The Inclusive Innovation Incubator (In3) sits on the edge of Howard University in Washington, D.C. It’s a coworking space and incubator for Black and under-resourced founders, in a city struggling with a deep racial wealth gap. Yet, like so many Black-owned innovation spaces hubs around the country, it’s struggling to raise the funds to just keep the doors open.
Startup investing has a race problem. Black entrepreneurs receive less than 1% of venture capital dollars in the United States. In the past two decades, only 200 Black and Latinx founders have raised more than a million dollars. In the past few years as the CEO of Village Capital based in Washington, D.C., I’ve watched our nation’s capital become a hub for entrepreneurship and technology. But walk through the halls of the city’s incubators and coworking spaces and you’ll see mostly white faces.
In the past few weeks, we’ve all seen investors and tech leaders talk and tweet about the need to close the race gap in venture capital. In3 is perfectly positioned to close some of these gaps. But as In3’s founder Aaron Saunders explained to me in a recent conversation, talk doesn’t always lead to actual resources.
In a recent blog post, he shared that despite building a 6,000-person mailing list, corporate and foundation funding for In3 has been elusive: “The only institutional support thus far we have received has been from the DC government in addition to our long-standing collaboration with Howard University.”
Aaron gave me some more insight into what this looks like. Hiring part-time contractors instead of full-time staff. Doubling down on duties. Aaron not only leads classes at In3, but also runs their social media, and wipes down tables at the end of the day. “We’re constantly resource-constrained,” he said.
Underestimated and underfunded
This is unfortunately a typical story for so many tech hubs run by and focused on entrepreneurs of color. Last month several Black tech leaders came together to form the Black Innovation Alliance, a coalition of incubators, accelerators, and coworking spaces like I3 that are specifically devoted to leveling the playing field for Black entrepreneurs.
In their manifesto, BIA’s leaders write that tech hubs are a key tool for closing the racial wealth gap because they serve as the “first line of support” for innovators of color. But they also write that these organizations are “chronically under-appreciated, under-supported, underestimated, and underfunded.” They get praise from local institutions, but not resources. Their leaders get invited to speak on panels but get turned down from grant applications.
As I once heard tech journalist Sherrell Dorsey say, “Folks of color and women are often asked to sit at the table and give ideas—to do the emotional labor of identifying what’s wrong with tech culture. But we’re not provided with resources to actually fix things.”
I’m certainly not the only one to say it, but this needs to change. For anyone in tech or VC who cares about closing the racial wealth gap, I’d encourage you to support Black-led entrepreneur support organizations with more than just words.
Here’s how you can do that.
Fund Black tech hubs
In3 has one institutional investor: the city of Washington, D.C. They’ve received little else, beyond in-kind support from institutions like Howard. If you’re reading this, you might be able to support a Black tech hub in your city. So many cities have a local version of Aaron Saunders and the In3. We recently partnered with one institution, Travelers Foundation, to provide $10,000 general operating support grants to tech hubs in several cities focused on lifting up diverse founders.
That partnership is helping WEPOWER in St. Louis, Goodie Nation in Atlanta, MetaBronx in New York, and Black Girl Ventures, the largest pitch program for Black and brown women in the world that operates in 12 cities. Others not affiliated with this partnership are Black Men Talk Tech in Miami and Walker’s Legacy in New Orleans.
You can also support the Black Innovation Alliance directly. They are looking to raise $10 million to build out their capacity and infrastructure. Their vision is to streamline the disparate players providing support for Black and brown founders, so that resources can be deployed more efficiently.
Volunteer your time to mentor
If you’re not in a position to provide monetary support, you can still offer your time as a mentor and connector. Raising venture funding is often about “who you know” as much as what you know. Organizations like In3 play a critical role in building social capital for founders who don’t come from backgrounds of privilege that enable them to raise a “friends and family round.” Mentoring at a local tech hub is one way to help build those networks for diverse founders.
You can mentor at a local hub in your city, or even look online. New Age Capital is a seed-stage venture capital firm investing in Black and Latinx entrepreneurs, and they offer virtual office hours.
If we want to see Black founders succeed, we need to invest in the ecosystems that support them. Aaron Saunders makes an analogy to baseball. Several years ago Major League Baseball invested heavily in the Dominican Republic. They didn’t do it out of charity, Aaron said. They did it because data showed that a high number of successful ballplayers were coming out of that part of the world.
As Rodney Sampson has pointed out, Black-owned, high-growth, venture-backed startups yield 35% more ROI than the average startup. As a tech community, we’re doing ourselves a disservice by not investing in the ecosystems to support them. “To cultivate talent, you need to invest in ecosystems,” Aaron said. “You might not see results in the first one or two years, but you’ll definitely see them long-term.”
Allie Burns is the CEO of Village Capital.