How Hard is it for Minority Businesses to Get Funding

Allie Nimmons:
Welcome to the Underrepresented in Tech podcast, hosted by Michelle Frechette and Allie Nimmons. Underrepresented in Tech is a free database built with the goal of helping people find new opportunities in WordPress and tech overall.

Michelle Frechette:
Hi, Allie.

Allie Nimmons:
Hi, Michelle. Never gets old.

Michelle Frechette:
How are you today? I know, I love it. It’s our thing.

Allie Nimmons:
It’s our thing. We need to make stickers that say, Hi, Allie, on them. But like, Hi, Allie, with the E.L stretched out.

Michelle Frechette:
And then underneath, Hi, Michelle.

Allie Nimmons:
Hi, Michelle.

Michelle Frechette:
I may have to design that later.

Allie Nimmons:
Yeah, we don’t have a merch shop on our website.

Michelle Frechette:
We should.

Allie Nimmons:
We should.

Michelle Frechette:
Add that to your list, Allie, and I will help you get it done. But add it to the list because you keep the list and just assign me my tasks because that’s the way that our relationship works better. Allie’s in charge.

Allie Nimmons:
I also love when we do-

Michelle Frechette:
Michelle, do this. Okay.

Allie Nimmons:
I love when we record the newsletter and I have to do something and I like, you can hear me going click, click, click, click, click, click.

Michelle Frechette:
I know. I love it too. It’s like, I hear your keyboard. Well, before we get into this week’s topic.

Allie Nimmons:
We have a lot to discuss. We have a lot to say.

Michelle Frechette:
We have a lot to discuss today. But the first things first, we ran a contest and we gave away three hour long pick your brain sessions with us. And then we were supposed to announce them and then we were in Bangkok and we forgot. Sorry about that.

Allie Nimmons:
Yeah, February was a big month.

Michelle Frechette:
February was crazy. And even until the first part of March where I came home and got sick and playing catch up from all of the jet lag and everything else. So anyway, we did a random drawing today of all the different people who entered. And I want to announce the winners because I have them written down. So without further ado. I was going to ask you for a drumroll. Thank you. So we picked three winners, and the first one is Amber Hines from Equalize Digital.

Allie Nimmons:
Yay. A previous guest on the show, actually,

Michelle Frechette:
Yes, not only a previous guest, but Amber runs a meetup for accessibility. And she and Alex Stein did a review of our website and I have a list of things that we need to fix and we [inaudible 00:02:29]. So it’s nice that Amber’s name came up in that. So thank you, Amber. We’ll be reaching out to you to schedule that hour pick your brain session. The second person we drew was… Where’s my drum roll?

Allie Nimmons:
I was making a note. Sorry.

Michelle Frechette:
I know. The second person is Matt Medeiros from the WP Minute. So Matt, we will also be reaching out to you to schedule your hour. And the third and final winner. Allie? Is Jessica Frick from Pressable. So thank you Jessica for entering our contest. We’re excited to speak to all of you. We will be reaching out to you with a link to schedule your hour with us. And we look forward to you picking our brains about anything and everything underrepresented and how we can help you in your businesses being more inclusive.

Allie Nimmons:
So exciting.

Michelle Frechette:
It is so exciting.

Allie Nimmons:
Yeah. Thank you to everyone who entered. We really appreciate it. And I’m so excited to talk with those three people, because those are all three people that we know and we like, and who are cool, who do cool things in the community. So like, win-win for us also.

Michelle Frechette:
Absolutely. I will say, everybody that entered, we know in some way, shape or form. None of the names that entered this were foreign names to us. And so that means we need to reach further. So we need to do better. But honestly, I was excited about it.

Allie Nimmons:
Speaking of further reach, I did also, we announced it on Twitter, but I wanted to reiterate, we, this week, because I checked on Monday and then I saw that we hit this milestone on Tuesday. We have reached 10,000 downloads/listens on this podcast.

Michelle Frechette:
I wish I had a button that was a applause. Like, ah. The crowd goes wild.

Allie Nimmons:
I couldn’t believe it.

Michelle Frechette:
That’s so exciting.

Allie Nimmons:
It was so cool. I was just looking in our, because we use Castos, shout out to Castos, for our podcast hosting. And I was updating some stuff on the site and I was like, oh, let me take a peek at our analytics. Was not expecting to see that number. And I was so surprised, and I texted Michelle and we jumped up and down virtually together as much as we can.

Michelle Frechette:
Tears were shed, happy tears.

Allie Nimmons:
Yes. It’s incredibly cool to see a number like that. Yeah.

Michelle Frechette:
Absolutely.

Allie Nimmons:
It’s so cool that Castles gives us that information and yeah, total listeners/downloads. 10,000, now 85. So we’ve had 85 more listen since Tuesday.

