Editor’s Note: Serena Williams is an American professional tennis player and founder of Serena Ventures. The opinions expressed in this commentary are her own.
My life story is one of breaking barriers and championing inclusion, on and off the court. Coming up in a predominately White male sport, I have been underestimated and underpaid throughout my career. Now, as a venture capitalist investing in early-stage startups, I see myself in the Black female founders who are often counted out right from the start.
The Black female founder begins her fundraising journey already down a match point. Black women face a unique set of challenges colored by misconceptions of both race and gender. Investors notoriously doubt female founders, typically focusing investment analysis on the potential risks and losses of female-founded startups. They often assume that women-founded companies are more likely to fail. With male-founded startups, investors take a more optimistic approach, focusing on founders’ potential to capture market share and drive the accelerated growth necessary for massive financial returns. Meanwhile, Black founders contend with systemic inequity at each step of their journey. Investors expect to see more traction from Black founders than their White counterparts, and will often question their technical expertise and market understanding.
Black female founders exist at the intersection of these challenges, making it exponentially more difficult for them to get the funding they need.
And then there’s the problem of the network effect.
To raise your first million, you need to raise your first check. That can be notoriously difficult. Entrepreneurs often turn to their friends and family to raise capital, a luxury reserved to those with wealthy networks willing to bet thousands of dollars on a person with a good idea.
Black women rarely have a wealthy network they can call upon for early investment. The average Black household had a net worth of $17,150 in 2016, nearly 10 times less than their White counterparts.
Venture capitalists have a tendency to believe in — and consequently fund — founders who feel familiar and have the ‘right’ pedigree. In theory, this makes a lot of sense — “invest in what you know!” However, this attitude has created a landscape wherein White men receive an overwhelming majority of venture capital funds. Only 4% of the people who work in venture capital are Black, and only 3% of the people actually leading investments are Black, according to data from the National Venture Capital Association. Investing in people who look like you leads to systemic exclusion. In 2018 and 2019, Black women founders raised only 0.27% of venture capital according to a data report by digitalundivided.
Without the network necessary to raise critical starting capital, most Black female founders close shop before their product even reaches the market. By building exclusive spaces and systems, we are missing out on the innovation and genius of so many.
My firm, Serena Ventures, invests in early-stage entrepreneurs who often pitch us with just a vision. When thinking through what role I wanted to play as an investor, funding early-stage ventures was a no-brainer. I look to support the dreamers and the visionaries of the future, while giving them the opportunity to capitalize on their genius.
Two incredible Black women in my portfolio include Crystal Evuleocha and Erin Carpenter. Evuleocha, who is a recent Forbes 30 Under 30 honoree, founded Kiira, a telehealth platform for collegiate women focused on addressing women’s health inequities — a cause I’ve long been passionate about. Kiira’s AI-driven platform is staffed by health care providers who understand the gendered and racial nuances of health care, providing an empathetic and trustworthy voice in a field where Black women have been dismissed. Carpenter, the founder and CEO of Nude Barre, is tackling another form of inequity by shaping the fashion industry into one that is more inclusive. Nude Barre makes intimate apparel for all skin tones, expanding the shades of nude to include consumers who are often overlooked. Evuleocha and Carpenter are a small fraction of one of the fastest-growing group of entrepreneurs in America.
Silicon Valley does not have a talent pipeline problem. It has a network selectivity and resource allocation problem. Venture capitalists should expand their network to include Black female founders and focus on hiring investors who have access to a more diverse network. We can no longer stay oblivious to how our homogeneous networks influence who we fund and who we hire. Lastly, we must extend the same thoughtfulness and consideration we give White male founders to all entrepreneurs.
I am by no means alone in my mission to build an inclusive venture capital landscape. The champions for Black female founders are here to stay. It’s time we all play on the same court.
Correction: An earlier version of this piece mischaracterized Serena Ventures. It is a firm that invests in early-stage entrepreneurs.