In venture capitalism, venture capitalist companies invest money in upcoming businesses that they think are promising and worth backing. They generally require a percentage of equity stakes in return for their investment. The investment can make a huge difference in whether or not a business will succeed.

Historically, venture capitalism has been the domain of white people, and black founders have struggled to receive funding. According to reports in the Harvard Business Review and the Christian Science Monitor, less than one percent of the total venture capital funding in 2020 went to black companies. There are several reasons for this, including unconscious bias. Things are changing, though.

There has been a more energized sense of social justice in the American corporate world in recent times and that is likely to lead to a growth of funding opportunities for startups by people of color. There are now plenty of black-owned venture capitalist agencies and companies that might be willing to invest in your startup business.

Getting investment from black-owned venture capitalists can help black and minority startups enhance their financial, marketing, and operational experiences.

Contacting black-owned venture capitalists

Economic inclusion is what will enable black-owned enterprises to have equal footing in the business world and that is one of the reasons why many socially-conscious venture capitalists are willing to fund them. To successfully receive funding, though, you will need to do your research in advance.

The first step is finding black-owned venture capitalists that are willing to invest in your startup. Fortunately, many reputable business sites are providing this information. You can sign up for their newsletters and receive curated and updated lists of black-owned venture capitalists.

Here are a few things to remember when you contact a black-owned venture capitalist:

•  Research the black-owned venture capitalist ahead of your meeting. They may have a similar background to yours and may have struggled to reach their current position. That means they might be more likely to understand where you are coming from and you won’t need to bend backward to prove yourself. At the same time, it also means that they might hold you to a higher standard and expect more from you.

•  When you contact a black-owned venture capitalist, make sure you send an email to or speak with the decision-maker, not one of their associates.

•  While it is necessary to highlight your product and services, you must also be able to demonstrate that you have what it takes to build and run a profitable business.

•  Have a detailed business plan ready to show the black-owned venture capitalist when you meet with them. It should include how you intend to acquire customers, how you will manage day-to-day business operations, how you will make a profit, and so on.

•  Prepare your pitch well and practice your presentation. You might want to videotape yourself to get an idea of how you appear to others. You want to convey assurance and self-confidence, not arrogance.

•  Identify and plan to navigate, and for any communication gaps, you might encounter. Expect to be questioned and challenged about your market, products, competitors, and business strategy. Say what you mean directly without withholding key information.

•  Explain how your different backgrounds and personal circumstances allow you to find unique market opportunities and create a framework for them. Your business solutions don’t necessarily have to be innovative, but you need to show how they can resolve existing market demands.

•  If you are a solo founder, you may need to explain why. Instead of thinking of it as a disadvantage, use it as a badge of honor that you made it on your own so far. Perhaps you came from a financially-disadvantaged background and did not have access to funding from family and friends. You’ve held another job to stay afloat while your business gets up and running. You have struggled despite a network deficit. These details will highlight your perseverance and help convince the black-owned venture capitalist that you are the right person to helm the business.

After you receive funding and get your startup up and running, plan on giving back to the community and helping other black entrepreneurs achieve business success.