Opinion: Minority founders need venture capitalists to break old habits
Black Americans in particular have been severely hampered by representational disparities in corporate and startup America because of historical and current patterns of exclusion. These deeply rooted patterns contribute to the VC and investment community in Chicago being a walled garden that’s hard to penetrate. As Brian Lowery, a professor at the Graduate School of Business at Stanford University who researches racial privilege, said, “Inequality is a function of systems, not individuals within a system.”
In Chicago, hubs like 1871 help break down some barriers, but more can be done.
To be frank, the VC community needs to be more liberal with check-writing and eliminate subjective excuses that limit Black founders. VCs make bets on startups, but they make bets on founders with whom they have a connection. If VCs hired more associates who are Black and Brown and specifically tasked them with identifying Black and Brown startups, that would be progress. As a tech entrepreneur in Chicago, I can recall maybe a handful of VC associates or partners that I’ve pitched who are minorities.
Diversity efforts also can look like supporting groups like the 100 Black Men and Chicago Scholars, both organizations that are preparing the next generation of talent that will power the workforce and portfolios down the road.
VCs could also employ new standards for evaluating investments into Black and Brown startups. For example, they can make an investment in a Black startup that doesn’t have much traction and connect that startup to an accelerator program.
In many ways, technology allows us to break old habits. VCs should break old habits, too.
Funding Black startups is the best way to hire Black tech talent. If you look at our team at SwayBrand, it’s a case study of how I was able to hire talented Black and Brown individuals in tech.
But I’m doing it in Los Angeles. Much like my grandfather, also named Horace, who left east Texas during the Great Migration to find opportunity in Chicago, I relocated to the West Coast. For my grandfather in 1953, Chicago was the place to be.
I represent a digital generation that understands the needs to make similar geographical moves for equitable and financial gains. Like my grandfather, I made a hard decision to leave a city that I’m fiercely loyal to in order to seek more opportunities to advance my tech startup. Why L.A.? The funding community is more liberal about making investments and forming partnerships with Black- and Brown-founded startups. Doors opened up for me in L.A. after only nine months.
Chicago has begun discussions to lay out some frameworks for addressing DEI issues, but I believe we are many investment checks (written) and at least a few “exits” away.
Black founders are on the court and could use some assists. When we score points, so do investors, and so does our beloved city, which wants to see itself as the Silicon Valley of the Midwest. Let’s work to get that ball through the hoop together.
Horace L. Flournoy is the founder of SwayBrand and a mentor to minorities in the tech field.