Cheryl Contee is the CEO at The Impact Seat Foundation and the author of “Mechanical Bull: How You Can Achieve Startup Success.”
As the first Black woman to have a tech startup acquired by a NASDAQ-listed company, I’ve seen up close how the startup funding landscape can be a maze of closed doors for founders who don’t fit the traditional Silicon Valley mold. While we hear endless tales of young, white male Stanford dropouts securing millions for their first ventures, the reality for Black and Brown entrepreneurs—especially women—is starkly different.
Let me hit you with some hard truth. Despite Black women launching businesses at the highest rate of any demographic, we receive what amounts to a statistical rounding error in VC funding. It’s not just disheartening. It’s a systemic failure that we need to address. Luckily, venture capital isn’t the only game in town, folks. There are other ways to get your brilliant ideas off the ground.
3 Ways To Rethink Your Funding Strategy
If you’re an underrepresented entrepreneur looking to secure capital, here are three approaches you can take to get where you need to be.
1. Alternative Funding Avenues
As I said, venture capital isn’t your only option. Here are a few different opportunities you can consider when looking for funding.
• Revenue-Based Financing: A game-changer in funding, this strategy lets your business borrow against its future earnings. This means repayments flex with your revenue flow, allowing you to skip equity loss and rigid payback. This can be perfect for startup leaders eager to grow without losing equity.
• Non-Dilutive Grants: There’s money out there specifically for us! Look for grants aimed at minority and women-led startups. And don’t sleep on startup competitions because they’re not just about the prize money. They also provide exposure and connections.
• Equity Crowdfunding: It’s a transformative way for startups to secure funding by ensuring everyone can share in your growth with no cap on your potential assets. This method champions collective investment and mutual success, opening doors, especially for minority and women-led ventures.
2. Harness The Power Of Tech And Networks
We live in a digital age, so use it to your advantage! Platforms like LinkedIn and X aren’t just for memes and job hunting. They’re your ticket to connecting with mentors, investors and partners who align with your vision. When it comes to using social channels to form these vital connections, I always say it’s about being strategic and authentic. Share valuable content that showcases your expertise and vision, like insights on industry trends, and engage in meaningful conversations. Remember, though, it’s not just about broadcasting. You must actively listen and respond to others, as well as support and amplify other founders’ voices too. Lastly, don’t underestimate the power of niche online communities and forums specific to your industry.
And don’t overlook virtual incubators and accelerators. They’re leveling the playing field, offering world-class support without the need to relocate to a tech hub. Of course, choosing the right virtual incubator or accelerator is crucial. Here are a few things you might want to consider.
• Clarify your specific needs: Are you looking for mentorship, funding or specific resources?
• Research thoroughly: There are plenty of factors to consider when choosing an incubator or accelerator. Does the curriculum align with your startup’s current stage and goals? What’s the time commitment? Are there any equity requirements? Don’t forget to look into the track record of alum companies. Reach out to founders who went through the programs because they’ll give you the real scoop.
• Consider the connections you’ll make: What network and partnerships can the incubator offer? Will it connect you with the right investors and potential clients?
• Think about cultural fit: You’ll be working closely with these people, so make sure their values align with yours.
3. Embrace The Grind
Let’s be real. The startup funding journey isn’t going to be easy. You’ll face more “Nos” than “Yeses,” more closed doors than open ones. But remember this: Every rejection, every setback, is forging you into the resilient, innovative leader your business needs. Your unique perspective isn’t a handicap. It’s your superpower. It allows you to see opportunities others miss and solve problems others don’t even recognize. Don’t ever let anyone dim your light.
As I’ve detailed in my book Mechanical Bull: How You Can Achieve Startup Success, the journey to secure funding for my startups was far from easy. I faced a multitude of rejections before finally landing an investor who believed in my vision. This experience isn’t unique to me. The Astia Edge report highlights a sobering reality: Black women entrepreneurs typically need significantly more introductions to investors before securing funding compared to founders of any other demographic. It’s a stark reminder of the additional hurdles we face in the startup ecosystem.
But here’s the thing. Each rejection, while disheartening, taught me something valuable. I refined my pitch, honed my business model, made connections and strengthened my resolve with every “No” I received. I kept pushing because I believed in the potential of my SaaS product to make a real difference.
For many underrepresented startup founders, we didn’t get here with a silver spoon. But we arrived with something better: grit, creativity and a vision for a future that includes all of us. By thinking outside the traditional funding box, leveraging technology and persisting in the face of adversity, we can build our own tables instead of begging for a seat at someone else’s.
Together, let’s create a startup ecosystem where every entrepreneur, regardless of their background, has the chance to turn their bold ideas into world-changing realities. The future is ours to shape. Let’s get to work!
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