Yesterday, CNBC reported that data recently released by Crunchbase shows that “Black and Latinx founders still lag behind their peers when it comes to VC investments” with stark figures indicating that Black founders have received just 2.6 percent of VC funding since the start of the year.
This is up from less than 1 percent of funding they had been receiving over the past five years.
We recently caught up with Kathryn Ross, Black Founders Development Program Lead for Accenture Ventures to discuss how Accenture has set out to improve the funding landscape for Black founders.
TNJ.com: What specifically does the Accenture Ventures Open Innovation Team do?
Kathryn Ross: Accenture Ventures was launched in 2015 to make targeted equity investments in emerging technology startups and to match their capabilities with Accenture’s clients’ business needs and priorities. The Open Innovation team is focused on bringing Accenture’s clients together with the best-in-class, enterprise-relevant startups. The goal is to provide them with the ability to co-create, co-innovate, and deliver robust solutions to help our clients reach their full growth potential.
Kathryn Ross: By creating the Black Founders Development Program, Accenture Ventures aims to help Black startup founders and entrepreneurs in the technology sector make a meaningful impact. Our goal is to help them grow their business by providing direct access to venture capital and corporate mentorship. We also want to help them build strategic connections with Accenture employees, partners, and clients.
TNJ.com: As far as you know, what is the biggest barrier to entry when it comes to attaining VC money?
Kathryn Ross: Recent studies have found that Black-owned businesses do not have the same access to venture capital that others do. Specifically, a survey by RateMyInvestor and VC Diversity found that Black founders of companies receive less than 1% of all venture capital funding, which in the U.S. alone, totaled approximately $130 billion.
A Kauffman Foundation analysis of U.S. Census Bureau data found that 28% of Black entrepreneurs’ profits were limited by lack of access to capital, compared to just 10% of white entrepreneurs. These statistics shed light on the inequalities that Black-owned startups face and the barriers they need to hurdle that others do not.
The VC community can also be quite insular, with people doing deals only with those that they know. With our Black Founders Development Program, we’re aiming to facilitate new introductions and open up more doors for Black founders and entrepreneurs.
TNJ.com: Tell me a bit about the Black Founders Development Program.
Kathryn Ross: The Black Founders Development Program is a new Accenture Ventures program designed to invest in and develop Black technology startup founders and entrepreneurs. It is focused on three areas: capital investment, community and thought leadership. In terms of capital, our Black Founders Development Fund will make strategic investments in early-stage, Black-founded and run software startups.
For community, the program will bring clients and other technology partners together to form meaningful networks and relationships that support Black Founders. We created the Black Founders Development Advisory Council made up of diverse, established business leaders and partners to provide mentoring. And finally, we’ll focus on thought leadership – consistently challenging the orthodoxies in VC by conducting and publishing data-driven research to accelerate change in the industry.
TNJ.com: Are there any short to long term goals for these for the program?
Kathryn Ross: Overall, we hope this program will help drive economic inclusion and create new advancement opportunities for Black business owners and leaders. In the short term, we’ll be identifying promising Black founded and run software startups; providing access to Accenture’s technology business and making connections with our clients, partners, and the venture capital community; and investing in those companies that offer differentiated solutions that help to address challenges our clients are facing now, or will face in the future. In the long term, we hope to expand the program globally.