This Chart of the Week examines the quantity of startup deals featuring at least one Black founder in the last 12 months, along with the corresponding percentage of investment allocated to these ventures.
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Black-founded companies only received 0.48% of Venture Capital (VC) funding in 2023 – a number that is way too low, knowing that 14.4% of Americans identify as Black.
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Black-founded companies receive a much more notable portion of online equity investments, with 6.8% of all Reg CF and Reg A+ equity investments allocated to them in the last 12 months.
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However, their fundraising efforts are underperforming. Despite Black-founded startups accounting for 12% of equity crowdfunding deals, they receive a disproportionately smaller share of investors’ funds.
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While the online private market helps mitigate barriers hindering minority founders from accessing capital, further progress is necessary to align the percentage of deals led by Black-founded startups with the funds they receive.
