Black founders see a decline in funding during economic downturn – Marketingwithanoy

It’s confirmed – Black entrepreneurs saw a dramatic drop in funding this year as investors continue to pull back.

So far, new Crunchbase data shows black startups received $324 million in VC funds in the second quarter, a sharp drop from the $1.2 billion received in the first quarter this year and significantly less than the $866 million that the founder cohort raised in the second quarter of last year. In total, Black founders have received more than $1.5 billion in capital so far this year, compared to the more than $2 billion received this time around last year. Funding at all levels will follow under 2021.

Unfortunately, this is not surprising; valuations are falling and deal volume is shrinking this year as investors pull out of the excesses of 2021.

It’s not a new concern that in times of economic hardship, some investors withdraw into their respective networks to fund what is considered safe and secure to them — and those networks are often not filled with large numbers of black founders.

“People tend to default to what they know and what is safe,” RareBreed Enterprises founder McKeever Conwell told Marketingwithanoy. He added that the fall in funding is worrying, but not surprising during this economic downturn. “Investing in founders of color, as we have seen in decades of venture capital, is not what is considered safe.”

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