Disrupting Due Diligence: A Story on How Angel Investors’ Expectations Fail Underrepresented Founders

After the founders pitch, behind closed doors, judges meet to decide which companies win and which lose.

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A black woman sits at a table with ice tea and her computer
Attribution: #WOCinTech Chat

After the founders pitch, behind closed doors, judges meet to decide which companies win and which lose.

The startup selection day was an epic cliche: Of 12 startups I saw present, just one had a female founder and just one other had black founders.

The only two startups my room of judges could easily agree to pass to the next round were both founded by young white men in their mid-20s. Typical.

For the black led-startup, I was all-in; I loved their business model and product, and they had just signed a huge contract with a local restaurant chain with 13 locations.

Other investors started to discuss their merit. One pointed out that they’ve seen the company present before and they have been around for 4 years. I thought 4 years was impressive! Yet to another, she thought something smelled funny. “What’s wrong with them? Something must be amiss if they’ve been around for 4 years and no one has invested in them!”

My eyebrows raised as I was startled to hear this. I said politely, “You cannot hold them to the same expectations as other startups.”

I was gentle as I hinted at her implicit biases. Would she catch my drift?

She was misguided continued pushing with her questions and suppositions. I repeated myself a few more times but it did not work.

My heart was racing. I needed to say something. I grew angry and frustrated to even be witnessing this situation.

“What do you mean” she finally asked?

“You cannot hold them to the same standard because they are five black men. They do not have the same opportunities and connections to get funding. We cannot use the lack of funding as a reason that there must be something amiss. Four years of bootstrapping with their traction is exceptional! They need to be pushed forward.”

“Fine, we can squeeze them in.” They moved onto the next round.

#WOCinTech Chat

Underrepresented Founders, Expectations and Equity

I originally shared this story on June 9th, 2020 on LinkedIn. A very healthy conversation ensued and I’d like to share one particular comment by Liz Brown, former Managing Director of Backstage Philadelphia. She said,

We cannot EXPECT for underrepresented founders to meet the same funding expectations because of institutional racism, prejudice, and bias that are preventing us from having access to funding. Equity is the issue at hand. There are so many companies founded by underrepresented founders that have gone above and beyond the standard of what it means to be “investable.”

Liz Brown, Founder Design Jawn and BCKG

My 15+ year career in the startup and technology industry has not been easy as a woman, and I understand that it would have been exponentially harder if I was a woman-of-color. According to the Society of Women Engineers, only 30% of women who earned bachelor’s degrees in engineering still work in engineering 20 years later.

I beat the odds to get my foot in the door. I’ll keep my foot there to open the door wider for other underrepresented founders, entrepreneurs, and technologists in this industry.

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