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More deals, less money: the Black founder funding journey

The funding journey for black founders remains challenging, as they still receive less than 1% of venture capital funding in the U.S., even though they secured 1.7 times more deals in 2023 compared to non-black founders. Despite the increase in deals, black founders receive 42% less funding per deal, leading to significant burdens and limiting their business growth potential. To address these inequities, venture capitalists are urged to provide more equitable support and resources, while black founders are encouraged to build networks and adapt their strategies to navigate the funding landscape more effectively.

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More deals, less money: the Black founder funding journey today
How does the funding journey for Black founders compare to non-Black founders? Our research group 323 Black founders 2,193 non-Black founders 2 In 2022, we explored the funding journeys for Black founders and saw that they still receive less than 1% of funds invested in the US—even amidst historic VC levels. One year later, in 2023, we followed the same group to see how their experience compared.
Black founders are receiving 1.7x more deals than their counterparts. That’s good news, right? Unfortunately, not so much. 3 Black Founders (n=323) | Non-Black Founders (n=2193) Average number of total deals 5.63 3.27 All deals 1.7x
“The problem is not getting the funding. The problem is when I get the funding, it's much less. That puts significantly more burden on your life because you're not going to be able to spend on the company or your cost of living at the same quality as your white counterparts.” —Black Founder 4
Black founders receive 42% less funding per deal. Black founders must raise more deals to get the same amount as their counterparts, which impacts business decisions: Copyright © 2023 Accenture. All rights reserved. 5 Black Founders (n=323) | Non-Black Founders (n=2193) Median raised per deal (M) 1.17 2.00 All deals 42% Sacrificing long-term growth for short-term gains Greater need to rely on own revenue to sustain growth Reduced financial resources to hire and retain top talent Less room for error
“The dedicated capital available to Black founders isn't that big. That ends up confining you to what you think is attainable… it puts you in a smaller box.” —Black Founder 6
How can VCs help close the gap? 7 The lack of equitable funding to Black founders from 2016- 2020 resulted in a $67B loss in business opportunities— impacting enterprises and Black generational wealth. Moreover, when innovation is not seeded by diverse sources, everyone misses out. Here’s what the VC ecosystem can do: Support Black founders in early funding stages Help Black founders advance from Series A to late-stage rounds Diversify VC decisionmakers to create more opportunities for Black founders 01 02 03
“Even when Black founders are funded, they're not funded correctly. They're not given the correct valuations, and ultimately it decreases their opportunity of success.” —Black Founder 8
What can Black founders do right now? With less funds available, Black founders cannot wait for institutional change. These actions can help improve their chances of success in today’s environment: 9 01 02 03 04 Build a strong “effective network” of the advisors and investors who value diversity Evaluate investor needs to better position yourself to secure funds and “sell equity” Learn from successful founders how to navigate nuances in pitching, facilitate warm introductions and negotiate better terms with investors Set empowering milestones dependent only on yourself, your team and your product Be authentic and never feel the need to code- switch to appease or play to anyone’s perceptions 05
10 About the Black Founders Development Program Accenture’s Black Founders Development Program aims to level the playing field for Black entrepreneurs through access to venture capital, corporate mentorship, and strategic connections with Accenture’s business partners, clients and people. The initiative is led by Accenture Ventures.