Being a Black founder comes with a ton of challenges that have prevented startups from scaling and reaching their true potential. Diversity, inclusion and equity problems existed when I started in tech 15 years ago. They persist and might even be worse, especially given recent banking collapses that Black founders like me relied on.
5 Black-Founded Tech Unicorns
- Calendly, a cloud scheduling app
- Marshmallow, an insurtech company
- Esusu Financial, a fintech company
- Chipper Cash, a fintech company
- Flutterwave, a fintech company
Yet we push on and we succeed. My company, SoLo Funds, is the first consumer Black-owned fintech company to reach one million users. That would make it a unicorn based on comparables. Other Black founders have succeeded in building the tech industry definition of unicorn: companies with a valuation of $1 billion or more.
Unfortunately, unicorn status eludes most Black founders. That’s not okay.
I can count on my hands and toes the total of tech unicorns led by Black founders and most are founders from Africa, specifically Nigeria. The main reason for this comes down to funding disparities for African American founders, not to mention unconscious bias, which is just part of the journey.
Whether you go to meetings and they think you’re the intern or you are checking in at the front desk and they look at you as “what are you doing here” versus checking you in, it’s the perception. I’m not blaming anyone. It’s just these individuals aren’t used to to seeing a Black founder walk through their doors that often.
So what should and can you do to prepare to scale, grow and reach unicorn status? Below are challenges to expect, lessons learned along the way and actionable advice that can help close the gap of this persistent problem.
You Have to Build Your Network
Black founders often feel they’re alone on a scary island with no help and no one to turn to. That’s why you need to grow your network and grow from your network. This is probably the most important step to take as a Black founder, especially during the early stages of building your company.
SoLo would not be as successful as it is today had it not been for the incredible networks like New Voices Family and Endeavor, which brings founders together who allowed us to immerse ourselves with those who have accomplished incredible milestones even if they weren’t in the tech or financial industries.
Most of our investors are Black, female or minority-owned VC firms. They believe in us and our mission.
For example, we had the opportunity to spend a ton of time with one of our investors, Richelieu Dennis, who also happens to be a Black pioneer and founder of Essence Ventures, Sundial Brands and Shea Moisture. As a result of this connection and new additions to the team, we got exposure to everything as it relates to scaling a company to stand the test of time. In fact, most of our investors are Black, female or minority-owned VC firms. They believe in us and our mission. That’s important, and something you need to last and make a true difference.
The same goes for Monique Rodriguez from Mielle. We made sure to remember that you are never too good to listen and take advice and guidance from companies that made an impact in a way we hoped to do. Black founders, organizations and investors are everywhere, and we have each other’s backs. It’s up to you to do due diligence and your best to get in the same room as these people. Go to events and join programs like the ones mentioned above. Start somewhere.
Stay Enthusiastic and Overly Optimistic
Resiliency and never giving up is what you’ll need if you hope to overcome discrimination and expand and scale your business. It’s important to remain overly optimistic and enthusiastic about what you’re building and the problem you hope to solve through innovation.
If you want to become a successful founder, be prepared to have doors slammed and overcome hurdles constantly in every aspect of the business. From funding to resources, it’s going to happen. Don’t let these challenges hold you back or prevent you from going forward, learning and growing your company.
Just recently we faced major regulatory adversities that cost the business in more ways than one. It’s biased, for sure. Yet we never gave up because we have a purpose to serve those who need and rely on our platform. And even before these instances we actually had to shut down the business and relaunch because we ran out of money.
It’s important to embrace mistakes and failures. Otherwise, you won’t grow.
Most Black founders create products that help their communities. We created SoLo because we saw firsthand our family and friends struggle to access and grow their capital. Chances are you’re doing the same thing, so keep going and don’t forget the positive impact you’re making even when you want to quit.
Move Someplace Cheaper and Embrace Remote Work
Where you decide to set up your company headquarters can make or break your business. And that’s putting it lightly.
As a founder, regardless of your race you should always be aware of the costs associated with being located in a major tech hub like Silicon Valley or New York City. These are some of the most expensive markets and a lot of businesses don’t end up making it because they are desperately trying to compete in a location that is already supersaturated. I lived in New York City for years before I launched SoLo. My cofounder and I made the decision to move to Los Angeles. And we’ve been successfully running a fully distributed workforce since we opened shop.
It’s important to recognize that places like San Francisco aren’t always a welcoming place for a Black founder to expand and grow a business.
Some of the biggest Black tech companies are in Los Angeles, Atlanta, Nashville, Colorado or Utah because it’s cheaper. Atlanta in particular will help gain you access to some of the best Black investors like Jewel Burks Solomon and Black talent coming out of Spelman and Morehouse. Atlanta’s tech-industry workforce is 27 percent Black versus 2 percent in San Francisco, according to McKinsey data. Make moves that will help you hire and grow your team — after all, you can’t scale without that.
Even with all of the above aspects, it’s important to note that Black Americans are still more likely to start businesses than any other ethnic group. Look to that for encouragement and motivation. Persistence does pay off, so keep going.