Opinion written by Carolyn Pitt is the Founder and CEO of Productions.com
In 2020, following the murder of George Floyd, many companies doubled down on their corporate social responsibility and the innovation ecosystem followed suit. Some hard-to-break-into venture funds suddenly opened their office hours to Black and brown founders outside of their networks and I took advantage of the opportunity. I went in expecting an open-access conversation and maybe some questions about our business model and/or traction.
But “Why hasn’t anyone else built this business yet?” was not a question I was expecting.
The Inequalities of Black Entrepreneurs
I was taken aback. The investor who asked me this—a white man—was visibly shocked that my pitch had an “incredible business concept” with “solid execution.” But what most surprised him was that I had come up with it. And not the “I” who was a seasoned attorney with years of management consulting experience, who was actively and successfully fundraising. It was the “I” who is a Black woman. Not a male founder and not a white founder.
This, unfortunately, isn’t an isolated experience—particularly for many Black women entrepreneurs. It’s no secret that, across our startup ecosystem, Black women entrepreneurs often face the brunt of inequities that stifle the work we do across multiple levels. Intersectionality means that we encounter biases based on our dual identities as women and people of color. When seeking funding we receive less venture capital and have a tougher time securing loans, and when we do we often receive less financing than we need, or we received it at higher interest rates. This is on top of other barriers, like higher rates of student loan debt and a lack of generational wealth, that add more hurdles to our startup journeys.
Create Better Pathways
Despite all this, in the U.S. Black women are leading innovation country-wide—17 percent are in the process of starting or running new businesses, compared to just 10 percent of white women and 15 percent of white men. We’re the fastest-growing demographic and group of entrepreneurs innovating new solutions across communities—however, barriers remain.
We must create better pathways for Black women entrepreneurs to gain access to capital.
A true and impactful path to lasting support for Black women entrepreneurs is for there to be diverse faces that exist among decision-makers at every level of the innovation ecosystem. And presently, we aren’t meaningfully represented at the top where only 1 percent of Black women are venture capital professionals. It means bringing diversity to the investor pool so that Black women founders see their faces and their lived experiences amongst the people who are writing the checks.
We need Black and brown women throughout government, reviewing grant applications and providing access to other funding opportunities. Even programs erected to directly challenge financial discrimination for underrepresented founders can be inaccessible when the people in charge don’t reflect our communities. When banks prioritize business loans for those with existing lines of credit it limits access. When first-time entrepreneurs navigate lengthy grant applications but lack a robust mentorship community or paid assistance it limits access.
Less Than 1 Percent
I am fortunate to be among the less than 1 percent of Black women founders who have accessed venture investment for my company, Productions.com, and I do not take for granted that many of our investors are people of color and women. Black investors are three times more likely to invest in Black founders and to be intentional about spending time and resources supporting diverse founders and helping them scale their businesses.
We need to unlock the considerable resources available to startups that are out of reach for many Black women founders. Public-private partnerships like Harbor Bank of Maryland’s partnership with Cerebro Capital, a commercial loan marketplace that provides $50 million in loans to small businesses within the Baltimore-Washington metro region, is one such example. The program provides loans as large as $2 million and focuses on increasing access to capital for businesses owned and operated by professionals of color, who traditionally have been underserved by the commercial credit market. Similar programs in other states across the U.S. would be a very welcome addition to the often-barren landscape of funding options.
Innovating at its core is all about reaching communities with limited access and creating solutions for the unsolvable—for everyone. But to do that, Black women need a seat at all tables, from funders to founders, to build an environment where every entrepreneur can thrive equally.
Carolyn Pitt is the founder and CEO of Productions.com, an industry-leading platform that advocates for, and places production, talent of all backgrounds with studios, production companies, music labels, and corporate brands. The company also seeks to level the playing field for underrepresented production talent, including women, professionals of color, veterans, and members of the disabled and LGBTQIA+ communities.