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Black Women and the Self Funding Dilemma

This is a part of series of discussions around the release of the #ProjectDianereport, a report on digitalundivided’s proprietary research study about the state of Black women in tech entrepreneurship in the United States. The report will be released on Feb 9th, 2016.

The fact that only 11 startups led by Black women have raised more than $1MM in outside funding is striking for two reasons: (1)In tech, raising at least $1 million is an indicator that a company is at the later stages of seed funding and is moving from proving the market to growth, and (2) The average amount raised industry-wide by startups that ultimately fail is $1.3 million.

The takeaway is that Black women Founders are not raising nearly enough to even test their ideas in the market and even the best Black women led startups (as indicated by the amount raised) do not raise as much as failed startups led by others, namely white men.

Since traditional investment resources for Black women Founders are few, most turn toward self-funding. Self-funding adds significant personal financial risk to Black women Founders who may not have the personal safety net of other Founders. The median net worth of a single Black woman is just $100, and if she is raising minor children, it is zero or less. This is compared to single white women who have a median net worth of $41,000. The average white family had a net worth of $141,900 compared to a median Black household wealth of $11,000.

It’s Easy To Turn Down Venture Funding, When You Have Other Sources of Funding Available To You

Self-funding is less desirable and advantageous than equity-based investments. The benefits of equity-based investments like angel and venture capital extend beyond financial contributions. Investors who provide money in exchange for equity are incentivized to make sure their investments succeed in a way that a credit card company or a business plan competition do not. Venture investors often share their networks with companies they are investing in — thus increasing the Founders’ networks — which can lead to other investments. Also, many venture firms provide non-financial services like marketing, recruitment, and operations assistance to support their Founders. These in-kind services, which save the company money and time, are invaluable to the success of their Founders.

Founders who are forced to use their personal resources do not receive the social capital and business connections that are vital for young, unproven startups to succeed. Founders using personal sources of capital also do not receive the level of scrutiny and critical feedback inherent in the due diligence process. Nor do they receive term sheets, which sets a valuation for their companies.

Discussion: How Do We Get Capital to Investable Startups Led By Black Women?

digitalundivided is Going BIG in 2016

At digitalundivided we have a mantra: Go Big or Go Home

And with 48 companies built, $13 million in investments raised, and 2000 Founders reached — we DID that! 
 
But this type of entrepreneurial success often eludes Black and Latina women Founders. Those whose grit and hustle are unmatched but often go unnoticed. Those with ideas and dreams that are groundbreaking and game changing, but still go unfunded.
 
This is where we come in.
 
We’re all about investing where others won’t. Championing what others don’t. We’re doubling down on opportunities that others consider small bets.
 

We’re not worried about your diversity numbers, we’re solving a new equation: Black and Latina women Founders + their big ideas and high growth companies + our training, networking, and funding = something the startup world has never seen before.
 
So when the tech scene learns what the women in our global community have done, we’re pretty sure their first reaction will be, quite simply: #sheDIDthat
 
…and she DID it BIG!

We’re looking for others who think BIG as well. Who understand optics is nothing without outcomes. That vision and impact go hand in hand.

Because small ideas don’t change the world.

Only BIG ONES…

Closed Mouths Don’t Get Fed Black Women and The Language of the Ask

Imagine going through life being told almost on a daily basis that you won’t get the things you want. Imagine never seeing anyone you know getting the things that they want.

Imagine being hurt or even killed for asking for your most basic rights as an American. The right to the pursuit of happiness. The right to liberty. The right to life.

What happens then? You stop being vulnerable. You stop dreaming.

You stop asking.

It’s a privileged position to think that if you ask someone for something,anything, that you will, in fact, receive it. That you, as a living, breathing human have a right to dream and to believe. As a result, the entire concept of dreaming becomes a radical act.

The language of the “ask” is new to my community of women. From a very early age, we’re told by our parents and our community, verbally and through social cues, to “stop asking.” When we respond to the denial by crying, we’re told, “I’ll give you something to cry about,” a strikingly common statement among our parents.

Our parents tell us this, not because they’re mean people, but as a way to help us protect ourselves, so we can survive a life where denial is the norm. Our parents (and our grandparents and our great grandparents) knew that in their lives wanting and reaching as a person of color, oftentimes led to disappointment.

Greenwood Neighborhood, Tulsa, Oklahoma, 1921. Photo Credit: Oklahoma Historical Society

Greenwood Neighborhood, Tulsa, Oklahoma, 1921. Photo Credit: Oklahoma Historical Society

So they stopped asking, too.

During interviews for our documentary, #RewriteTheCode, I had the opportunity to interview Dr. Christine Darden, a retired NASA rocket scientist and early computer pioneer. Dr. Darden outlined her story about being at the head of her high school class, her love of mathematics, and taking every course she could at Hampton University in early the 1960s.