Michelle Frechette:
I love it. What I take away about that, number one, I know that people support us by listening to us and I love that. But more importantly is people are interested in learning how to serve the underrepresented population better. And so that just warms my heart more than anything could.

Allie Nimmons:
Yeah, it’s really cool. It’s really cool to see that support. Because it’s like, I feel like a lot of content creators have this feeling where it’s like I create content all the time and I put it out there, and if you don’t get immediate feedback comments and things like that, you’re like, oh, is anybody even paying attention or listening or what’s going on?

Michelle Frechette:
It’s easy to get discouraged, for sure.

Allie Nimmons:
Yeah. So seeing a number that is really, really cool. And we’re very grateful to all the people who do listen to us because very validating. And it means we’re doing something good in the world.

Michelle Frechette:
It does. And we do have a newsletter coming out the next week, so if you aren’t subscribed to our newsletter yet. Make sure you go over to underrepresentedintech.com and sign up for the newsletter because we’ll be sharing information there as well.

Allie Nimmons:
Yep, yep, yep. Cool. I think that’s all the housekeeping stuff. You can dive into the topic now.

Michelle Frechette:
So let’s get to our topic. Absolutely. So I was on Twitter and I saw a story about Silicon Valley Bank, and it was written by a woman, and she specifically goes into some of the ways that underrepresented people are denied access to funding. So venture capitalism, angel funding, any of those kinds of ways that people seek funding. And a quick Google search of funding for underrepresented business or any combination of those kinds of words will serve you up all kinds of advertisements for people to be able to look for grants, apply.

We have ways that we can fund you and all of this. But the truth of the matter is, because I’ve done a little research today, that venture… I’m going to read this one to you. This comes from CNBC, venture capital for black entrepreneurs plummeted 45% in 2022, data shows. Black entrepreneurs have historically faced disparities in securing venture capital funding and typically receive, get ready for this, less than 2% of all dollars each year. Less than 2% goes to black entrepreneurs. That is ridiculous.

Allie Nimmons:
Ridiculous.

Michelle Frechette:
Ridiculous. And then Fast Company talks about this too, and they have an article called For Black Entrepreneurs, the racial wealth gap makes finding funding nearly impossible. And the quote from that one that I pulled out is because minorities comprise just 8.5% of entrepreneurs pitching their businesses to angel investors early last decade. And only 15% of these minority companies successfully translated that pitch into dollars.

Not enough black-owned businesses ideas even get a chance to try, even when the founders get in the room to make a pitch, the chance of getting follow on capital or later stage investments is almost zero.

Now, most of the articles that I found specifically were about black-owned businesses. I think it’s easy to translate that over to a lot of other minorities and other underrepresented nests. I know that women, I don’t have numbers for this, but women tend to get fewer loans than men, clearly. And anybody who’s not white tends to get fewer loans than white guys do. And I specifically mean white men. So we talk about it a lot. The white cis het, straight men are the ones that still sit at the top of the-

Allie Nimmons:
We need to come up with an acronym for that mouthful of a description.

Michelle Frechette:
We’ll work on that. I know, right? I think that most people just call them tech pros, but I don’t like to use that terminology all the time. But yeah, and I’m not saying that it’s easy for every white guy to get a loan either or to get right capital funding. I’m not saying getting capital funding is easy in any stretch of imagination because there is a lot that goes into pitching. There’s a lot that you have to do.

One of the exercises I had to do in my MBA, 20 something years ago, was actually go forward and pitch an idea to fake venture capitals in a classroom to try to get funding for your fake business. And it was harrowing, even when it was all fake. So it’s not an easy thing, for sure. But when you look at the fact that, what did I say, 2%, goes to black-owned businesses. You can see the disparity is absolutely ridiculous. And I think, so I haven’t done enough research, because this actually just came up today. I think that there’s a lot of supposition about underrepresented folks.

So the communities in general, people at large have always assumed that women are not as intelligent as men. Women don’t have the gumption that men do. There’s always been suppositions that minorities aren’t as smart as white people. I mean, these are ridiculous claims, of course. And let’s face it too, vernaculars, accents, things like that play into a lot of perception of that, wrongly so. But I’m just stating what happens. And it’s really, really unfortunate. No, it’s not even unfortunate. What’s this? What’s the better word than unfortunate? It’s criminal, almost.

Allie Nimmons:
Disgusting.

Michelle Frechette:
It’s disgusting. It is disgusting because it’s not equitable at all. Now we talk about fairness. I don’t like the word fair. Fairness is not as good a word as equity. It’s not an equitable situation. It’s not even an equality situation. There’s so much wrong with judging on perceptions and not actually letting somebody in to give the pitch. The flip side of that is when you are an underrepresented person and you see numbers like that, you’re discouraged from even trying.

