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With around 2% of venture capital going to Black entrepreneurs, investors need information and resources to help them invest more equitably and discover opportunities they would otherwise miss in traditional investment ecosystems. Equity Matters—a two-day virtual symposium cohosted by Duke I&E, the Center for Entrepreneurship & Innovation at the Fuqua School of Business, and the NCCU School of Business—gathered entrepreneurs, investors, and academics to discuss challenges faced by Black and underrepresented founders and strategies for changing the investment landscape.

Day 1, Inequity by Design, featured:

Day 2, Equity by Design, featured:


    Symposium Highlights

    How were disparities in access to capital created? How is inequity perpetuated in the current investment landscape?

    William Darity on Zoom during Equity Matters panel

    William Darity, Jr.: Black Americans constitute about 13% of the nation’s population, but only possess about 2.5% of the nation’s wealth. People frequently focus exclusively on home ownership, but an important component of that differential is the gap in business ownership and business success. We have to recognize that there’s a tremendous amount of motivation in the Black community to engage in entrepreneurial activity, so it’s not a question of motivation. It’s important to take into account prior parental and grandparental wealth as a basis for creating a springboard for success in the world of business ownership. Prior wealth provides a cushion and a complement to access to venture capital.

    We frequently have mistaken beliefs about the sources of these wealth differentials. Folks frequently make arguments that they are attributable to some sort of deficient behavior on the part of Black folks, so you get solutions that are mistaken as well, like the claim that if we just gave Black people more financial literacy, we would close the racial wealth gap. What this ignores is the whole history of national policies that have crafted this gulf in wealth, [such as] the Homestead Act of 1862, where approximately 1.5 million white families received 160-acre land grants from the federal government. That was their foundation for wealth, and it carries over to current generations. It’s now estimated that 45 million living white descendants of recipients of those Homestead Act grants are beneficiaries in terms of their current economic position. At the same time, Black Americans emerging from slavery were denied the 40-acre land grants they were promised as restitution for their years of bondage.

    Henry McKoy: To this day, you come across folks who think diversity means having one Black person in their portfolio. You have to get away from that sense that somehow this is so rare or unique that we thought we could only find one person. This is not charity, but it’s actually great investing.

    Connie Evans Zoom screenshot from Equity Matters panel

    Connie Evans: People say they want racial equity programs, but often they aren’t being measured against any kind of set goals. There’s also a lack of attention to the psychological cues and determinants of behavior that go unnoticed and unconsidered in these investment practices. A lot of people aren’t aware of their implicit bias. The lack of trust, the lack of intentional goal setting and measurement, and the lack of awareness of what’s guiding your decisions are what’s keeping funding elusive for Black founders.

    Trust is another dimension critical in social interactions, and unconscious racial bias affects who we trust. Investors are trusting in what and who they have seen before. In the absence of any prior experience, how are trust decisions to be made? Research has shown that the trust gap, combined with the wealth gap and the capital gap, acts like kryptonite in keeping black businesses from reaching their potential.

    Entrepreneurs shared their experiences and insights.

    Jamelle Eugene Zoom screenshot from Equity Matters panel

    Jamelle Eugene: [The networks of our two early investors] led to nearly 75% of capital we’ve raised. That’s typical of minority companies; you don’t get the luxury of being able to figure it out as you go.

    Candace Mitchell Harris: No one understood our market, no one understood natural hair, no one understood the hair industry. That’s why I learned alternative routes of raising capital. I developed the grit and the perseverance that it really takes to endure the entrepreneurial journey, so it may have been hard, but I am thankful for how it built my character and built my tenacity.

    Gerald Meggett: When I knew it was time for me to raise some capital, I knew I needed to turn myself into a VC. I read every book that Brad Feld came out with. So if you’re a founder, train yourself to become a venture capitalist so you know what the investor is looking for before you come to them. It’s a whole other language, so know the language first and then when you’re getting to the table, you can bring more confidence. If you’re an underrepresented founder you’ve got to be ten times more prepared at the table.

    How does the current landscape disadvantage investors and founders?

    Rodney Sampson: Sometimes a white corporate structure or a white philanthropic structure is only looking to do the minimal and the performative, and we end up taking it because we have no other resources, and then false negatives occur. We don’t have enough money or time to get it right.

    Rodney Sampson Zoom screenshot from Equity Matters panel

    You haven’t been seeing us, you haven’t been seeing our grit you haven’t been seeing our brilliance, you haven’t been seeing our innovation. And when you do see it, you’re afraid that it doesn’t fit into the archetype that you’re accustomed to investing in. But there’s where the opportunity is.

    Folks are saying, “Don’t look at someone as a Black founder,” but I disagree with that. Absolutely look at that Black founder, because if they got to this stage, I bet you they had to work ten, fifty, a hundred times harder to get there. That’s the person you should want to bet on.

