The number of Black women who have raised over $1 million in funding has more than doubled since 2018, but receiving funding is still a major challenge for newcomers.
Though Black women are the fastest-growing group of women entrepreneurs in the United States, their ventures get the least amount of funding from potential investors. For years now, their ventures have been significantly underfunded. There are several reasons for this, but despite the challenges, Black women are forging ahead to build their businesses and thrive. Most notably, the number of Black women who have raised more than $1 million in investment has more than doubled since 2018 alone, CNN reports. At a time when the country is grappling with its strained race relations, startup investors must think about how many projects they fund launched by Black women and other women of color.
As per ProjectDiane, a biennial report which displays publicly-announced funding of Black and Latinx women-founded businesses, 34 Black women had raised $1 million or more in outside investments for their businesses in 2018. Two years on, that number has hit 90. The report was compiled by digitalundivided, "a non-profit social startup that leverages data and advocacy to catalyze economic growth for Black and Latinx women entrepreneurs in innovation and technology." The number of Latinx women who received outside funding had also grown rapidly during this period.
Shani Dowell is among the Black women entrepreneurs who raised $1 million or more. However, she shares, it was not an easy path. When pitching her business idea to startup investors, she was often met with a lack of understanding. Her company Possip (short for positive gossip) provides a means for schools to get quick surveys and reactions through text messages from parents ranging from praise for teachers to feedback on bullying and school culture. Often times, she would be pitching to wealthy White men who simply did not understand why such a product was necessary.
"When I originally would go out and pitch Possip to people, especially to typically wealthier men, they sometimes didn't understand the problem, and part of why they potentially didn't see the problem is because they may not have ever had the experience of not feeling entitled and empowered to share their voice or share their opinions," she explained. "Some investors in the education technology space had a jarring disconnect from what was happening at schools and what parents might actually need." Since then, Dowell has been able to raise funding from LaunchTN, a public-private partnership led by a female CEO and funded in part by the State of Tennessee.
Now, Possip has a presence in over 700 schools across 24 states in the country. Dowell's story is only one in a sea of many others. Like her, dozens of other Black women have profitable, groundbreaking ideas that could provide realistic solutions for challenges people face on the ground. Her experience shows us exactly why we need more Black women both in entrepreneurship as well as in investment funding. Dowell is thus part of Founder Gym, an online training program for underrepresented founders including, of course, Black women. The program teaches participants how to raise money to scale their startups and more. She is joined by other startup founders who have also raised $1 million in funding.