Black and Latino startup founders receive just 5% of New York’s venture capital funding: Crunchbase report

The Crunchbase data shows similar disparities in the companies those investors choose to back. Black and Latino founders have raised about $15 billion in the past five years, representing just 2.4% of the total venture funding raised by startups in the U.S.

In the San Francisco Bay Area, the only U.S. market larger than New York for venture investment, Black- and Latino-founded companies have received 1.8% of venture capital investment since 2015. 

Venture capital is among many industries promising action against systemic racism following the police killing of George Floyd in May and the worldwide protests that followed.

SoftBank, the world’s largest tech investor, pledged to launch a $100 million fund focused on companies founded by people of color. 

Union Square Ventures, one of the earliest and largest venture companies in New York, published a blog in June that the firm “must confront the uncomfortable reality that we are part of the problem” and pledged to hire more Black investors and back more Black founders.

The National Venture Capital Association trade group launched an effort earlier this year called Venture Forward, which pledged to offer training and resources for an industry that has “systematically excluded women, people of color and other underrepresented minorities.”

Those efforts have not yet shifted the data, however. As of August, Black and Latino founders have raised $2.3 billion this year in the U.S., according to Crunchbase, representing just 2.6% of the $87.3 billion in private capital that companies raised through August. 

Harlem Capital Partners, a VC fund that focuses on providing early stage funding to minorities and female founders, contributed to the report. The firm’s co-founder, Henri Pierre-Jacques, wrote that part of the solution is offering more opportunities to companies in their earliest stage. 

More capital needs to focus, he said, on “funding early stage, diversity-focused funds—as the problem starts with pre-seed and seed—to give diverse founders a chance to gain traction.”

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