Although the number of businesses led by Black women in the US has grown faster than any other group since the early 2000s, many business owners face complex obstacles in securing financial investments.
Despite the obstacles of securing funds or finding investors who understand their business models, Black women business owners push through, oftentimes for years, to see their vision come to fruition.
In a new report by Jazmin Goodwin, CNN cited the biennial ProjectDiane review which records the funding Black and Latino women-owned businesses announce publicly. The review states that the number of Black women who have secured over $1 million in investment funding has doubled since 2018.
In 2018, only 34 Black women had reached the million dollar mark in funding, according to ProjectDiane. As of August of this year, that number has grown to 90.
As the summer brought on a global push for an end to systemic oppression and a move by many to support Black-owned business, the growth in funding by these founders may mark an overall shift in the representation in startup funding spaces. Though, the pandemic has presented additional challenges for Black business owners.
“Businesses founded by women of color are in focus now, and specifically those founded by Black women because of the racial reckoning,” Lauren Maillian, CEO of digitalundivided, a nonprofit that supports women of color entrepreneurs, told CNN.
“But we want and we need to make sure that they continue to gain great investment moving forward.”
Between 2014 and 2019, the number of Black women-owned businesses grew 50%, based on an analysis by American Express.
Black women represent about 14% of the female population in the US, but make up 42% of all new women-owned businesses in the same time period.
Such impressive data trends in growth necessitates more representation in securing funding from investors.
Several efforts have been developed and revived as a result of the nation addressing race relations to help Black women business owners who are looking to scale up with the help of investors.
There are online communities, new funds, programs, and alternative funding sources that are seeking to directly get funding to a more diverse group of business owners.
The New Voices Fund was started in 2017 by Sundial’s founder and former CEO Richelieu Dennis to support women of color entrepreneurs. So far, the fund has invested over $60 million in companies like The Honey Pot, Mielle Organics, and The Lip Bar.
Black Girl Ventures is a nonprofit founded in 2016 by Shelly Bell that has supported more than 100 Black women-owned businesses in scaling up their businesses.
In addition to getting money to entrepreneurs, several initiatives including HBCUvc, BLK VC, and All Raise are working to diversify the venture capital decision-making space in a move to bring systemic change to funding Black owned businesses.
“We have a culture of embracing entrepreneurship as Black women and seeing other Black women continue to do it is what really makes the difference,” Maillian told CNN, “And signals to our peers and to future generations, what is truly possible.”
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