The mainstream venture capital market is highly competitive. There are high barriers to entry (sufficient capital, operational know how, operational and supply chain logistics relationships, extensive network of engaged professionals (attorneys, accountants, etc.), and we expect that competition will intensify in the future. Our competition includes large financial institutions, Private Equity and Venture Capital firms that have substantially greater market presence and financial, marketing and other resources than we do. However, black entrepreneurs are invisible to the market. There is a scarcity of funds for black entrepreneurs and black businesses. Indeed, the world of finance is a segregated structure in which black businesses and their founders are ignored and invisible.

Venture Capital and Angel Financing have traditionally been advocated as important sources of financing for young innovative firms that find it difficult – if not impossible – to access even bank or debt finance. However, black owned companies continue to face barriers in relation to access to capital, the often narrow markets and sectors that they serve. Initial under-capitalization has a long-term effect constraining future business growth, not least because under-capitalization may mire the firms in sub-optimal scales, which leave them more susceptible to failure.

Black founders receive roughly 1% of VC funding. One of the reasons for this is that venture capital investors, who are largely white, don’t have visibility to and value the development of black entrepreneurs – therefore leading to negative mainstream investor viewpoints of black entrepreneurs. As a result “black companies have simply been unable to implement and execute their abundance of good ideas.”