Venture capital financing it was never robust for women or black and brown founders. Along with Crunchbase, we monitor funding levels to identify breakthrough and setback moments for marginalized entrepreneurs.
For example, Black founders saw record amounts of funding in 2021, but that amount dropped significantly as the market cooled and so many DEI (diversity, equity, and inclusion) measures declined. Women, on the other hand, have seen steady funding in recent years — hovering around 2%. Funding for mixed-gender teams, however, has been steadily increasing, suggesting that female founders face greater scrutiny if they bring a male co-founder along for the ride.
Here are all the stories you need to know about the highs and lows of funding for marginalized communities.
Read about funding for Black founders
Funding to Black founders has been in steady decline since 2021, suggesting that investors have either lost interest or are focusing on supporting Black founders. This is a big deal because after the killing of George Floyd, the business and startup ecosystem pledged to better support Black founders. It appears, however, that many of these commitments have fallen by the wayside. Last year, Crunchbase found that Black founders in the US raised 0.48% of all venture dollars raised last year — or about $661 million of the $136 billion.
Starting in 2022, TechCrunch talks to experts to find out what it takes to help boost funding for Black founders. The story hasn’t changed in over a decade, it seems. For years, black people in the ecosystem have been asking for more opportunity, more money, more trust, less prejudice and less standard-setting. None of this seems to be happening yet.
In 2022, Black founders raised just 1% of all venture funding, which, believe it or not, was down from the 1.3% raised in the record year that was 2021.
Read about funding for female founders
Meanwhile, funding for women has remained flat—or stagnant—depending on whether you’re looking at a glass of water half-full or half-empty. The somewhat good news is that funding to mixed-gender groups is increasing. Only individual female founders seem to face more challenges when it comes to raising money from investors.
Funding last year also saw some highs and lows, but nothing dramatic enough to change the needle for solo female founders.
Read about funding other marginalized groups
Black founders and women dominate the conversation when it comes to unequal funding, but in reality, other communities also face challenges when seeking money from investors. Latino founders also face difficulties in raising capital, with funding available to this group often as low as in the black community.
Members of the LGBTQ community also face their own challenges when seeking investment capital. To help gather data, last year Crunchbase announced it would officially begin tracking the amount of venture capital dollars allocated to LGBTQ+ founders.
Read the funding comment
Experts, investors and founders have had many thoughts on funding levels for marginalized groups. We’ve gathered some of the most pressing thoughts on the most controversial topics surrounding today’s unequal access to finance.
Read the view from across the US
But women and people of color don’t just face challenges in the U.S. Marginalized founders across Europe have shared their stories about what it’s like to raise money. Many of them also talked about their dreams of entering the US market, despite the shortages many minorities face here.