So as a woman owned business, as a minority owned business, you say to yourself, am I’m really going to put in the hundreds of hours of work to create this pitch and put together everything that needs to go into it, travel to wherever it needs to go. So we’re talking about time and money, when the numbers are so much against me. Why would I even try? And so it’s just a losing game and I don’t know what the answer is, but I wanted to bring it to light because as I started to look down this rabbit hole, it was just so discouraging.

Allie Nimmons:
We hope you’re learning a lot from the podcast. If you have any questions or need specialized help making your space more diverse, equitable or inclusive, book a consulting session, audit or strategy service with us. Just go to underrepresentedintech.com/services for more information. Back to the show.

It reminds me a lot of the problems with entertainment award shows, like the Grammys, the Oscars, the Emmys, all those things. And to me, from my perspective, a lot of it comes down to, well, who is sitting at this table making these decisions? So for the venture capitalist thing, for people going in and asking for this money, asking for these investments, whose money is that that they’re asking for? Who is saying, okay, yeah, I’m going to reach into my pocket and give you this money? Who is making those decisions? Who’s making those approvals? Who is steering that conversation?

And yeah, if it’s a bunch of straight, white, heterosexual men, all within the same age group, if it’s the tech bros, we are predisposed. And I’m not making an excuse for them, but we are in a lot of ways predisposed to favor people who look, sound, act, think like us. It’s this communal tribal instinct that we have to support our own.

And so at the base of it, I think, is that sort of a thing where it’s like, well, I see myself in that other guy, or that guy reminds me of me, or maybe he reminds me of my friend or something, and so I’m going to pick him without, I think that’s the, what would you say, that’s the least intentionally harmful way to think that that happens, is when you have this unconscious bias, we talked about that before. And then on the opposite end of that spectrum is the, well, yeah, women are not as good at business as men.

So this woman’s business idea, even if it’s great, she’s probably going to fail because she’s a woman, because she is a single mom, because of all of these factors that you’ve decided are important. And so you deny her that.

And yeah, I equate it a lot to those award shows where for the longest time, there’s a bunch of old white men on those panels or whatever, making all those decisions. And I think that as time, we’re not going to solve these problems, but a lot of these award shows are becoming more inclusive. And we do have people of color and women winning more frequently.

And I think a lot of that comes down to the people who are making those decisions are changing. And so if I have to wave a magic wand and form a solution, it’s that, right? Whoever these investors are need to be people of color. They need to be women, they need to be queer, they need to be all these things.

The problem though is if these people aren’t getting investment in the first place to then become successful, how are they going to end up in that position? Even if you’re not familiar with all of this world of investing and all of that, we’re all familiar with Shark Tank, that’s the most consumer available version of what we’re talking about. And you look at these, I’ve never watched a single episode of Shark Tank, but I know the concept.

Michelle Frechette:
I have.

Allie Nimmons:
And I know that, at least from what I’ve heard, usually it’s like three or four people, most of whom are, maybe there’s one woman, but the rest of them are men.

Michelle Frechette:
Usually one man is a black man. So Daymond is, I can’t think of his last name, but yeah.

Allie Nimmons:
So from my perspective, not a super equitable or a super diverse group of people, but there’s some effort put out there. And I think that’s kind of for marketing reasons, it’s on TV, blah, blah, blah, blah, blah.

Michelle Frechette:
Oh, for sure.

Allie Nimmons:
But if that black man and that woman were never given any sort of investment or any sort of opportunity, they wouldn’t be on that panel and they wouldn’t be able to provide a different perspective and a different thought process than Mark Cuban or whoever. So I mean, to me, that’s the magic solution is, have more diverse people making these decisions, but it’s this catch 22 loop situation where how are these people going to even get there, if they’re not given a chance in the first place?

Michelle Frechette:
And let’s not forget that people and sitting in those seats are also thinking of a white marketing mind. So they’re always thinking about marketing to the white people in the world. They’re not remembering that there’s more to marketing than that. Now we see, we’ve talked about some of the different things, the Cheerios commercials, the Etsy commercials that are now embracing more diversity and inclusion. But the people who are making those decisions way at the top are really thinking about, how can I sell this to white people?

Allie Nimmons:
And what’s funny to me, I remember learning, one of the few things I remember from my economics class in high school, is typically speaking in America, women make more of the financial purchasing decisions than men do.

Michelle Frechette:
Yes, they do.

Allie Nimmons:
Teenage girls have some of the most powerful buying power in this country. Things that teenage girls like are the things that make money.

Michelle Frechette:
And you see that more with influencer marketing than you do with traditional marketing.

Allie Nimmons:
Yeah. But people don’t like to think about it that way.

Michelle Frechette:
No, they don’t.

