The Million Dollar Club: One in three Black founders with $1 million or more in venture backing graduated from Black-led accelerator programs. As elusive as venture dollars have been for a majority of Black founders, subsets that took a detour through small Black-led accelerators struck gold at mainstream accelerators. In other words, startups graduating from a Black accelerator were often a signal for mainstream accelerators to back them.
A trend emerges among a small sampling of the most well-funded Black-led companies. An examination by The Plug of 25 Black-led startups, with $1 million or more in venture backing revealed that 31% of founders graduated from Black accelerators before getting backing from notable mainstream accelerators like 500 Startups, TechStars and Y Combinator. After a string of IPOs in 2020, the tech world looked at startups ‘ acceptance to these major accelerators to indicate future success. Hedging this bet might not always pay off, but it is safe to say that for diverse founders it’s often diverse investors and advisors that are first willing to take a chance on their success.
This includes physicist Lisa Dyson, CEO of greentech companies AirProtein and Kiverdi, which incubated at PowerMoves accelerator before landing investments that now total $32.1 million from investors like Kapor Capital and Primera Capital. Hillman accelerator alum SoloFunds, a fintech that facilitates small-dollar loans and savings, has racked up a total of $24 million in funding since graduating from the accelerator.
Jasmine Crowe, founder of Goodr, a food surplus management company first graduated from Goodie Nation accelerator in 2017 before landing TechStars the following year. Goodr now has $1.1 million in funding. Similarly, Switchboard Live, with $2.3 million in funding, founder Rudy Ellis joined NewMe accelerator before acceptance into TechStars in 2015. Other multi-million-dollar NewMe alumni include Piegonly, a service that allows users to communicate with the incarcerated more affordably, went on to graduate from Y Combinator and now has a total backing of $6.7 million.
While there is a track record of many well-funded companies with Black founders that come out of Black accelerators, many are able to court investors and advisors outside of their community from the start. Companies Mayvenn ($43 million in funding) and Squire ($106 million in funding) ¬† went through 500 startups and Y Combinator, respectively. Sound-based authentication platform, Lisnr, founded by Rodney Williams, graduated from subsidiaries of TechStars and has $55 million in funding. Delane Parnell, founder and CEO of esports platform PlayVS incubated with Science Inc and has gone on to raise a total of $108 million.
Even among the companies in this category, there are Black investors. There is yet a third group of Black founders, and the majority in this small collection of companies, that neither graduated from Black incubators or the most competitive mainstream incubators. With investors of all kinds looking to close the funding chasm and address the funding imbalance, the likelihood of being a Black founder with venture backing is only going to increase. Where this funding comes from will hopefully be as diverse as the solutions Black founders create. That suggests that where Black founders have the best chance of finding funding is nearly anywhere from anyone.