Underrepresented Communities Are Building Their Own Funding Networks - and Thriving
This story appears in the December 2020 issue of Entrepreneur. Subscribe »
About two years ago, Max Skolnik and Jessica Lynch were at SXSW in a room packed with entrepreneurs of color discussing how to improve access to capital. A woman stood up and said, “You’re talking about adding seats to the table. We don’t want seats. We want a new table.”
Based on what’s happening today, the future of entrepreneurship may be full of many new tables.
Related: Why Not Getting VC Funding Might Be Better for Your Business
To start, there’s Reunion — a company that launched in July and was inspired by the SXSW moment. (It’s cofounded by Lynch and Skolnik, as well as Raymar Hampshire.) The crowdfunding platform is for Black, Latinx, and Indigenous founders, and it works with partners to share webinars and resources to help these entrepreneurs navigate the specific barriers they’re facing. “Race is at the forefront of so many conversations now,” says Lynch, who is Black, as is Hampshire. “What we’re trying to do is say, ‘How do we use the power of community? How do we democratize the space where there’s not been a lot of access?’ ”
Reunion is just one of many new, alternative solutions powered by underrepresented founders, who want to support the entrepreneurs in their own communities. Among them is Latinx Incubator in Chicago and BLCK VC, a nonprofit that aims to increase the number of Black venture investors. There’s also a movement known as #BankBlack. Advocates believe that more Black-owned banks, with larger assets, can circumvent the high rates of rejection founders of color face from traditional financial institutions. Costco and Netflix both announced shifting $25 million of deposits into Black-owned banks this year, and vocal champion Michael Render (a.k.a. rapper Killer Mike) started one called Greenwood with former mayor of Atlanta Andrew Young and TV exec Ryan Glover. A digital bank, Greenwood will give a $10,000 grant each month to a Black or Latinx business.
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Women, another notoriously underfunded group, are doing the same kinds of things. Pam Kostka, CEO of the nonprofit All Raise, which works to boost both female funders and founders, sees more women breaking the old patterns in the VC system — like Mallun Yen, whose Operator Collective brings in female operators as LPs, turning them into investors who can then offer founders deep expertise in building their companies. “We started in the Silicon Valley Me Too moment,” says Kostka of All Raise. “And here’s a new injection this year, which is long overdue for social justice. I think it’s the same thing — a moment that’s turning into a movement. So I do think you see this disruption that is coming in, gathering steam and momentum, and there’s no turning back from it.”
