A recent article published on NBC New York highlights the challenges faced by startup entrepreneurs who identify as black. According to Crunchbase, black founders of startup companies in the US raised less than half of 1% of all venture dollars allocated in 2023, which is a significant drop from previous years. The decrease in funding can be attributed to various factors, such as higher interest rates making risky investments less attractive. However, despite these challenges, some black entrepreneurs are rising to the occasion and continuing to make strides in their respective fields.
One example is Naza Shelley, the founder of CarpeDM, a dating service app that adds a personal touch with a dedicated human matchmaker. Shelley initially struggled to secure funding for her startup, but eventually received a substantial investment from venture capital fund Elevate Capital. This investment allowed her to invest in marketing, technology, and hiring matchmakers for her app.
Another example is Jason Ray, who started his own wealth management firm called Zenith Wealth Partners in 2019. Ray’s firm aims to address racial and gender-based wealth inequality in investment advice. Many of Zenith Wealth Partners’ clients are interested in investing in early-stage companies to mitigate stock market volatility and potentially increase overall returns. However, Ray emphasizes the importance of understanding the risks associated with investing in startups, as they are often illiquid and may not yield a profit.
Despite the challenges faced by black startup entrepreneurs, there are signs of progress. Elevate Capital plans to launch a new venture fund in the coming months to support diverse entrepreneurs in new regions. Additionally, early-stage investing in businesses led by black people and people of color continues to gain support and investment.
