One of the major issues affecting black startups is venture funding. Multiple reports have shown that black founders receive less than two percent of venture funding, thereby making it difficult for them to sustain and grow their companies.
The lack of funding or opportunity to raise funds at a decent interest has led to the collapse of several black-owned companies. This has also affected the building of generational black businesses in the black community.
Many black founders have also raised racism issues when it comes to VC funding, alleging that they are discriminated against. One of such founders is Matt Joseph, who is the CEO and founder of Locent.
According to him, venture capitalists are under pressure not to appear as racist so they claim they only invest on merit and the company. This, he believes, is a strategy to avoid race issues entirely. He opined that venture capitalists do not fully appreciate the challenges black founders go through to grow their firms.
Struggling to catch the eye of venture capitalists, Joseph took to Twitter to slam racism in Silicon Valley ahead of demo day about the elephant in the room.
“I always put my business first. But let’s stop pretending like race isn’t an issue,” Joseph told Business Insider. “Subconscious bias is just as damaging as overt bias. And for tech to move forward, these issues need to come out into the open. Not just for founders, but for everyone in the ecosystem.”
“So please, don’t sweep race under the rug when you meet me. Talk to me about it. It’ll help you understand why I’m going to succeed.”
Since then, Joseph has received several offers from investors for Locent, an e-commerce platform powered by text messages. He believes his tweet storm has paid as it has drawn attention to his company and other black founders.
“A big reason why I did it, I was so frustrated after a series of meetings and feeling dismissed,” Joseph told techcrunch. “I wanted people to take me seriously.” Well, it worked. In the last week or so, Joseph has had several productive conversations with VCs, some of whom have made offers.”
“I’ve gotten the opportunity now to connect and meet with investors who maybe I otherwise wouldn’t have,” Joseph said. “The common theme for the investors who have reached out is they viewed it as courageous. In the face of demo day, knowing I would alienate some investors by saying it, that I would take that chance anyway. I think they’re using that as a lens of viewing myself as an entrepreneur.”
He told techcrunch that following his meeting with investors, he successfully raised enough money to grow his firm. Today, his firm has not fewer than 10 people as staff.
Joseph is a graduate of UCLA Anderson School of Management, MBA UCLA Anderson School of Law and has a BA from JD Princeton University.
