Finding funding for a new business venture can be challenging under any circumstances, but underrepresented groups, such as women and people of color, often face additional hurdles. On March 26, the Business and Society lecture series at the Ross School of Business will host a virtual panel discussion on this issue with entrepreneurs and venture capitalists who are working to expand equity.

Michigan Ross Lecturer and Zell Lurie Institute Entrepreneur-in-Residence Rashmi Menon, who will moderate the event, recently answered some questions about barriers to entrepreneurship and how venture capital can become more inclusive.

One critical aspect of entrepreneurship is finding funding; you’ve mentioned that over the past five years, less than 3% of venture capital funding went to Black and Latinx founders. Are there other stats that demonstrate the scope of the problem?

Menon: In 2018, women-founded startups received less than 2% of total venture funding. If you look at women of color, it's actually 0.2%.

Other statistics cover the trillions of dollars under management — everything from VC funds to private equity and other funding. Only about 1.3% of that funding is controlled by firms that are owned by women. And these stats are equally disproportionate when you look at other underrepresented groups.

You’ve pointed out that while finding funding may be the most obvious barrier, there are many others. What are some examples?

Menon: Yes, there's so much more than just funding involved in barriers to entrepreneurship. A recent study on entrepreneurship in Israel found that the No. 1 factor for success of an entrepreneur was the wealth of the founder’s parents. If your parents are more wealthy, you probably went to better schools, you have a better network, you have more access to mentors, you have better access to prestigious career and educational opportunities.

What are some of the broader societal barriers?

Menon: When we look at how entrepreneurs are represented in media and in academic literature, we typically have that image of a cisgender, straight, white man, usually from an upper-middle-class background. Entrepreneurship gets a lot of coverage these days, but who gets the majority of it? Elon Musk, Jeff Bezos, Bill Gates, Mark Zuckerberg.

Read the full article about minority entrepreneurship by Rashmi Menon at University of Michigan.