Venture investors need to invest in Black-owned businesses

Less than 1% of all venture capital funding in the US is given to Black entrepreneurs. Now is the time for that to change.

  • Abner Mason, CEO and founder of health care startup ConsejoSano, is calling for all venture capital firms in the United States to pledge to invest 13% of their funds in African American businesses.
  • Currently, Black entrepreneurs receive less than 1% of all venture capital funding.
  • The 13% target reflects the percentage of Black Americans and is a nod to the 13th Amendment.

The murder of George Floyd has brought America to a much-needed reckoning on the racism in American society. Young people are marching, white people are reading, and churches are preaching about ways we as people can transform the way we treat Black people. Notably, many business leaders are pledging to end racism. But once the marching ends what will be different in America?

As a Black business leader, this newfound desire to address America's original sin is a breath of fresh air in the midst of this pandemic. But I wonder how long this new zeal to change will last and, more importantly, what practical steps and sacrifices will be made to make the promise to end racism real.

Here is one practical solution that all investors can take to make their promise real. I'm calling on all venture capital firms in the United States to pledge now to invest 13% of their funds in African American businesses. I suggest 13 as a target to both reflect the percentage of Black Americans and a nod to the 13th Amendment. I'm reaching out to friends in the social impact space to help me set up the organization that will monitor this.

Here is one practical solution that all investors can take to make their promise real. I'm calling on all venture capital firms in the United States to pledge now to invest 13% of their funds in African American businesses.

My life reflects both America at its best in terms of ending racism and at its worst.

As an African American CEO of the health care startup ConsejoSano, I've focused on using technology to connect low-income and multi-cultural people to care in our health care system where their needs are often overlooked. Also, I've lived a blessed life. I grew up in an integrated public school in North Carolina where my parents and church taught me never to judge a book by its cover. They taught me that not all white people were motivated by racism and to seek out white allies in my life path.

This advice paid off. I found my way out of NC to a prep school in New England where I was one of seven Black students out of three hundred. I then made my way to Harvard College where Black students were less than five percent of my freshman class of thousands. I faced a choice that most young Black men of my generation made: Will I define myself solely by my race or pretty much ignore my race, ignoring racists, and look for allies? I chose the allies path.

After a short stint in the management consulting field, I found myself working in state government in the MA Department of Transportation where I learned a powerful truth about life—good intentions are not enough. No one cared that we had good intentions to get buses to passengers, we had to get the buses out to waiting passengers. Visible results, not intentions mattered. This lesson speaks to me today when I consider America's response to racism.

I went on to advise three governors and launched a nonprofit to address the AIDS crisis in Africa, helping to created what later would be called the PEPFAR program. What I learned through this entire career path was that I could pretty much sense and ignore racists and seek good white people at every level. These were my survival techniques.

This strategy hit a wall when I entered the venture capital arena launching a health tech company where I was asking wealthy white men to invest in the leadership of a Black man. In the more than 40 pitches I made to create our Series A, I encountered 99% white male investors who were blunt saying they were not investing in my product or projections; they would be investing in me. I could no longer follow my life strategy of ignoring investors with racist views. I was pitching the 1% of the 1% who lived lifestyles and had social worlds completely different from my own. We both could sense the cultural and lifestyle disconnect. Following my pitches I heard comments such as, 'I'm not comfortable with you being in charge,' or 'I'd imagine you being good at sales,' or 'Let's keep you as Chief Evangelist or something like that.'

What became clear to me was that uber-wealthy white men could imagine a Black leader as a minister not as a CEO. In my conversations with other Black startup leaders, I realized I was not alone. Then I looked at the data which confirmed my experience. I found only 1% of venture capital-funded startup founders are Black. Ultimately, I did find investors who believed in me and my product and I was successful in gaining my Series A through white male investors who cared.

Today, I'm no longer a young Black man navigating the corridors of white power, but even as a successful entrepreneur I'm still facing the greatest degree of discrimination I've ever encountered in my life. Corporations posting 'Black Lives Matter' is nice, but as I learned in my job in transportation, the young Black entrepreneurs can no longer praise good intentions. They need results.

If America is serious about the desire to end racism, Black Americans are going to have to follow the lead of Langston Hughes who famously said, "I will not take 'but' for an answer."

Malcolm Gladwell live | How to re-examine everything you know

Join Radiolab's Latif Nasser at 1pm ET on Monday as he chats with Malcolm Gladwell live on Big Think.

Big Think LIVE

Add event to your calendar

AppleGoogleOffice 365OutlookOutlook.comYahoo


Keep reading Show less

To be a great innovator, learn to embrace and thrive in uncertainty

Innovators don't ignore risk; they are just better able to analyze it in uncertain situations.

David McNew/Getty Images
Personal Growth
Madam C.J. Walker, born Sarah Breedlove, was America's first female self-made millionaire.
Keep reading Show less

Study: Private prisons result in more inmates, longer sentences

The Labour Economics study suggests two potential reasons for the increase: corruption and increased capacity.

Politics & Current Affairs
  • After adopting strict sentencing laws in the '80s and '90s, many states have turned to for-profit prisons to handle growing prison populations.
  • A new study in Labour Economics found that privately-run prisons correlate with a rise in incarceration rates and sentence lengths.
  • While evidence is mixed, private prisons do not appear to improve recidivism or cost less than state-run facilities.
  • Keep reading Show less

    Is this the world map of the future?

    A vertical map might better represent a world dominated by China and determined by shipping routes across the iceless Arctic.

    Strange Maps
    • Europe has dominated cartography for so long that its central place on the world map seems normal.
    • However, as the economic centre of gravity shifts east and the climate warms up, tomorrow's map may be very different.
    • Focusing on both China and Arctic shipping lanes, this vertical representation could be the world map of the future.
    Keep reading Show less

    The art of asking the right questions

    What exactly does "questions are the new answers" mean?

    Videos
    • Traditionally, intelligence has been viewed as having all the answers. When it comes to being innovative and forward-thinking, it turns out that being able to ask the right questions is an equally valuable skill.
    • The difference between the right and wrong questions is not simply in the level of difficulty. In this video, geobiologist Hope Jahren, journalist Warren Berger, experimental philosopher Jonathon Keats, and investor Tim Ferriss discuss the power of creativity and the merit in asking naive and even "dumb" questions.
    • "Very often the dumb question that is sitting right there that no one seems to be asking is the smartest question you can ask," Ferriss says, adding that "not only is it the smartest, most incisive, but if you want to ask it and you're reasonably smart, I guarantee you there are other people who want to ask it but are just embarrassed to do so."
    Quantcast