VC Funding For Black Founders Is Down Yet AgainNovember 1, 2022
TechCrunch’s recent bombshell report shows that VC funding for Black entrepreneurs is on a continual downslide.
According to Crunchbase, TechCrunch’s data platform, numbers show that Black founders raised $187 million in Q3, which is a far cry from the $1.1 billion they netted in Q3 2021, and the $594 million in Q2.
TechCrunch’s senior reporter Dominic-Madori Davis wrote that Black founders received a fraction of the $150.9 billion raised in Q3, just 0.12% to be exact.
“Within that, Black women raised 49% of all the capital allocated to Black founders in Q3, according to Crunchbase, pacing the number at around $91.63 million,” Davis wrote. “To grab crumbs, it’s good, at least, to see that Black men and women appeared to receive nearly equal amounts of funding this quarter, even though the number they split is appalling.”
This comes after TechCrunch reported that quarterly funding last year into 2021 was between $850 million and $1.2 billion. In September, it sat at about $324 million.
Although VC funding for Black founders saw an uptick in 2021 following the social justice uprising of 2020, investment in Black women-founded startups still lagged behind. By 2021 Q2, that group had received just 0.34 percent of the total venture capital spent in the U.S. at that point in the year, which was still significantly below other groups’ fundings.
“The hardest part is, honestly, access to the network,” said Joanna Smith, the founder of edtech startup AllHere, recently raised an $8 million Series A in a 2021 CrunchBase interview. “Prior to when I started my company, my frame of reference was teaching 6th and 8th grade math. I had a strong network of customers, but not a strong network in Silicon Valley. And I didn’t have any personal experience as an investor. And I think sometimes access plays a role in a founders’ capability to raise.”
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