All Articles Tagged "african americans in tech"
I want to build a network of support for the nonprofit I want to start. The mission of the nonprofit is to support underrepresented minorities, especially black and Latino, in building start-ups. One of the biggest hurdles for building a start up isn’t talent or lack of ideas, it’s financial. Most people in my target audience don’t have the financial means to focus 100% of their time to building a business. They have bills to pay. The nonprofit, Start Up for All, will be an incubator that will provide participants with mentors in sales, PR, marketing, finances, etc. while providing them with a stipend to help cover their bills while they work to get up and running. In return, we will take a 6-8% equity position in the business. Quote that Inspires You: Life can be much broader, once you discover one simple fact, and that is that everything around you that you call life was made up by people that were no smarter than you. - Steve Jobs Twitter handle:@glennette Ldc: So, are you a Washington, D.C. native? How was it attending Howard University and how do you find D.C. currently? GC: Actually, I am originally from Elizabeth City, NC. Going to Howard was a great experience. I have family in DC so, moving from NC to DC was not that big of a change for me. Howard was a different experience for me socially because I had come from a predominately white high school. In most of my HS classes, I was the only or one of the only black kids in my classes. It was great to be around other smart black people. LdC: So you have created this extraordinary program in tech. What exactly does UXCamp DC and MobileUXCamp DC entail? GC: UXCamp and MobileUXCamp are un-conferences or barcamps. An un-conference is just like a conference except that there are no pre-selected speakers and no keynotes. Each participant has the opportunity to speak because the sessions are participant-led. The discussion leaders can talk about anything that they think would be of interest and other people will go to their session, or not, based upon their interest in the topic. Both UXCamp and MobileUXCamp are all day events with 24 breakout sessions. UXCamp focuses on user experience design and MobileUXCamp focuses on mobile user experience design. UXCamp DC 2010 was the first un-conference in the states. They had been doing them in London for at least a year prior. Our sponsors are companies with an interest in gaining exposure to the participants as well as an interest in positioning themselves as leaders in the UX space. LdC: What, exactly, inspired you to create this program? GC: I wanted to learn more about user experience design and gain more exposure to the community because I wanted to move into that profession. Although I have more than 15 years of web design and development experience, user experience design was an emerging field. I found that I enjoyed the production and outcome of the event as much as I enjoyed the learning. LdC: So, what has response been like? GC: So far, every UXCamp and MobileUX Camp DC has been sold out with waiting lists. I am also able to get a good group of sponsors who have seen value in supporting the events. To date, there have been three UXCamps and one MobileUX Camp. The next MobileUXCamp DC will be September 15, 2012.
(Black Enterprise) — What does it take to get your tech company funded by people other than your family and friends? It’s a lot harder for tech entrepreneurs than for those who are trying to raise capital for a brick and mortar business. The product and customers are sometimes less tangible. Before launching FileBlaze, a cloud-based file storage and streaming service, Chuck Baker, 41, worked as an executive producer for music artists like Mya and Dru Hill. He realized there was a void in ways to transfer large uncompressed files like music, videos, and photographs, and preview them in real-time from the Web without also downloading other memory intensive software. He created FileBlaze to help prevent piracy, leaks and unauthorized downloads of copyrighted material.
(Tech Crunch) — If Mike and I have it “tough,” the entrepreneurs at NewMe, the first startup accelerator targeting black founders specifically, have it a thousand times tougher with regards to looking like they should work in tech — Women represent 23.8% versus African-Americans at 1.5% of our work force respectively. As Central.ly co-founder Chris Bennett told me, “There aren’t minorities in tech, there just aren’t. One of the problems in the black tech community is that there isn’t yet a community.” Co-founded by Angela Benton (wow, female and a minority — a double whammy) and Wayne Sutton, NewMe attempts to remedy this, by giving Silicon Valley exposure to African American-led startups. NewMe provides its charges with access to housing, resources and mentorship from top Silicon Valley companies (Google is a sponsor and the startups have been working out of Tagged’s offices). Instead of investment, the incubator aims to provide value by fostering a supportive community.
