Equal Access to Capital: The New Civil Rights Movement

The importance of context cannot be overstated. Considering the broader picture, I recognize my own advantages: I was born male, in a nation with significant global influence, during a period of economic prosperity, to parents who both completed college educations, all within a middle-class environment.

I could easily have been born in a prior era when my father faced explicit discrimination, barred from certain spaces based on his identity. Even presently, my mixed heritage and appearance, which doesn’t strongly align with conventional perceptions of “Black,” has afforded me certain privileges.

However, despite these advantages, I am also convinced that my Black ancestry presented challenges when seeking venture capital. This reality contrasts with the core principles often espoused in Silicon Valley: a dedication to perfection and continuous improvement.

Currently—and data substantiates this—individuals who identify as white males possess an inherent advantage when attempting to secure venture capital funding. This observation does not diminish the accomplishments of successful white male entrepreneurs, but it does highlight the relative scarcity of Black founders achieving comparable success.

As a country, we understand the benefits of fostering entrepreneurship across all demographics: entrepreneurs generate employment, drive innovation, and help us maintain our competitive standing on the global stage. It is in our national interest to make entrepreneurship as accessible as possible to everyone, yet we have fallen considerably short of this goal regarding both race and gender.

Following my graduation from UC Berkeley, I relocated to southern China. While my decision-making at the time was partly intuitive, I consistently felt that a large corporation would not offer me equitable treatment due to my race; I believed my path to success lay in entrepreneurship and establishing my own company. China, rather than the U.S., appeared to be the more suitable location for this endeavor.

I became captivated by the entrepreneurial energy of China. Surprisingly, as a foreigner, I didn’t feel evaluated based on my race. I was perceived as an American capable of generating business opportunities, and my value was assessed accordingly—a refreshing experience. Inspired by the opportunities available, I launched a successful import and export business in China, eventually employing over 30 people. I thoroughly enjoyed collaborating with factories and observing the creation of the products we use daily.

During that time, my clients were primarily larger retailers and brands based in the U.S. I observed the expansion of Shopify and how this straightforward e-commerce platform, combined with marketing tools like Instagram, enabled small businesses to sell and promote their products in ways previously accessible only to larger companies. However, I recognized a lack of a comparable solution for small businesses seeking access to extensive supply chain and manufacturing resources.

This realization led me to establish The/Studio, a custom manufacturing platform designed to provide small businesses with access to factories, enabling them to produce products in smaller quantities without the complexities and risks typically associated with manufacturing—similar to the capabilities enjoyed by larger brands.

Initially, I was unaware that raising venture capital was even an option. This is where my racial background became a hindrance. Those familiar with the venture capital landscape understand its existence and how to navigate it.

Those less connected are often unaware of its potential to accelerate company growth, let alone how to access it. When capital is a limited resource concentrated among a select few, it creates elitism and cronyism. I believe this contradicts the fundamental principles of Silicon Valley and hinders America’s ability to lead in the global entrepreneurial arena.

By 2016, I had bootstrapped the company to eight-figure revenue without external funding. We had a team of over 100 employees and were profitable. I understood that a significantly larger opportunity existed—the same one Shopify had capitalized on—but I felt constrained by a lack of financial resources and, at the time, the necessary expertise to scale the business responsibly.

It was then that I realized venture capital was essential to fuel further growth for a technology company at that stage. Not solely for the financial investment—though that was helpful—but also for the guidance and counsel that often accompany it.

Consequently, I moved to San Francisco. I was optimistic that my company would easily attract millions of dollars in venture capital—after all, I frequently read about companies securing substantial funding, even tens of millions, with only a concept (and sometimes a flawed one). I had demonstrated my entrepreneurial capabilities by already building a substantial business with a large TAM, and a product that was live, profitable, and ready for expansion.

I began with introductions from a college friend and a former VC to their previous colleagues. Following the conventional Silicon Valley approach, I leveraged each introduction to secure another. I soon realized that venture capital involved a significant social element—and I was about to engage in it for two years.

Throughout this process, I must emphasize that I never encountered overt racism; everyone was polite and respectful of my time. However, during pitch meetings and VC events, I experienced a similar feeling to entering a high-end country club or a luxury store on Rodeo Drive. It was evident that the venture capital community—and the select entrepreneurs they favored—formed a tightly knit elite who were uninterested in outsiders.

An atmosphere of arrogance, elitism, and exclusivity permeated every interaction. They employed a specific manner of speech, sought cues regarding your network connections—and the moment they discovered you were not part of their inner circle, the meeting effectively concluded. This contrasted sharply with my understanding of Silicon Valley’s ideals. I had envisioned a meritocracy where any talented, hardworking entrepreneur with a compelling idea could secure funding and achieve success.

In reality, admission to this circle was heavily influenced by race, gender, and university affiliation (even UC Berkeley was not highly valued). If you were not white, male, and a graduate of Harvard, Stanford, or an Ivy League school, you had to persistently pursue your vision for years to gain entry.

The/Studio ultimately secured an $11 million Series A—after 18 months, 150 meetings, and 145 rejections. Consider that again. I was primarily pitching to white male VCs. Their preconceptions and lack of existing connections often resulted in a “no” before the meeting even began. The broader data strongly suggests a racial component to this, as does my own assessment: approximately 120 of the VCs I pitched were white, and we received zero term sheets from them. Thirty were ethnic minorities, and I received five term sheets, a success rate of 17%.

