Venture capital funding has always been scarce for underrepresented groups such as women and people of color. Our team at Crunchbase has been closely monitoring funding trends, trying to identify both moments of progress and setbacks for marginalized entrepreneurs.
In 2021, Black founders reached record levels of funding, but as the market cooled down and DEI initiatives took a backseat, their funding dwindled. On the other hand, women have been receiving consistent levels of funding for the past few years, although it hovers around a small 2%. Interestingly, funding for teams with a mix of genders has been on the rise, suggesting that women founders may receive larger investments when accompanied by a male co-founder.
Stay Up to Date on Funding for Marginalized Communities
Here are the latest stories that you need to know to understand the highs and lows of funding for marginalized communities.
Read about Funding for Black Founders
The lack of funding to Black founders has been an alarming trend since 2021, indicating that investors may have lost interest or shifted their focus away from backing Black-led startups. This is concerning, especially since after the murder of George Floyd, the venture capital and startup ecosystem pledged to better support Black founders. However, it seems that the commitments made have not been followed through. Last year, Crunchbase reported that Black founders in the U.S. only received 0.48% of all venture capital funding, which amounts to a meager $661 million out of $136 billion.
Since 2022, TechCrunch has been speaking with industry experts to explore ways to increase funding for Black founders. Surprisingly, the issue has remained unchanged for over a decade. Black individuals within the ecosystem have been advocating for more opportunities, funding, trust, less bias, and reduced pattern-matching. Unfortunately, none of these have significantly improved thus far.
In 2022, Black founders only managed to raise 1% of all venture capital funding, which was even lower than the 1.3% raised in the record-breaking year of 2021.
Read about Funding for Women Founders
While funding to women founders has remained consistent, or stagnant depending on one’s perspective, there has been an increase in funding for mixed-gender teams. However, solo female founders still face more challenges when it comes to securing investments from venture capitalists.
Similar to Black founders, funding for women last year had its ups and downs, but nothing significant enough to make a noticeable difference for solo women founders.
Read about Funding for Other Marginalized Groups
While Black founders and women often dominate discussions on unequal access to funding, other communities also encounter difficulties when seeking investment. Latino founders also struggle to raise capital, with their funding levels mirroring those of the Black community.
Members of the LGBTQ+ community also face their own unique set of challenges in securing venture capital investments. In an effort to gather data, Crunchbase announced last year that they would begin tracking the amount of funding allocated to LGBTQ+ founders.
Read Commentary on Funding for Marginalized Groups
Experts, investors, and founders alike have shared their thoughts on the funding levels for marginalized groups. We’ve gathered some of the most pertinent perspectives on current controversial matters surrounding the unequal access to funding.
Read the View from Beyond the U.S.
However, the challenges faced by women and people of color are not exclusive to the U.S. Marginalized founders across Europe have also shared their experiences with raising money. Many of them also expressed their aspirations of entering the U.S. market, despite the obstacles faced by minorities in this region.
