Black founders raised 0.13% of all capital allocated to U.S. startups in Q3, according to Crunchbase. That’s about $39.7 million out of $29.9 billion. This number is a massive year-over-year drop. In Q3 2022, Black founders raised $1 billion out of around $81.7 billion in venture dollars, around 1.2%. Actually, $39.7 million is a massive quarter-over-quarter drop. Just in Q2, Black founders raised $212 million out of $29 billion, and in Q1, they raised $352 million out of $45 billion. There seems to have been an overall dip in venture capital funding this Q3, but, as we’ve covered, funding to Black founders has been consistently declining since 2020.
This isn't a statistical anomaly. It's a manifestation of entrenched racial disparities. Despite the monumental challenges historically thrown their way, Black entrepreneurs have continually demonstrated ingenuity, resilience, and a propensity to foster community growth. Based on my conversations, the plummet from $352 million in Q1 to a meagre $39.7 million in Q3 is not reflective of a dip in the quality or potential of Black-founded ventures but likely a symptom of systemic biases within funding mechanisms.
In 2020, every VC fund was falling over each other to affirm their commitment to investing in Black founders as a step towards rectifying historical economic imbalances. Hundreds of millions of dollars were pledged or promised by everyone from A16z to Softbank.
And I have to ask.
Where are those promises now?