Allie Nimmons:
It’s very bizarre. So yeah, this whole thing is very frustrating to see. And I can’t imagine being one of these people who, like you said, work so unbelievably hard and genuinely have good ideas, genuinely have great things to bring to the table. And then those ideas just die before they’re able to do anything with them. Or a couple of years later, a straight white guy takes that idea and is able to sell it. Because that happens too. And it’s a dang shame.

Michelle Frechette:
Yep. I read something today, I wish I could remember, it was on TikTok. I admit that I look at TikTok for 15 minutes before I get out of bed every morning. And there was a guy in there and he was talking about, there’s something additional to mansplaining. And it was the other word, I’m going to try to remember, it started with he. But it was like when a woman gives an idea last week and this week it’s the man’s idea and he is pitching it. But I can’t remember what the take on the word was, but that happens a lot. And it’s what you just said like, last month I pitched an idea for our blog about X, Y, Z, this month it’s the boss’s idea. And everybody runs with it because he said so as opposed to the woman last month, right? So we see that kind of stuff all the time.

Allie Nimmons:
It happens all the time. And oh, it’s frustrating. I’m sure it’s happened to you. It’s happened to me. I’ve seen it happen. I’ve worked places where I’m sitting there and I see it happen with two other people. And I’m just like, what just happened? And it’s always the people too, I’m going to go on the soapbox for a second. It’s always the people who say that they would never do something like that. Who are the people who ignore the women’s idea and then take the idea when the man says it. It’s always the person who’s like-

Michelle Frechette:
A pseudo feminist.

Allie Nimmons:
Yeah, like, I care so much about diversity and inclusion and all of this stuff. And then they have these unconscious biases that they let play out into their day and they just don’t pause to think about it.

Michelle Frechette:
Exactly. So like I said, I don’t know what the solution is. I don’t think we can affect a solution today, except that you and I like to shine a light on things that we are seeing happening and hopefully bring to light things that people who listen to us don’t even think about having been an issue before. But if you think about it makes sense. It doesn’t make sense in the terms of like, yes, that’s the right thing to do, but I understand how it’s happening, is what I’m trying to say. That underrepresented folks are less likely to get funding and it’s wrong. And I hope that we can help shine a light so that maybe those wheels start to turn a little bit.

Allie Nimmons:
Yeah. One person and I’ll say too, yeah, we always want to end with a little bit of positivity because it’s such a great topic. I love that you chose this topic. It is a bummer. Let me make sure I pronounce her name correctly. There’s a woman that I’ve been following on Twitter for a long time. Her name is Yelitsa Jean-Charles. I will include it in our show notes. I’m trying to get better about doing show notes for the episodes.

Michelle Frechette:
I appreciate that.

Allie Nimmons:
And she is incredible. She founded a company called Healthy Roots Dolls, and she designed a doll larger than a Barbie, like a, I don’t know, how big is that? Like a baby doll kind of a thing.

Michelle Frechette:
Like an 18-inch as opposed to a 12-inch kind of thing.

Allie Nimmons:
Yeah, a large sized doll. And it has textured black hair that you can wash, you can put products in, you can style, you can do all these other things. Whereas I remember having Barbie dolls when I was little and trying to style their hair. And that stuff is plastic and it just [inaudible 00:22:07].

Michelle Frechette:
Yeah, for sure.

Allie Nimmons:
So she created this doll and she’s incredible. She’s a 2021 Forbes 30 under 30, this doll is in Target. I go and I visit her every single… Her name is Zoe, the doll. And I go and visit her every time I go to Target. And I make sure that she’s front and center and not hidden behind other dolls and stuff. And I don’t know fully her journey with getting capital for this company, but I know that she did have to do that at some point. And so, if you’re listening to this and you’re a person who’s been trying to do this and you feel discouraged, she is a fantastic example of when it does work, she has found success. And so now talking about this, I’m going to go back on her Twitter and try to find if she does talk about getting venture capital for this doll. Because it’s really incredible and she did it. I don’t know how she did it, but she did it. And it’s really incredible. So if you’re looking for inspiration, definitely go check her out.

Michelle Frechette:
And I want to end, before our final goodbye, by reminding people that the very first recorded female self-made millionaire in America was Madam C.J. Walker, an African American entrepreneur.

Allie Nimmons:
Yep, yep, yep. And ironically, she also made her money based off hair products.

Michelle Frechette:
Yes, she did. She did so.

Allie Nimmons:
Pretty cool.

Michelle Frechette:
Proud of her. Yeah, absolutely.

Allie Nimmons:
Awesome topic, Michelle.

Michelle Frechette:
As I always say. Yeah, come back next week, where we have no idea what the topic will be, but the conversation will be great.

Allie Nimmons:
Lovely. Cool. We’ll see you all next week.

Michelle Frechette:
We’ll see you then. Bye.

Allie Nimmons:
If you’re interested in sponsoring an episode, using our database or just want to say hi, go to underrepresentedintech.com. See you next week.