By Theresa Moore, President/Founder, T-Time Productions
The interconnected nature of social categorizations such as race, class, and gender as they apply to a given individual or group, regarded as creating overlapping and interdependent systems of discrimination or disadvantage. —– Oxford Dictionary
Those of you who have participated in any Diversity, Equity and Inclusion (DEI) work are familiar with the use of the term intersectionality within this arena. It is based on the idea that individuals have numerous aspects of their identities which combine/integrate to make up the whole. As such, despite the narratives others may frame about a person, a person should not be solely defined through one prism/lens.
In 1989, Kimberlé Crewnshaw, a legal scholar and civil rights activist, created the term intersectionality, noting that, for Black women in particular, intersectionality created discrimination that was unique to them in that it was not discrimination resulting from the sum of racism and sexism but rather the exponential combination of the two.
While I often deal with intersectionality in my work in educational environments and settings, I had not really considered it as it applies to my role of entrepreneur/founder of a company and its possible impact as my company looks to secure funding sources to grow and scale our work. I know of various funding networks but do I truly have the same access and interactions within those networks as other founders do based on my race and gender? And if I don’t, who, including me, bears some responsibility for this?
Fortune Magazine noted that, in 2018, U.S. female founders raised $2.88 billion, a figure which represents 2.2% of the $130 billion total in venture capital money invested during the year. This is the exact same percentage the publication reported for 2017. This number is even smaller for Black women entrepreneurs. According to Digital Undivided’s Project Diane 2018 report, since 2009, Black women–led startups have raised $289MM in venture/angel funding, with a significant portion of that raised in 2017. This represents .0006% of the $424.7 billion in total tech venture funding raised since 2009.
Venture capitalists consider many factors when deciding in which companies they will invest. A 2017 article is Entrepreneur Magazine noted that the character of the business partners is one of the most important factors in the decision process – do you have faith in the founder(s)’ abilities and can you trust them with your money? Key to building this trust is getting to know a founder on both a business and personal level which is hard to do if you are not a part of the same networks or have limited exposure/interaction to founders who may not look like you or have similar backgrounds/life experiences.
I recall one of my first interactions with the venture capital network in Rhode Island, a network whose composition mirrors the VC demographic on a national basis, namely white males. Please note that I recognize that my privilege even allowed me access to the network, which is not the case for many Black and/or female entrepreneurs in the state. The person I was introduced to suggested that I attend a monthly meeting of some of his fellow VCs at a local coffee shop. While I appreciated the invitation, I could not help but think that connections that this network was making with my fellow white male founders were most likely not taking place for an hour in a large group setting over a café mocha but on a more consistent, personalized basis at school events with their children, at dinners with mutual friends, at sporting events, at religious institutions and pre-arranged business meetings where they could get to know the founder on both a personal and business level. While not intentional or malicious, this difference in interactions does have a real, tangible impact.
So how do we work to change this pattern in the venture capital world? How do we ensure that more diverse venture capitalists, women and/or people of color, can successfully enter and impact the venture capital industry? Just as importantly, how can we increase the interactions between entrepreneurs from underrepresented demographics and those who have the power and financing to change the trajectories and futures of their companies so that the VCs can truly start to learn more about these founders as both individuals and business creators. Over the next few blog posts, we will explore the issue in more depth with a goal of creating actionable items to help diversify interactions and access in the VC ecosystem.