We explore the financial side of these companies and unravel whether or not traditional funding paths are also avenues for them and if so, which ones and to what monetary extent.
We learn that black founders are their own friends and family round. Self-funding an average of £14k compared to the £9,500 average they raise from Friends and Family (47% more) tells us how a very standard ‘first cheque’ and funding source for the average founder isn’t equally available to them and how much further these founders have to take their companies themselves.
A Caribbean proverb
He who does not seize opportunity today, will be unable to seize tomorrow's opportunity
How Much Have They Raised?
The total capital raised through investment by 80% of the founders is
The average amount raised is
“MכNI Nכ DE AKS IN KכMPIN USAI I KכMכT”
Money doesn't ask ask its fellow money where it comes from.
Self-Funding and the Family & Friends Round?
88% of the founders self-funded part of their ventures. Eighty-eight.
On average, founders self-funded
What’s also interesting is that self-finance among these black founders was not synonymous with ‘family and friends round.’ Only 22% of Black founders relied on friends and family for early financial support - precisely 25% of the amount who self-funded their venture. Only one of our founders who raised money from friends and family didn’t self-fund their venture.
On average, founders raised
It saves founders having to pitch external investors, where a lot of time is consumed, and rejection faced so it could be perceived that 78% have started without the advantage that many others have.
Black Founders and Grants
Black Founders and University Grants
A Ghanaian Proverb
“You become wise when you begin to run out of money”
Black Founders and Angel Investors
Black Founders and Venture Capital
Black Founders and Startup Loans
Startup loans, guaranteed by the government, appear to be the next popular commercial avenue for Black founders (14%) after angels, syndicates and venture capital.
As positive as it is to have accessible capital, a Startup's loan is a personal debt which has to repaid regardless of the financial status or success of the company.
Black Founders and Crowdfunding
Angel Syndicates, Banks & Family Offices
The Diversity of Investors Currently Investing in Black Founders in London
The number of investors, currently invested in this cohort of Black founders is 159. Their diversity is telling as it further reinforces the need for consistent efforts in the investment community to review their outreach, hiring policies and unwavering commitment towards investing in a more representative workforce.
38% of investors currently investing in Black founders are people of colour. Black investors are more than a quarter of investors, with female investors comprising a fraction less than a quarter, at 25.79% and 24.53% respectively. Investors from the LGBTQIA+ community are one-twentieth of the total with Asian investors at 6%.