(Huffington Post) – GenJuice CEO Arielle Patrice Scott decided at an early age that she wanted to be the next Mark Zuckerberg. Like Facebook CEO Zuckerberg, Scott co-founded her first company, InternshipIn, while in college. Unlike Zuckerberg’s startup, however, Scott’s venture didn’t grow into a multibillion-dollar behemoth – by her own admission, it failed – and unlike the famous Harvard dropout, Scott graduated from the University of California, Berkeley, last year. The other key difference: while Zuckerberg, like so many Web startup CEOs, is a white man, Scott is an African-American woman, part of a still-underrepresented group in the tech industry. Last year, 21 percent of startups seeking angel investments were women-owned ventures, while minority-owned businesses made up just 6 percent of entrepreneurs seeking funding, according to the Center for Venture Research.
In the past year, the lack of African-Americans in Silicon Valley has been well-documented. But no one needs a report or study to really understand how much Blacks are lacking in the behind-the-scenes action of the tech space. It’s a deficiency of sorts that doesn’t make sense considering our capacities to tap into the market.
The experience of Kiratiana Freelon, editor for BlackAtlas.com and author of “Kiratiana’s Travel Guide to Black Paris,” may very well reflect the perceptions that deter greater African-American involvement. “Even though I had gone to Harvard, attended the same colleges as these tech superstars [like] Bill Gates or Mark Zuckerberg, I never in my life thought that I could apply my ideas to technology and create something until last year.”
The life changing moment for Freelon came at the SXSW 2010 festival, where she witnessed a pitch event involving a myriad of enterpreneurs who had built web apps and tech companies.
“It made me [ask myself] ‘why am I not considering starting a tech company as well?” she said. “I was always thinking of myself as a blogger, a video blogger or a social media enthusiast. It made me realize that all that tech people were doing were solving problems. Although I didn’t have the tech abilities to code a problem, I still could partner with a tech person to develop an idea that solves a problem and helps people.”
Not only did the experience change Freelon’s approach to her own media career but also ignited her passion to encourage more African-American to pursue tech entrepreneurship as she witnessed the dearth of Black figures representing in tech. With that, her “100% Viable, 1% Visible” project was born. She presented her findings about the lack of African-American participation in Silicon Valley and the opportunities for improving participation at the most recent SXSW festival.
She extrapolated on a 2010 study conducted by MIT MBA student Allen T. Lamb which researched why African-American led companies were so far behind that of its white and Asian-led counterparts. Among other things, the study showed that African-American headed companies are underfunded from the start and many African-American entrepreneurs live outside of tech centers.
“There’s not enough minorities in the Slicon Valley ecosystem – the people who are funding the companies don’t get to know African-Americans personally,” said Freelon. “If you are going to play with the big dogs, you gotta live there, be [amongst] them.”
Today we ask: Where are African American entrepreneurs and angel investors in the exploding high tech industries? This question points to the critical juncture at which Black America transitions from a 20th century struggle for Civil Rights and jobs, to a 21st century mindset that capitalizes upon innovative ideas and invests heavily in seeding rapid-growth entrepreneurial endeavors that produce new jobs as well help diversify the captains who control high tech and Internet industries. (More on this in the upcoming interview with Johnathan Holifield in part four). Economic Challenges Facing Black America Unemployment in Black America is twice that of the nation as a whole. The Congressional Joint Economic Committee report released in March 2010 reveals that “both the unemployment rate and the duration of unemployment increased dramatically during the Great Recession among African Americans.” Among Black teens unemployment has reached crisis levels. (See chart).