    Connie Evans: Some psychologists have talked about the accumulated trauma Black people have experienced from discrimination and implicit bias. I loved hearing Candace talk about how [her journey] was hard but it made her resilient. What we have found in our research is that not all entrepreneurs and founders are finding their way. That accumulation of trauma from being discriminated against, and having implicit bias around them—even under the pretense of wanting to diversify—takes such a toll on some founders that they don’t grow their companies, they give up, they quit trying to make that breakthrough strategy. How many founders just don’t continue because they get so beaten down?

    At a moment when many organizations are making commitments to equity, how can real change happen?

    Henry McKoy Zoom screenshot from Equity Matters panel

    Henry McKoy: Anything that brings more capital for the most part to Black ecosystems is a good thing. But a “Buy Black Day” or a “Juneteenth Day” is not going to solve all our problems. And it’s ridiculous that the hurdle to get people saying they will get out of their comfort zone and buy from Black folks is that people have to die.

    I read something yesterday where a number of banks who made these major commitments were pushing back against calls for them to integrate racial equity into their governance, and they said, “We’ve done enough.” There’s still a lot that needs to happen to fix the systemic issues.

    William Darity, Jr.: Frequently when companies take steps to try to support Black-owned businesses, they really view it as an act of charity, rather than an active investment. We really need to have them shift their psychological point of view to truly value the types of support they’re giving to Black-owned businesses and treat them as acts of investment.

    Candace Mitchell Harris: A lot of companies like to make these statements for PR purposes, and it makes them feel good and makes them feel they’re doing something, but at the end of the day, what have you really done? Everyone put out a racial equity plan last year. Where are they on it this year? What have they done? Those are the questions we need to be asking.

    How can we change the landscape?

    Candace Harris Zoom screenshot from Equity Matters panel

    Rodney Sampson: It starts with early exposure, education, training, and career placement, then innovation, entrepreneurship, capital, and access to markets. That’s the playbook. And we’ve got to make sure that the commitments in each of those areas are not performative.

    Connie Evans: I don’t think the answer is to send all the investors to therapy so they can work it out. We need to create and change systems so we are using processes and standards to bypass individual mindsets. Instead of buying the normal vanilla ice cream you’ve become used to buying, look at all the other kinds of flavors that are now in the marketplace and make a decision to buy a different flavor.

    Jamelle Eugene: We have to extend our trust beyond what we’re comfortable with. You start to open up where you’re looking for these different companies and the different types of people that you’re looking to invest in, and you start investing in ideas and businesses and not necessarily the color of the people who are behind those ideas and those businesses.

    Candace Mitchell Harris: If we were all working together versus everyone building on their own, we could open up even more doors and just make us more powerful as a community. We do have the power to build our own [companies], and we have to invest in our own. Let’s flock to something that we can have ownership in and let’s support a Black founder. I think a lot of influencers need to leverage their power as well.

    Ade Omitowoju Zoom screenshot from Equity Matters panel

    Ade Omitowoju: It’s a fight all across the board, it is calling out institutional racism at the corporate level. It is holding folks accountable by being more transparent with data. It’s the elevation of stories of founders that are doing excellent work, so we’re not seen as a completely separate asset class.

    Rodney Sampson: One of the good things that’s come out of the pandemic is that to some degree, it has leveled the playing field. You have an investor saying, “Let me know the next time you’re going to be in Palo Alto,” and it’s like, I’m not. What’s happened this year has been somewhat a democratization in terms of not having to spend money to get money. So I hope we don’t go back to that standard.

    Connie Evans: Tell the stories of [the entrepreneurs] and people who invested in them and are getting a return and sharing in their growth. Talk about what you hear that’s working. Talk about the genius and the success that Black businesses and founders are having and learn from them. Bring along your allies and your social network. Create your own new group who will benefit from the kind of investing you’re doing by investing in Black-owned businesses. I’m not asking investors to change what they do, maybe change who they do it with.

    Rodney Sampson: There are Black ecosystem development organizations and entrepreneurship support programs that exist nationwide [for investors to explore]. These organizations are already cultivating Black entrepreneurs.

    Gerald Meggett Zoom screenshot from Equity Matters panel

    Gerald Meggett: I highly encourage angel groups to raise awareness about who they are and be less private about who can get in the door. I just want to just compel more angel investors not to wait for that email from someone you know. Figure out how you can get connected to some other colleges, the scenes, the environments, and find those early-stage opportunities to lift them to the next level. Every single college dean has their email address on a website. Find every business school and every engineering dean if you’re part of an angel group. Email them and say I’m looking for underrepresented founders.

    My deepest hope is that someone in these conversations is listening and they’re going to think differently and be inspired. Open up some conversations. When you see an underrepresented founder, get to know them and get to know their story.