Black Founders Are Missing Out On Venture Funding For Diversity Hiring Platforms

The inequities of venture funding are well known, with women receiving 2.3% and Black founders receiving 1.2% of venture dollars. The biases that lead to this unbalanced funding landscape are particularly noticeable when there are founders that hold marginalized identities that are building products in the same space as those with dominant identities, and not getting funded despite their lived experiences. 

A recent example of this was the news of diversity hiring platform, Canvas, raising a $50M venture round. Canvas was founded by two white men who weren’t even looking to raise capital because they had raised $20M a few months prior. Professor Rodney Sampson, Executive Chairman & CEO of Opportunity Hub and General Partner of 100 Black Angels & Allies Fund, shared why he found this fundraise disappointing. “Non-Black founders have not demonstrated that they are capable of building and delivering authentic DEI solutions. Everything we have seen has been a performative knock off or appropriation of authentic racial equity solutions that have been developed by Black people,” he shared. “We need to invest in Black founders that can actually solve the problems that are haunting the technology ecosystem everywhere.”

There is no shortage of talented Black founders that are building platforms to diversify representation and help companies create more equitable hiring and employment practices. Here are just a few such examples.

Jasmine Whaley is the founder and CEO of Black Owned and Hiring, a career planning platform that connects Black talent to job opportunities at companies that value diversity, equity, inclusion and belonging. “As a Black woman navigating corporate America, I understand that all people of color do not share the same experience when applying and interviewing for positions. I also know that many companies want to increase their top-of-funnel with diverse candidates without actually hiring them or putting measures in place to retain them,” she explained. “Our goal is to help talented Black candidates sort through the noise of loud DEI commitments that don’t include internal change.” Whaley has yet to receive venture funding for her business. “I’ve been told that focusing on the Black community is too niche, or I am compared to another Black woman that has raised in this space, implying that only one Black woman can raise money to solve similar issues. And yet I’ve seen many DEI platforms raise millions without diverse teams.”

Jibril Sulaiman is the founder and CEO of Incluzion, a job technology provider that programmatically amplifies the remote roles of companies to BIPOC professionals. As a long-time entrepreneur with a passion for providing economic empowerment for marginalized communities, he sees the diversity hiring space as being collaborative: “I’ve learned that infusing diversity efforts into talent acquisition is a very complex task that involves multiple approaches. I believe as an ecosystem of diversity focused startups, we all can continue to grow to tackle these issues collectively.” He, too, has had a difficult time raising funding. “Outside of a couple of small crowdfunding rounds it has been quite difficult raising investment funds for Incluzion. We have been regularly dismissed by investors because a company in their portfolio also operates in the talent, recruiting or jobs space, without considering what we really do in the context of diversity, remote work and technology.” Sulaiman shared that this fundraising difficulty is not stopping him from continuing to bootstrap Incluzion to profitability and growth. 

Shannon Morales is the CEO and founder of Tribaja, a double-sided talent marketplace and community for underrepresented tech and startup enthusiasts. She is a proud Afro-Latina, first generation graduate, single mother and career changer. Based on her experience as a diversity consultant and recruiter, and having experienced her own workplace biases, she is taking a community-centered approach to building Tribaja. “We understand the work that has to be done to break emotional traumas associated with bad employers. It’s about companies building  a culture that has psychological safety,” she shared. Morales says the fundraising conversations she has had have gone nowhere. “We hear the same things over again: ‘How are you different?’ ‘Diversity isn’t sustainable,’ ‘You are too early.’ Yet companies like ours have raised money with less traction and no diversity on their leadership team. Our revenue and traction speaks for itself and investors should be honest that they only want to invest in founders that look like them.” 

Stella Ashaolu is the CEO and founder of WeSolv, a tech startup dedicated to revolutionizing the traditional model used to source and hire diverse candidates. As an American-born Nigerian woman with an MBA and management consulting experience, she still struggled in the recruitment process without the networks or traditional experiences of her peers. “I saw that when I was able to showcase my skills and talent through real projects or case competitions, companies and recruiters were eager to hire me.  I was the same candidate on paper, but now they could see me beyond their biased lenses,” Ashaolu shared. “WeSolv was born out of the need for underrepresented candidates to have access to those meaningful experiences.” Her fundraising journey was similarly difficult. “Despite my educational and professional background, completing world renowned programs such as Techstars, and building a viable tech platform with paying customers, I was not able to raise a seed round because investors always wanted to ‘see a little bit more’–often more than my white male counterparts.” 

Carolyn Pitt is the CEO and founder of Productions.com, a talent marketplace that helps level the playing field for women and professionals of color who are underrepresented in production industries. “My lived experience as an African-American woman who has worked in fields that are heavily dominated by people who don’t look like me informs my approach to building Productions.com,” she explained, adding that her fundraising journey has been challenging as well. “Incredible founders with market disrupting businesses who fall outside of the traditional archetype have a much more difficult time raising venture, and when we are able to do so it tends to take much longer to close our rounds and we yield more conservative funding amounts. These disparities have little-to-no bearing on the viability of our businesses; instead they are symptomatic of systemic racism and sexism that has a deleterious effect on women founders and founders of color and the innovations that they are working tirelessly to bring to market.”

Michele Heyward is the founder of PositiveHire, a platform that connects Black, Latinx and Indigenous women who are experienced scientists, engineers and technology professionals to management roles. “As a Black woman engineer, I’ve seen companies complain they can’t find diverse talent, when their real issue is retaining that talent,” Michele shared. “The issue isn’t a pipeline problem but the lack of responsibility that management teams have in creating workplaces which will retain and attract Black, Latinx & Indigenous talent.” She shared that investors often assume that PositiveHire is a non-profit because it focuses on women of color. “They don’t see PositiveHire as a scalable solution worthy of investment.”

Arlan Hamilton is the founder and Managing Partner of Backstage Capital, a venture capital seed fund that invests in underrepresented founders, as well as a founder of the recruiting platform, Runner. She is building Runner with community at the core, focusing on supporting hiring for vetted, inclusive startups, and giving “Runners” the opportunity to build the product and share ownership of the company. “As a gay Black woman with lived experience in this space, I didn’t launch Runner for the purpose of diversity recruiting; I launched it to make the job search process better, recognizing that many recruiting platforms are not inclusive,” Hamilton shared. She explained that it’s not just about finding candidates, but also matching them with companies that are focused on inclusion and diversity. While Hamilton is bootstrapping Runner and not planning to take on venture capital, she has between five and ten companies in the Backstage portfolio that are focused on recruiting and retention. She shared that “all of those companies, which are run by people of color and women, haven’t raised a combined total of $50M.” 

All of these founders are focusing not only on building a diverse pool of candidates, but also on ensuring that the companies they work with are creating an inclusive and equitable experience to retain and grow the careers of those employees. And they all have the shared experience of not raising venture funding the way their white male counterparts at Canvas did. 

While the Canvas founders benefited from an inequitable funding ecosystem, they also have the ability to change those inequities. “If they weren’t looking for the capital and their goal is to help with diversity, why not use that $50M to acquire a company that is not led by white men, or put it into a fund that invests in those companies?” Hamilton shared. Sampson agreed, suggesting that “they should be their own client when reviewing their co-founders, C-suite and team.”