The Curious Case of Black Women and Venture Capital

Black women are one of the fastest-growing groups of entrepreneurs in the United States. And yet, when it comes to raising the capital needed to sustain and scale those businesses? The numbers tell a very different story.

By 2020, fewer than 100 Black female entrepreneurs had raised more than $1 million in venture funding. For context, Black and Latinx founders combined received just 0.64% of VC investment since 2018.

The gap between how fast we build and how little we’re funded creates a compellingly curious case about the relationship between Black women and the venture capital industry.

That gap is exactly what I set out to explore in my doctoral dissertation, Black Female Entrepreneurs and Their Journey to Raising Capital, completed at the USC Rossier School of Education in 2023.

What the Research Asked

The study centered three core questions:

• What knowledge do Black female entrepreneurs have about raising venture capital?
• What motivates them to pursue it?
• How do they navigate the field of venture capital industry?

Using the Knowledge, Motivation, and Organization (KMO) framework developed by Clark and Estes, I interviewed eight Black women who had pitched investors and successfully raised capital. They came from a range of industries — food, haircare, tech, nonprofits, and personal care — and their stories were as layered as the system they were navigating.

What this Matters

This was personal to me as I’ve been a business owner for almost fifteen years. I’ve bootstrapped it from the beginning, pacing myself slowly in terms of growth. In my business, I’ve worked with founders by helping them tell their stories for pitches, speaking engagements, and marketing.

I wanted to hear from those who’d taken the VC route and understand what their journeys entailed. I felt like their voices needed to be heard in a time when we were being talked about and around, but not to.

The TL;DR version of my qualitative study was the following:

What knowledge do Black female entrepreneurs have about raising venture capital?

Most of the women I interviewed started their capital-raising journeys without a full picture of how venture capitalists make investment decisions. Armed with grit and a vision, they knew their businesses were viable, but many of them didn’t know as much about the industry itself (the language, the patterns, the unwritten rules). Accelerator programs and pitch competitions became their classrooms, and experience became their curriculum.

On the converse, when the gatekeepers of billion-dollar industries don’t look like you, don’t know you, and don’t understand the markets you serve, the game felt rigged. Trying to explain to a balding white male about barrettes that survive recess at school, skincare that addresses our different needs, or hair products that cut wash day time in half, felt like an uphill battle.

What motivates them to pursue it?

Financial need was the biggest motivator for pursuing venture capital funding. Bootstrapping has limits, and traditional banks weren’t opening doors. But beyond necessity, these women believed in their ventures and in their ability to pitch. Storytelling plays a key role in pitching, in addition to relationship building, networking, getting in the right room, etc.

And who are we, if not fantastic storytellers? Every participant reported confidence in their ability to deliver an effective pitch. They had done the work to master it and hired people like me to help them. But even with a rock-solid pitch and proven sales data, these founders were often overlooked for young dudebros with no data and a idea.

How do Black women navigate the venture capital industry?

None of them felt sorry for themselves, but were crystal clear about the reality of the game. Many noted a brief surge of interest in Black-owned businesses after the murder of George Floyd in 2020 — and a just-as-swift retreat when it was no longer trending. One participant said it plainly: “I don’t think it’s well-intentioned. I think it’s just something people decided to do after George Floyd was killed.”

How do we stand a fighting chance to scale and exit from our businesses when the infrastructure required to meet those goals don’t exist for us, or as frequently as it does for others?

And for those that do exit, they face the backlash of being seen as a sellout who’s only after money and isn’t down for the culture. How can we win when there’s so much context missing across the board?

She wasn’t included in the study, but Necole Kane of My Happy Flo shares her story and insights here.

Read the Full Study

The recommendations from this small study are clear: increase BFEs’ access to VC networks, provide more financial support before entrepreneurs even enter the venture capital arena, and hold the industry accountable for genuine, measurable commitments to diversity — not just a press release moment.

If you’re a Black female entrepreneur navigating the funding landscape, an investor looking to understand who you’re overlooking, or someone building programs to close equity gaps — this research was written with you in mind.

I break all of the above down, including the historical context that got us here in the literature review. This was by no means exhaustive, but it was my way of giving voice to the experiences of Black women with big dreams, who deserve the dollars needed to achieve them.

The full dissertation is available here.