said. This ensures more than just capital is exchanged in the relationship.
“Capital is the least of what you get from a great partnership with a VC or institutional investor,” she said. “They’re going to be the people you turn to when things are going great and when they are not.”
Edna Martinson follows a similar philosophy. She looks at a firm’s portfolio, the industries it invests in, and how it typically works with founders before pitching them. So far, she’s raised $2.07 million for her learning platform, Boddle.
Meanwhile, Yelitsa Jean-Charles, who’s raised a total of $1.5 million in funds, works only with investors who understand her perspective as an entrepreneur and respect her as a business owner. In 2015, she founded Healthy Root Dolls, a company that hopes to use dolls to teach natural-hair care to young children of color.
“Be mindful of how much time you have,” she said, “and the most valuable way to use it.”
Incubator and accelerator programs can provide funding, but proceed with caution
Tiffany Kelly, the founder of the video-creation platform Curastory said programs such as the 2021 Techstars Sports Accelerator helped her explore fundraising methods and expand her network. What’s more, it helped her raise a $2.1 million pre-seed round in September.
But certain accelerators she attended were led by white men who gave fundraising techniques she had already tried as a Black female founder to no success.
Share of Venture Capitalists by ethnicity,
gender identity, and race
While Martinson gained traction through pitch competitions and accelerator programs, she found it disappointing that women had to constantly use these methods to prove themselves.
“It’s almost like you need that to validate yourself before venture capitalists start looking at you,” she said, “whereas some of your other counterparts are able to go in with an idea and they are able to raise venture-capital funds all of a sudden.”
But remember, the responsibility isn’t all on you
While these women provided advice for maneuvering the venture-capital scene, they stressed that the systemic hindrances and institutional structures within Silicon Valley had to change for any equitable progress to be made.
“You would have to undo a lot of bias,” Jean-Charles said. “Until those people are willing to put themselves in different spaces and look outside what they know, it’s not going to happen.”
Smith said it was imperative for funds to mentor and invest in historically underrepresented founders, as it’s a key way to remain competitive. And within that, Twumasi-Corson, the cofounder of Afrocenchix, wants to see more transparency among backers.
“Investors could make this fairer and increase their returns if they set out clear, transparent success metrics and stuck to them,” she said, “even when the founder doesn’t look like Mark Zuckerberg.”
You would have to undo a lot of bias. Until those people are willing to put themselves in different spaces and look outside what they know, it’s not going to happen.
Van Court, meanwhile, said venture-capital firms should meet specific diversity standards if they planned on receiving public and corporation pension funds. Some venture-capital firms get funding from government grants, as well as private entities such as university endowments and pension funds.
Van Court would also like to see firms implement a policy similar to the NFL’s Rooney Rule, which requires teams with head-coach vacancies to interview people of color for the open position. But even after the murder of Floyd, she said she and many of her peers were still experiencing the same roadblocks many in the sector promised to abandon.
“The proof in the pudding is going to take more than six months or a year to see,” she said. “It’s going to be what happens over the next five years, then what happens over the next 10.”
Source:https://www.businessinsider.in/tech/news/fewer-than-200-black-female-founders-have-ever-received-1-million-in-vc-funding-7-women-who-did-it-share-their-best-fundraising-advice-/articleshow/87569987.cms