Giving Compass' Take:
- Kimberly Weisul explains some of the barriers faced by entrepreneurs of color, and highlights startups that are capitalizing on the opportunity to help build POC-owned businesses while bringing in revenue.
- Why is securing startup capital often more difficult for people of color? How can you help to address the social capital gap?
- Read about supporting social entrepreneurs of color.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Karen Cahn, the founder and CEO of IFundWomen, a four-year-old crowdfunding site for women entrepreneurs, has long known that her customers were predominantly women of color. But those women weren't having the same success raising money on her platform as White women. Through the end of 2019, women of color were the majority of the site's members, but raised only 28 percent of the money. Enough was enough.
In January 2020, IFundWomen's co-founder Olivia Owens spearheaded the launch IFundWomen of Color, an online platform specifically for diverse entrepreneurs, with its own mentoring and programming. For the first year, that support is free. About 2,000 women signed up for the program in 2020, and by the end of the year, women of color were generating fully 70 percent of the money raised on IFundWomen. It's not as if White women were raising less: Overall funding volume on the platform grew 185 percent in 2020. That means that since IFundWomen launched, 51 percent of the money raised has gone to women of color.
That's real progress, and it's no blip. In the last year, a handful of startups have started to see signs of progress in their efforts to level the playing field in entrepreneurship, and to start to chip away at the results of decades of systemic racism, and economic and social injustice.
Crowdfunding in general tends to be more diverse than other forms of funding, and many founders come to it specifically because their existing networks can't support them financially. "If you're not from a wealthy or upper middle-class family, your friends and family will not have the money to back you," says Ken Nguyen, co-founder and CEO of Republic, a crowdfunding site that says about half of its companies have a diverse founder. "Part of what we do is present compelling stories to our community, and have that community act as the friends and family round."
Read the full article about funding women of color by Kimberly Weisul at Inc.