Black founders receiving more venture capital spurs innovation, says entrepreneur Morgan DeBaun
- “You have to remember that a lot of young Black founders, we tend to look a little bit different than your typical pattern and in Silicon Valley, people often engage in pattern matching,” entrepreneur Morgan DeBaun told CNBC.
- Less than 1% of start-up founders who receive venture capital funding are Black, according to nonprofit Transparent Collective.
- “This is actually how innovation is made — when you go outside of the immediate opportunity,” DeBaun, CEO of Blavity, said at CNBC’s Inclusion In Action Forum.
Entrepreneur Morgan DeBaun told CNBC on Thursday that more funding can make its way to Black founders if venture capitalists recast some aspects of their investment criteria and recognize their own biases.
“You have to remember that a lot of young Black founders, we tend to look a little bit different than your typical pattern and in Silicon Valley, people often engage in pattern matching,” DeBaun said at CNBC’s Inclusion In Action Forum, which aimed to focus on actions to improve diversity in corporate America.
Many in the U.S. business community have pledged to step up their efforts to address racial inequality following the wave of demonstrations sparked by the death of George Floyd in Minneapolis earlier this summer.
There are racial disparities at the C-suite level — just four CEOs of Fortune 500 companies are Black, for example — all the way down to who receives venture capital funding. According to the Transparent Collective, a nonprofit that helps minority founders, less than 1% of start-up creators who receive backing from VC firms are Black.
DeBaun, a St. Louis native who serves as CEO of Blavity, a media company for Black millennials, said she falls outside the typical background of someone who may be receiving a lot of investment interest.
“I’m from the Midwest. I don’t have a technical degree. I didn’t go to Stanford, and this was my first company so I was first-time founder. My pitches may have sounded differently,” said DeBaun, who majored in political science at Washington University in St. Louis.
She co-founded Los Angeles-based Blavity in 2014, after beginning her tech career at Intuit a year prior, according to her LinkedIn. According to TechCrunch, Blavity has raised at least $11 million in venture capital funding so far, including from Comcast Ventures.
DeBaun said that as investors seek to evaluate pitches from Black founders, it’s critical to remember the opportunity that may be present by working with people who have a different background.