The logical path for a young college grad of her brilliance was to head to a top STEM school for her Ph.D., but she was directed by her parents (and others) to go into teaching (which she did for several years), which was the logical path for a young black woman of her brilliance in 1960’s America.

There was little to indicate to a black parent, at a time when many black folks couldn’t even eat a sandwich at a lunch counter, that a young black woman could go to a top tech school to get her Ph.D.

In 1953, the year Dr. Darden graduated from high school, there were only three black women in the ENTIRE USA with a Ph.D in mathematics.

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The first black woman to receive a Ph.D in mathematics was in 1942 (Euphemia Lofton Haynes) and it was seven years before the next two black women (Evelyn Boyd Granville and Marjorie Lee Browne) received their Ph.Ds in mathematics in 1949. In fact, Dr. Granville, who received her Ph.D from Yale and won numerous prestigious awards in mathematics, accepted a position at Fisk University, an historically black university, after an application to be a professor at a New York college was rejected because she was a black woman.

Even MIT, the premier tech institution in the world, didn’t graduate their first black woman Ph.D, until 1973 (Shirley Ann Jackson, current president of Rensselaer Polytechnic Institute).

The most you could hope for as a black woman with a Ph.D, with a few exceptions, was to teach math at the high school level or be an instructor, rarely full professor, at an historically black institution. So her parents, wanting to make sure their daughter had a career, guided her toward the only logical path available to a bright, college educated black woman, becoming a math teacher. (Dr. Darden completed her Ph.D. in mechanical engineering at George Washington University in 1983).

It’s very easy for those us who have the privilege of perspective to gasp at the thought of a parent “limiting” a bright young adult like this. However, as I prepare for parenthood myself, especially as a parent to a black child, I understand. Imagine how hard it must have been, the pain and the anguish that these parents went through being forced to limit the dreams of their children in order to ensure their safety. How hard it must have been for these parents, knowing the full brilliance of their children, watch them try and navigate a world in which they could only be spectators, not participants.

Not asking was a form of protection

This is why the #ReWriteTheCode campaign was so revolutionary. Here’s a company, led by a diverse group of women, boldly asking for help. If you come from a community where you’re always welcomed to be a participant, it might be hard to understand the importance of a group of black women raising $60,000 from a over 600 people. But.. for my community using the language of “asking” for something and then… receiving what you asked for…completely disrupts a number of long held beliefs.

As a community, the protective shield our parents/grandparents gave us has hardened into the “strong black woman myth,” that we are so “strong,” and so “capable” that we don’t need to ask for help.

But absence of asking doesn’t mean absence of need.

Like other marginalized groups of people, black women are incredibly self sufficient because we’ve been conditioned to do that in order to survive. It appears that we’re okay because to not be okay is a privilege.

However, “Closed Mouths Don’t Get Fed.

Take a moment and ask yourself, “Where has being mute gotten you?” Yes, you reduced the risk of bruising your ego by self silencing; however, if you’re a member of a marginalized community, your ego is already pretty much shit at this point, so, really, what do you have to lose by asking for what you want?

A few days after the end of our campaign (and before I wrote the post that rattled the tech world), a dear friend asked me how I knew we could raise our Kickstarer goal amount. I told her, “To be perfectly honest, I really didn’t know if we could do it.” However, what I did know was that digitalundivided did great work, built a strong network, had a very persistent CEO trained in the Midwestern charms, and if we could pull it off it would create a path, give permission, for other people to ask for help. (read this about “How to Win at Kickstarter”).

So … I Asked.

And proved that the language of the ask works for everyone, including black women.

As marginalized communities, especially those dealing with intersectionality, we do a disservice to our ancestors by not learning the language of the ask. Every time we shrink ourselves because of someone’s else’s limitations and every time we render ourselves invisible so that someone else’s fragile ego isn’t challenged, we dishonor their legacy.

Learn How to Ask.

You learn the language of the ask by embracing the vulnerability that your parents and their parents and their parents’ parents didn’t have the privilege to embrace.

The language of the ask is directly tied to your ability to be vulnerable, which is not the same as being needy. It means communicating your needs from a place of abundance rather than a place of scarcity. It’s the difference between “Can you loan me money” and “I’m setting up a GoFundMe to raise money for school”. Be active in your solution, don’t expecting someone to solve it for you because you’re too afraid to risk your own vulnerability.

Make your ask global, which means, put what could be an immediate need (“I need $1000 to cover this month’s salary.”), in a larger context (“We’re in the middle of building out our MVP and need $1000 to cover salaries until it’s up and running.”).

People want to help you. It might not be the people you think should help you, but if you’ve remotely practiced the concept of Return on Generosity, I guarantee there’s folks out there who want to help. However, most of us are so focused on our own lives that the only way we know when someone needs help is when they ask.

So, be active in your ask. Put your ask in a global context. And get fed.