Discrimination in startups and entrepreneurship

I came across an old CNN video, featuring a famous tech blogger Michael Arrington  saying    ‘I don’t know a single black entrepreneur’,

a study published on CNN pointed out that the vast majority of top executives at the leading Silicon Valley tech firms are white men.

Women and Asians are less frequent but they have an ok presence, but African-American and Latino tech leaders remain a rarity.

And only 1% of entrepreneurs who received venture capital in the first half of last year are black.

This made me reflect on the status of financing when it comes to minorities, I have read an analysis that points out that some weak projects by white & Asian entrepreneurs get financed while much stronger projects with black founders are shunned.

I personally believe that “capital” is not racist, on the contrary, capitalists want to make more money and they won’t care even if you came from outer-space ….. but on the other hand stats don’t lie.

So why Black entrepreneurs and start-ups are shunned when it comes to funding!!

possible answers:

1- Connections : often the right connection is the #1 reason for funding, maybe black entrepreneurs are less connected to investors or share less connections with investors than other minorities /communities.

2- Stereotypes & Hollywood: maybe Latino & African Americans stereotypes trick the investors into thinking that if he invests in a Blacks / Latinos founded start-up he would have to deal with gangster style employees.

3- Better invest in what we know: another reason is that most investors being White, they may prefer to invest in a founder that they judge had a standard way of thinking, and that the other communities do not think the same way the investor do!

This just confirmed my original idea that Connections are the most important factor in an entrepreneur success, and that’s why i started Startupz a club to create connections between entrepreneurs


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