Little attention has been given to the role of intersectionality in tech entrepreneurship. In fact, a cursory glance of inclusion programs and activities revealed that the majority of the discussion focuses on either women (mostly white) or Black (mostly men) founders, but rarely on those who are both women and Black (or Brown). It seemed Black women Founders, who own a majority of Black businesses and are in the greatest position to have an immediate impact on entrepreneurship and innovation in Black communities, are invisible in the startup world.
So in February 2015, digitalundivided (DID), a social enterprise focused on finding untapped opportunity in underserved markets, launched #ProjectDiane, a proprietary research study, with the goal to disrupt pattern-matching in tech by quantifying black women startup founders. Over 375 Black women led companies were submitted from February -October 2015, either through self submission, submission by an investor, or through DID's review of startups from Crunchbase and AngelList.
In October, we started to analyze the dataset and found some interesting (and, in some cases, shocking) data.
What digitalundivided Uncovered...
We found that Black women are extremely entrepreneurial and lead startups. DID identified 88 U.S. based Black women-led startups and these companies are a part of the fastest growing group of entrepreneurs in the U.S. (over 1.5 million businesses owned by Black women) that generate over $44 billion in yearly revenues (AMEX, 2015).
The #ProjectDiane also showed that Black women Founders are well-educated. Ninety-two percent of the Founders in #ProjectDiane have at least an undergraduate degree. More than 60% of the Founders are alumni of top 20 ranked schools, and 67% of the Founders who raised over $1MM in funding graduated from Ivy League institutions.
On the other hand, digitalundivided also found that a mere 0.2% (statistically, close to zero) of venture deals from 2012-2014 went to Black women Founders. Moreover, these Founders raise $36,000 on average, a paltry amount compared to what the average (mostly white male-led) failed startup raises: a cool $1.3 million.
There are also few Black women in top tech accelerator programs. Only five Founders had graduated from a top accelerator program (Y Combinator, Techstars, 500 Startups). Thirty-four percent of Black women Founders in #Project Diane were a part of an accelerator program at some point in the development of their companies. Those who were in these programs were almost 40% more likely to receive funding (83%) than Founders who had not been involved in an accelerator program (45%).
The study also reinforced various points that have been previously covered in conversations about inclusion, such as how the lack of diversity within tech companies leads to a lack of diversity in startup founders. Nine of the 11 (82%) Founders who raised at least $1 million in outside funding worked for a tech company at some point in their career.
Not Just Statistics
#ProjectDiane delves beyond the numbers and includes data-driven solutions and actionable insights for key stakeholders: foundations with an economic empowerment focus, individuals with a deep connection to diverse communities, and government and civic organizations who serve diverse populations.
Suggested solutions include redefining entrepreneurship, which entails foundations and grant-making bodies to require inclusion of entrepreneurship in their STEM and Economic Development programs; financially supporting programs that produce results, such as providing bonuses and incentives to accelerator programs that produce viable startups led by Black and Latina women; and giving promising black women founders access to capital, which can be done even by non-VC individuals by simply contributing to crowdfunding campaigns for ideas and startups led by Black women.
DID is using the results of #ProjectDiane to develop a series of target initiatives to seize on the opportunities created by this gap. By pairing our cultural literacy with experience in growing startups, DID is focused on developing a pool of amazing companies led by awesome founders (who just happen to be Black and Latina women).
If you're interested in learning more about digitalundivided and/or #ProjectDiane, please contact talk @ digitalundivided.com