CXO

Why VCs need to fund more companies with diverse leaders

At the 2018 Grace Hopper Celebration, Kathryn Finney of digitalundivided described the barriers facing black women in tech, and how VCs can support more diverse startups.

At the 2018 Grace Hopper Celebration, Kathryn Finney of digitalundivided spoke to TechRepublic's Alison DeNisco Rayome, and described the barriers facing black women in tech, and how VCs can support more diverse startups.

Kathryn Finney: Project Diane is digitalundivied's proprietary research initiative. It was started in 2015 as a way to document the number of black women startups that were currently in existence, and, to see and track the amount of funding and the amount of support they were receiving. Since 2016, there's been a pretty significant increase. 2016, there were only approximately 11 black women who raised over $1 million. In 2018, there's currently 34 — and rising —which is really exciting. But still, black women are only receiving approximately .0006%, statistically — zero of the amount of venture funding over the past 10 years. We've been looking and seeing through Project Diane how that's changing, how it's growing, and we've also started to look at Latina women-founders and what challenges and triumphs they're experiencing, in the startup space as well.

SEE: How CXOs can develop a diverse workforce (Tech Pro Research)

My advice for black women founders is to first start. Don't overthink it. Don't over-plan it, but start. Also, access resources. You can use digitalundivided.com. We have a lot of resources online. There's things like Startup Weekend, which are weekends that happen all around the world, led by Techstars, which is one of the big accelerator programs. That's a great place to get started. There's books like The Lean Startup you can use to get started. But the most important thing is to get started.

SEE: Closing the tech gender gap: How women can negotiate a higher salary (TechRepublic)

It's really important for the venture capital world to start to look at diversity, not as a nice charity-based thing, but as a business imperative. By not looking at diverse founders, you are missing diverse funding opportunities. The key to any successful financial portfolio is diversification. But venture capitalists are not doing that. They're investing in the same type of founder. So, for VCs that are looking for ways to diversify, who are looking for new markets and new opportunities, working with diverse founders will give you that. You will see solutions to problems that you didn't even know were a problem. You will see scalable, amazing companies which can give you the return you're looking for. Just take the risk. Take the chance.

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About Alison DeNisco Rayome

Alison DeNisco Rayome is a Staff Writer for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.

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