Debunking the Myths of Why VCs Don't Fund Diverse Startups • TechCrunch

Debunking the Myths of Why VCs Don’t Fund Diverse Startups • TechCrunch

people can never land on a word to explain what is happening to women and minorities within the company. Are these founders overlooked or underappreciated? underrated Y underrepresented? marginalized? discriminated? Or just ignored?

The excuses used to justify these nicknames are equally scattered. Women received only 1.9% of all VC funding last year because they are only building beauty and wellness companies; a proven track record is missing; it’s too early, they’re too risky, and there’s a pipeline problem. Maybe he’ll get married, have a family, and leave the business behind.

And the black founders raised 1% of the venture funds because there aren’t enough pitchers; they are a minority of the population and therefore deserve a minority of the funds; Your products and markets tap into something only your community can relate to; there is not enough traction, they are not qualified; or as a Twitter user he wrote, they are not “men, pale and Yale.”

Oh yeah, this explains it all. Women are too emotional to run companies. One founder told TechCrunch that she heard an investor say that she would not invest in a company founded by women because “she was annoying.”

Men, on the other hand, are not annoying. They are competent and qualified and, as we all know, sexism and racial discrimination gone poof after the civil rights movements and third wave feminism. Since then, decisions toward people of color and women have been based purely on verifiable, quantitative facts. Obviously.

“You can’t say you support women in tech without supporting moms.” Suelin Chen, founder

In fact, fact-based due diligence from investors often overlooks the fact that companies founded by women have higher returns than those founded by men. The rest of the data regarding bias in the venture industry is so fuzzy that it’s hard to say much. Without transparency, it’s hard to pinpoint exactly how many people of color and women are launching, making it hard to gauge just how disproportionate the funding really is for these groups. However, there is a way to separate some common misconceptions.

For one thing, women (especially black women) are more likely to start a business than men (and continue to start businesses in ever greater numbers), which means that the idea that there aren’t enough women to invest in it’s just false.

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