Chart created by Mike Green. Source: Bureau of Labor Statistics Black America’s unemployment rate is one key indicator of a crisis condition. Some economists are predicting many jobs will not return and some industries are undergoing a transformation that requires significant downsizing (e.g. U.S. media have laid off a significant portion of its workforce with more to come). That means millions of workers could be transitioning to new careers. Entrepreneurship is the desired path of renovation, restoration, innovation and opportunity when industry infrastructures crumble. Yet, the world of entrepreneurship and angel investing is foreign to most Black Americans, despite the fact that in 2009 alone more than $17 billion was invested in entrepreneurial ventures that created 250,000 new jobs. In the first six months of 2010, African American-led companies were involved in less than 1 percent of funded entrepreneurial ventures (CB Insights report). That’s an ongoing problem that needs to be addressed. Black Enterprise magazine reported last year on the efforts of Network For Teaching Entrepreneurship (NFTE) in an article titled, “Youth Use Entrepreneurship as a Pathway to Success.” While such articles shed a spotlight upon positive efforts being made to address the conspicuous dearth of entrepreneurs in the high-growth technology fields, the stark reality of severely under-represented African American-led endeavors in both the explosive industries of innovation and SEC-qualified angel investing require significant media attention. The reality facing Black entrepreneurs seeking investment (Stats below apply to full year, 2009):
- Angel investments in U.S. companies: $17.6 billion (decrease of 8.3% over 2008)
- Number of companies seeking angel funding: Roughly 395,000
- Minority-owned firms seeking angel investment: 6.2% of total companies
- Entrepreneurial ventures receiving angel funding: 57,225 (increase of 3.1% over 2008)
- Yield Rate (percentage of firms seeking funding that are successful): 14.5% / 14.2% for minorities
- Total active investors: 259,480 (unchanged from 2008)
- Minority angel investors: 3.5% of total angel population
Delineation of investments in technology sectors in 2009. Source: Center for Venture Research (Univ. of New Hampshire) The Center for Venture Research’s report on angel investing in 2009 shows that minority-owned firms had a similar rate of success in comparison to the overall market. Since minority companies were roughly 6 percent of the total number seeking funding, with a success rate of 14.2 percent, the final tally of minority companies that were successful in receiving funding amounted to roughly 6 percent of all the entrepreneurial ventures that received angel investments in 2009. Of those companies, we do not know how many were African American. We do know the Center for Venture Research stated in its report, “However, the small percentage of minority-owned firms seeking angel capital is of concern.” Where are the African American entrepreneurs? I asked Lauran Bonapart of Lauton Capital to respond to the issue.
Lauran Bonapart, CEO
Lauton Capital Group Q: In a recent report, CB Insights revealed that Black entrepreneurs received just 1 percent of funding from angels and VCs in the first half of 2010, while Asians, who make up far less a percentage of the population, accounted for 12 percent of funding recipients. Can you shed some light on what this data means to investors and entrepreneurs? A: I’d be curious to know the number of organizations that were actually seeking the funding. In the past, maybe five years, I’ve only come across two African American-owned organizations that were seeking funding from my company, as opposed to 85 percent Caucasian. It’s very challenging to find African Americans who are owners or minority stakeholders for Internet-based companies. I’ve seen a slight increase in the technology sectors but not so much with Internet-based organizations or health care organizations So, I’d want to know how many organizations were actually seeking funding where only 1 percent of them were funded. Was it 10 companies and 1 percent of the 10 received funding? Well, that’s not bad. If it was 100 … that would be different. So, I don’t know how skewed these numbers are. Q: In your experience are there two few Black entrepreneurs overall or too few who reach a qualified level for investment? A: I absolutely think it’s both. In my experience in this industry, I have come across very few African American entrepreneurs. I can basically count them on one hand. So, I would say that the first thing we would need to do as a community is to really step up to the plate with entrepreneurs who have a great idea, have great management in place and then determine if it is a project that is fundable. Q: Talk a bit about the steps toward getting an idea off the ground. A: I think the first and foremost important step is you have to have that next great idea. It’s one of two things: It’s a brand new concept and a great idea or you’re improving an existing concept that’s out there, something’s already making money … generating revenue. Step No. 1 is do your homework and get feedback that the idea that you have is actually viable. The next thing is, all investors want to see that you’ve put some money into a project. They don’t want to shoulder the risk entirely by themselves. So, between friends, family, colleagues and so forth, you have to bring your idea beyond the concept level. Have a prototype developed or discussions with a larger firm that would be interested in working with you. It’s going to be very important that your business plan is solid, airtight. Exit strategies are involved. You also want to make sure your management team is bringing a ton of experience to the table. Once you get past the, “We have a great idea,” it looks fantastic on paper, and there’s a solid management team in place, at that point you can begin to have discussions with either angels or VCs to determine what type of feedback they’re going to give you to procure funding for your project. Q: If an entrepreneur stems from a background of poverty, poor education and the relational family is similarly situated, what steps can they take to overcome those types of challenges in getting their idea to a level of funding? A: Wow. That’s a great question. I believe, in my experience, it’s all about the idea that you have. If you have a great idea and a great concept, you can overcome poor management in a myriad of ways. If you have a great idea about enhancing an existing concept or existing product, it’s going to take a lot of research and legwork, not necessarily money. But you have to be passionate about what you’re doing and you have to have people you can bounce ideas off of; and you’d be surprised as to how many people would help you in the industry with just a quick phone call. So, it’s about knowing who to go to, finding the people that are relevant in the industry that you’re in; and I don’t think any of that pertains to your poverty level or educational background.