Two years later, I have become part of that exclusive group of entrepreneurs who have raised a significant venture capital round. I now have an insider’s perspective on Silicon Valley. There are genuinely brilliant investors and entrepreneurs in Silicon Valley, and the data supports this; the number of VC-backed companies that go public in Silicon Valley far exceeds that of the rest of the nation for good reason.

However, I have also observed many incompetent investors who are investors solely due to their connections, and entrepreneurs who are not the most exceptional who receive funding because of who they know. Furthermore, I have met many individuals who would be excellent investors but will never have the opportunity, due to their lack of connections and their appearance. Similarly, I know many talented entrepreneurs, as capable as those who have taken major companies public, who will not secure VC funding due to the same reasons.

I believe there is a deeply ingrained perception in Silicon Valley that individuals with a certain appearance and background are the best entrepreneurs. The system reinforces this belief through a positive feedback loop: the VC structure allows them to profit from 10% of their investments, with the other 90% being acceptable failures.

Investing in someone outside their social circles carries the risk of scrutiny from their partners, while investing in someone with strong Silicon Valley credibility avoids such challenges, even in the event of failure. This is simply part of the process.

VCs are human, and with billions of dollars to deploy and thousands of entrepreneurs seeking funding, selecting a few each year makes it easy to choose the path of least resistance and invest in people they know. These individuals are generally white males. This becomes a self-fulfilling prophecy: statistically, if you invest primarily in white males and a few succeed, investing in fewer people of color or women will yield even fewer successes. This bias becomes embedded in mathematically “objective” decision-making.

We saw a similar issue begin to resolve for women in the last decade. Ten years ago, very few female entrepreneurs raised VC money—823 women-owned businesses, according to a recent Forbes study. While female-led VC-backed companies are still underrepresented compared to male-led ones, their numbers have increased significantly; over 3,450 as of 2019, according to the same study. Women did not become more intelligent in ten years; pressure was applied to VCs, and they became less narrow-minded.

They recognized that women make excellent entrepreneurs—and investors, too. Over the past decade, more VC firms have begun hiring—and being founded—by women, although even now it remains a modest 11%.

But what about the racial divide? I know a brilliant Black man with a master’s degree in electrical engineering and computer science from a top-five engineering school, who leads an engineering team for a company that has raised hundreds of millions of dollars and has built a high-tech startup serving enterprise customers, generating over $1 million in annual revenue and is profitable, all without external funding. I am confident that if he were a white male, he would have already secured significant VC funding. He has not.

Again, I don’t believe this is a matter of overt racism. But he likely isn’t accepted or comfortable in VC social circles; he probably lacks confidence in his ability to raise money; he hasn’t seen others who look like him succeed. Because of these factors and his lack of the traditional “entrepreneur look,” he would likely be dismissed by VCs.

However, change also begins with entrepreneurs. For example, we recently launched Supplied, a product that allows small businesses and boutiques to purchase products wholesale directly from factories in China. Approximately 95% of our customers are women—and 60% are people of color.

We didn’t intentionally create a product for this market, but once they embraced it, we embraced them. Initially, my board, which is entirely white and male, didn’t fully understand this market and was somewhat cautious. I don’t blame them; their assumptions and initial concerns were not malicious, they simply lacked the life experience to understand our customer.

But I did, at least regarding the racial challenges faced by our customer base. I was convinced there was a business opportunity because I know many women of color who had similar experiences and aspirations as our customers, only to be excluded by prohibitively high prices on other “wholesale” platforms.

I also recognized my own inability to fully understand our customer base and the fact that my team lacked the diversity to truly understand them. Therefore, I deliberately focused on recruiting more women into our organization. I am proud to say that my executive leadership is now 33% female, 33% Black, and 77% people of color. The team running Supplied is predominantly female, mirroring our customer base.

Both The/Studio and Supplied’s heads of marketing are Black women, one working from Nigeria and the other from Ghana. Our diversity numbers are better than almost any tech company I’ve encountered. Diversity isn’t something we merely discuss; it comes naturally to us, because diversity is inherent to my perspective.

Silicon Valley has achieved remarkable outcomes, and I don’t want to unfairly portray it as a racist institution deliberately excluding minorities and women. But due to numerous factors—including overt racism, historical circumstances, and human nature—the fact remains that Silicon Valley does not reflect our nation’s diversity in terms of race and gender. Not yet.

Our country is becoming more diverse, and the rest of the world is growing wealthier. For Silicon Valley to maintain its position as a beacon of innovation, it must become more diverse to better understand the United States and emerging markets. This doesn’t need to be a zero-sum game where increased representation for people of color diminishes opportunities for incumbents. In fact, it will foster greater competition, with a more diverse perspective on the world, leading to better returns and opportunities for all.

Black founders and other underrepresented groups also have a responsibility to persevere and pursue entrepreneurship and funding, no matter how challenging it may be. This generation will inspire—and employ—the next. The more Black people who secure funding, the more Black entrepreneurship becomes normalized, creating a positive cycle of encouraging investment in Black founders and inspiring more Black individuals to pursue entrepreneurship.

I firmly believe that equal access to capital and entrepreneurship is the defining civil rights movement of our time. We have the opportunity to create genuine financial and social equality in Silicon Valley and globally, while simultaneously shaping the future.