Relative to their proportion of the population, much less their influence on popular culture and commerce, African Americans have long been vastly underrepresented among the ranks of venture investors and the founders they fund.
Perhaps worse, those in and around the industry say, the discussion around diversity and inclusion and the urgency of doing something about the venture business’ historic inequities seems to have died down. Venture capital has been one of the primary ways of creating and distributing new wealth in recent years. Successful venture-backed startups can benefit and enrich not just their founders and investors, but their employees, business partners and the communities in which they operate.
Sykes, Lambert and other Black investors and experts chalk up the lack of progress to a number of factors, including economic uncertainty and the broad national pushback against diversity, equity and inclusion efforts by conservative academics, activists and politicians. The numbers were even better at younger and smaller firms. African Americans comprised 8% of the investment professionals that worked at firms that were founded in the previous 10 years and 11% of those working at firms with five or fewer employees, according to Venture Forward.
On the funding side, the number of funding deals raised by Black-founded companies in the U.S. had steadily increased, going from 186 in 2016 to 419 in 2021. And the dollars flowing into such companies jumped too, rising more than seven times between 2016 and 2021.diversity efforts hit a wall When the economy is booming, venture investors are willing to take more risks and to prioritize things like diversity rather than being monomaniacally focused on financial returns, said Mandela SH Dixon, the former CEO of All Raise, an organization that promotes the inclusion of women in the venture industry.