previous Goldman Sachs Top executive Ayesha Ofori believed investors would be keen to fund her investment platform startup, only to be rebuffed.
Some venture capitalists who give Ofori the cold shoulder Women-centric financial investment platform PropelleShe was eventually rejected due to her lack of experience. Ofori cited her background at Morgan Stanley, Goldman Sachs and her MBA from London Business School.
“Fundraising is very difficult,” Ofori told CNBC. “I try not to think about it because it can bring you down…like your gender and your skin color are the reasons why you’re not progressing as fast as other people.”
Ofori is one of the few black founders in the UK to eventually secure funding for his business. However, according to data, black founders received only 0.23% of venture capital funds in 2018. Expand venture capital. Since then, minority groups have barely increased their market share.
In 2021, investment levels in the UK technology industry hit a record high, exceeding US$40 billion. black lives matter movement. According to data from Extend Ventures, the value of investments represented by the group has fallen to 0.95% by 2023.
Ayesha Ofori, founder and CEO of Propelle.
propele
Ofori was convinced that she “satisfied the requirements of a venture capital firm in a founder.”
“Through the grapevine, I talked to people personally, and I was told that some black women got opportunities. They did raise VC money. It failed, and it went poorly, so some of those specific VCs The company is not ready to take our risk anymore,” Ofori explained.
Just 13 black women raised venture capital between 2019 and 2023, compared with more than 3,700 white men, according to Extend Ventures.
Like other black founders in the UK, Ofori hopes to reverse the decline in funding by targeting high-profile investors and taking a more community-focused approach, including support from family and friends.
A battle for funds
CNBC spoke with several founders and venture capitalists who noted that Black business leaders often face systemic challenges, from racial stereotypes to an overall lack of diversity in the industry.
Sarah Wernér, who co-founded property management company Husmus with her Swedish husband, Mattias Wernér, said some venture capital firms adhere to quotas and remove black founders once they meet a threshold. will reject them. Werner said other venture capital firms pit black founders against each other for the limited funding allotted to them.
“You’re pitting people who are already struggling against each other… and pitting black people against each other to fight for a space in your portfolio that’s allocated to people of color is ridiculous,” she said.
Werner, who calls herself the spokesperson for Husmus, told CNBC that her common-sounding name often opens doors for her because people don’t immediately recognize her skin color. She also said using her white husband’s email address allowed her to meet with high-profile investors.
Karl Lokko, founder and managing partner of Black Seed, a venture capital fund for black-led startups, told CNBC that there needs to be more diversity in leadership at venture capital firms to overcome these biases.
“If the IC (Investment Committee) reflects more diverse perspectives, then proposals that are being evaluated and decided upon can be more fully considered,” Rocco said. “So, yes, more diversity, but more diversity is actually in the ocean of decision-making, in terms of the allocation of funding.”
friends and family
At the end of October, thousands of students, venture capitalists, CEOs, and diversity, equity, and inclusion (DEI) experts descended on North London for the fifth annual Black Tech Fest—a festival hosted by former Googlers Ashleigh Ainsley and Silicon Valley technology executive Dion MacKenzie.
A recurring theme at this year’s Black Tech Festival was the lack of available data on the proportion of funding and support that minority founders receive. MacKenzie described Europe as a “data desert”.
In response to the lack of data and representation in the industry, McKenzie and Ainsley founded Colorintech to build a new community for people of color. Since its launch, underrepresented founders in the program have raised more than $50 million in funding and the community has grown to more than 60,000 people, they said.
“We want to bring attention to it and provide a platform for people who are underrepresented in the industry,” McKenzie said.
They work with some of the biggest names in the industry, such as Facebook owners YuanGoogle, PwC and JP Morgan.
Google also supports Propelle’s Ofori and Husmus’ Wernér, providing funding through Google Startup Black Founders Fund. Ofori, who received an initial investment of $100,000, said entering Google for Startups was the “catalyst” that started the money flowing in.
Even as people who had previously rejected her became interested, Ofori decided to focus on leveraging her community and connections to move forward.
Black Technology Festival 2024
BTF by Colorintech
She also reached out to some of her former colleagues at Goldman Sachs and attracted high-profile investors, including female entrepreneurs, to join. One of Propelle’s investors is former Goldman Sachs partner Stefan Bollinger, now CEO of Swiss bank Julius Baer.
Werner calls this support a “friends and family” round — an early form of fundraising in which founders ask friends and family to invest in their ventures. She said her first check came from a university friend who gave her £10,000, which encouraged her to reach out to other acquaintances.
“These people know you. You fight alongside them. You stay up late with them in the library. They know you, they trust you, and they pay you out of their pockets to tell the truth. There’s nothing more humbling than that. ,” she told CNBC.
A world away from America
Diversity and inclusion programs surge in 2020 when murders happen george floyd Colorintech’s McKenzie and Ainsley said the failure, which led to protests and racial unrest and did not inspire long-term investment in black communities, hurt the tech industry.
If we think about the whole concept of developing the UK and making itself a more productive country, we can’t do that by widening the productivity gap between certain social groups, especially when those social groups… .. Maybe a minority, but they’re not insignificant.
Ashley Ainsley
color technology
McKenzie said a more diverse workforce can lead to “better products, better teams, and ultimately more revenue,” adding that more inclusive employers enable companies to gain ” The best talents”.
“If we think about the whole concept of developing the UK and making ourselves a more productive country, we can’t do that by widening the productivity gap between specific social groups,” Ainsley said. He stressed, Although these social groups may be minorities, they are not “insignificant.”
Four years after the Black Lives Matter moment, perceptions of diversity efforts have changed. Several companies include McDonald’s, Google, Ford, Lowe’s and Walmart have Scale back U.S. diversity efforts For various reasons ranging from cost cutting to political pressure. Donald Trump’s incoming White House administration has raised concerns about the future of DEI, given the president-elect’s proposed elimination of federally funded diversity programs.
Ashleigh Ainsley (former Google employee) and Dion McKenzie (Silicon Valley technology executive)
BTF by Colorintech
In the UK, the Labor Party promised before the election that by introducing racial equality act The contrast with the outlook at home in the United States is stark. While the backsliding of UK corporate DEI initiatives may be less widespread, the value of investment represented by black founders in the country has yet to exceed 1% in 2021 and 2022, according to Extend Ventures.
Ansley and McKenzie said DEI as a term has become “politicized” and “weaponized” as a way to silence the efforts of groups like Colorintech.
“For better or worse, DEI will certainly be a focus of the next administration. We heard a lot of anti-DEI rhetoric in the lead-up to the election and the actions we intend to take once in office, but ultimately business leaders need to make a choice and look at their , their employees and shareholders see the value of diversity, inclusion and equity, or whether alternatives are more conducive to value creation and attracting the best talent,” McKenzie said.
