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There are more black female entrepreneurs than ever – so why do they struggle to get funding?

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Imagine setting up as an importer of frozen yams – would you get a startup loan? Banks may doubt the enterprise, but they’d be wrong, for the UK is one of the world’s greatest importers of frozen yams – and anyone from the black diaspora would know that this idea would be a goer, says Marian Arafiena, who along with her sister has founded a crowdfunding platform for black-owned businesses.

They launched Rise FundNGO to give space and visibility to black-owned businesses, including yam importers, suppliers of black beauty products, and more, which otherwise might not see the light of day. “The mainstream won’t know we’re there if our voices are not in the room,” says Arafiena’s sister Anita Egbune.

After the Black Lives Matter protests of the summer, both sisters were driven to act. Typically, like many black women tech entrepreneurs, they funded the new venture themselves and are hanging on to their day jobs – Arafiena in strategic planning, with a background in engineering, and Egbune in finance. “We had to be really innovative, the techy bit is something we had to learn,” she says. Banks and venture capitalists have been slow to fund black-owned businesses. “They’ll ask for proof of concept or might say there’s no money in it,” says Egbune. “It’s just good business to get into yam for instance, but these opportunities might be missed.”

They’re looking for corporate allies to put their money where their mouths were earlier this year. “There were many grandiose statements from big businesses who have benefited off the back of historical wrongdoings,” says Arafiena, referring to messages of support for the Black Lives Matter movement from corporations.

She wants big business allies to weigh in with cash pledges and combine with crowdfunding to help get black-owned businesses off the ground.

“It makes good business sense to diversify your supply chain and it’s the right thing to do. We’re making black businesses super visible.”

Women of colour are among the fastest growing group of entrepreneurs, research from the US shows. They’ve faced a double whammy of sexism and prejudice, which has prompted them to go it alone, says Annette Joseph, a tech advocate who founded Diverse & Equal nearly three years ago to flag up opportunities in tech and help companies become more diverse.

“I meet so many people who have had it said to them: ‘You’re only here because you’re black.’ Billions have been spent on diversity, but the glass ceiling is still much lower, career progression isn’t transparent, and you just don’t get the opportunities. I hear that everywhere.” And there is a damaging assumption that when a business ticks a diversity box, standards have been lowered – which is wrong and offensive, she says. “Black professionals I meet are often more qualified than their white peers.”

But the tech sector is an odd mix – young, but still white and male at more senior levels. More widely, black women are under-represented in specialist IT roles, according to analysis by BCS, the chartered institute for IT. While women working in IT are now a record 20% of the total, up from 17% the previous year, for black women it’s a different story – they occupy just 0.7% of IT positions – 2.5 times below their representation in other occupations. Of the 31,000 black IT specialists in the UK, just over a third (11,000) are female, according to ONS figures.

And funders still expect tech entrepreneurs to be white and male, says Patrice Stephens-Sobers, founder of the digital marketing agency Pink Ship: “It’s a cliche but they’re still looking for Mark Zuckerberg.” Stephens-Sobers founded her own agency after becoming exasperated that she wasn’t getting jobs she felt qualified for.

Her complaint is nothing new. British businesses still discriminate against job seekers from ethnic minorities. Last year, a Growth, Equal Opportunities, Migration, and Markets (GEMM) study, funded by the Horizon 2020 programme of the European commission, found applicants from ethnic minority backgrounds had to send 60% more applications to get a positive response from an employer than a white person of British origin. As part of the project, which involved sending out identical CVs under different names, social scientist Dr Valentina Di Stasio, assistant professor at Utrecht University, also found that the UK was the most discriminatory of the five countries studied – the other four were Germany, Netherlands, Norway and Spain.

Small wonder then, says Stephens-Sobers, that it makes more sense to start up on your own. Armed with a PC and a camera, she set up her agency without funding and has since expanded with clients in the US and Canada as well as London. “Raising funds is a struggle – black-owned businesses often take the crowdfunding route.”

It’s not because the money isn’t there, says Joseph – it’s that the pots are actually too big for the type of tech businesses that women are founding. “Typically, black women don’t have loads of support they can tap into. There’s a lot of mistrust. Maybe their businesses aren’t big enough – if investors were willing to come in with smaller amounts – £10,000 instead of £100,000 – that would go far.”

It’s well-known that funding doesn’t flow easily – just 2.8% of venture capital funding goes to women-led startups and there are schemes and grants to address this.

But while tech entrepreneurs often enjoy a busy networking scene, it can be a lonely place for black women, says Jasmine Douglas who launched her business network Babes on Waves this year.

Pre pandemic, she found entrepreneurship events “full of white, overconfident men throwing around big words in a stiff environment” and women-only groups were equally white. “I felt alone and unseen.” Membership of her network will always be a minimum 70% women of colour – and it’s a welcoming place for the 70-odd members: “We feel like family.” She plans to launch a digital platform and is now applying for grants to raise £10,000 to build an app next year to expand her community.

Despite the flow of dispiriting statistics, Joseph believes now is a good time to be black, female and working in tech. Businesses are waking up to the financial benefits of diversity. In the US, capital is already flowing to black women entrepreneurs. “Empowering black women founders is one of the best things we can do for economic equality. To me it seems the easiest way to level an unlevel playing field. I think it’s only a matter of time before UK funders realise the opportunities they’re missing.”

Source: https://www.theguardian.com/careers/2020/oct/29/there-are-more-black-female-entrepreneurs-than-ever-so-why-do-they-struggle-to-get-funding

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