Supporting Black Queer Founders
Chasing Rainbows Venture Capital understands that relatability is a cornerstone of deal flow and is quite often the catalyst for action amongst investors. In fact, one of Chasing Rainbow’s primary goals as an investment fund is to increase the pool of investors that Queer founders can “relate” to. As a result we hope to increase the proportion of LGBTQIA+ founders and promote a startup world that more accurately represents the world we actually live in.
However, we simultaneously see that this focus of relatability keeps the rooms where decisions are made explicitly similar to how they have always looked. The majority of fund managers are cisgendered straight white men, so they relate to cisgendered straight white men. Relatability is not in itself problematic, but it can often shine light on bigger ecosystem wide issues. These issues, while diverse in specifics and scope, all revolve around the fact that prioritizing relatability promotes inequality amongst founders and creates obstacles for accurate fund representation. Whether this is due to racism, sexism, or any other systemic form of oppression, historically underrepresented groups in venture capital will continue to be underrepresented if relatability remains as important as it is today.
One of the ugly heads of this relatability monster is the impact it has on Black founders and more specifically Black founders in the LGBTQIA+ community. According to Crunchbase, Black people receive around 2% of all the dollars raised from Venture Capital. Black women receive even less than that with less than 1% of all venture dollars going towards projects with Black women leaders.
After the racial and cultural reckoning that occurred in the summer of 2020 following the murder of George Floyd and Brianna Taylor, funds such as Google Ventures made hefty promises. Their words seemed promising, and in 2021 there were record numbers of investments made into Black founded companies. However, as 2022 continued and the volume of these investments dropped, and Black Founders saw a disproportionate decrease in funding opportunities. According to Crunchbase Black founders saw a 20% steeper decrease in financing opportunities than the general population. While startling in its own right, when contextualised it is seen that this is the largest single year drop in the past decade.
While this news may seem discouraging, there are still so many ways that you, your fund, or startup can help rectify these issues and help uplift Black Founders. Hiring more diverse teams, partnering with firms that center Black founders, and understanding intersectional identities can all help support Black founders and promote equity within the venture capital ecosystem.
Founding teams often skew toward homogeneity which only impedes progress for both the startup and the ecosystem at large. People with different backgrounds bring different perspectives and can as a result see potential problems in a new light. While this may seem fundamental, diversity amongst founding teams still does not reflect society correctly, so the sentiment should not only still be shared but repeated until founding teams do reflect the world we live in.
Additionally, while traditional funds continue to fail these communities, new funds have emerged to meet the needs of Black Founders. Like Chasing Rainbows does for LGBTQIA+ founders, these funds such as Backstage Capital, Authentic Ventures, and Blackstar Capital continually demonstrate that minority founders will go twice as far with the same opportunity.
As we reflect on Black History Month, Chasing Rainbow Venture Capital is seeking to support and build our relationship with these funds. This is not only because of our deep commitment to making the ecosystem more equitable, but also because we understand that our communities are not mutually exclusive.
While Queer founders, Black founders, and Women founders all face unique struggles, founders with intersectional identities, or identities that overlap, often face the worst, most severe forms of oppression and have the hardest time securing that elusive trait of relatability.