1/ California Takes Naming and Shaming Approach to Venture Capital Equality

For context, this law affects all venture capitalists funding startups since they all do business in Silicon Valley. They have to state loudly and proudly who they fund, the race and gender of that person or persons who own the startup.

Estimates show White male startup founders receive 98% of venture capital funding.

Yet, people like Edward Blum and Nathan Roberts sue grant programs awarding five figure funds for Black, female-led startups. It is tough to wrap my head around the logic of the people who have the most complaining and showing righteous indignation when people who have the least are given a small chance at success. Someone, make it make sense.

2/ AfroTech Features Calendly and Its Meteoric Rise to Billion-Dollar Status

Calendly is one of my favorite apps. I use it to schedule all of my client and consulting meetings. It never fails to remind me and my clients via email and text. It’s great to support Black-owned businesses but to see it reach such a high status truly gives me hope for a better, more inclusive future.

3/ Video Email App Sells to Atlassian for $975M Despite Recent Layoffs

4/ Trucking Company Owner Sues Online Platform Supporting Diverse Startup Founders

Nathan Roberts owns Freedom Truck Dispatch. He is suing Progressive and grant-listing platform Hello Alice because it offered $25,000 in grant funds to a Black, woman-owned transportation business.

5/ Apple Makes a Device Stalkers Use to Pursue Targets

This article first appeared in DINT on June 30.

Diversity, Technology, and the Case for Entrepreneurship

Yesterday the U.S. Supreme Court voted 7 to 2 in favor of a judgement that rules race-based admissions structure unconstitutional.

This comes just a few years after a man was choked to death on video for nine minutes by an officer sworn to uphold the law. It also comes in the aftermath of this murder where more attention is being paid to diversity in the form of corporate initiatives and hiring quotas to ensure diverse workforces.

Colder Climate for Diversity Efforts

Many businesses in the digital infrastructure space, such as Apple, Microsoft, Alphabet (Google), Twitter, and Meta (Facebook) committed to ambitious diversity metrics in 2021 and 2022. The year 2023 brings a growing push-back against initiatives aimed at diversifying anything, calling such efforts w*ke.

Along those lines, legal scholars organizations say the recent Supreme Court decision banning race-based admissions spells death to diversity, equity, and inclusion efforts in corporations. To avoid legal issues, pundits say organizations need to rename their DEI programs to Title VII Compliance Departments and change the title of DEI Director to Compliance Director.

No matter what it’s called, initiatives to promote fairness and equality have an important place in corporate structures, say researchers.

• The likelihood of financial outperformance (beating competitors) increases by 36% when workforces are ethnically diverse (McKinsey and Company)

• 45% higher revenues (from innovation) among companies with above-average total diversity (Boston Consulting Group)

• 75% of organizations with diverse decision making teams exceeded their financial targets in 2022 (Gartner)

What’s the Solution?

Marginalized groups have always been resourceful and thrived even in the worst environments. Black Americans continue to excel in certain industries despite facing focused and continual programs and efforts to stop their progression and access to the American Dream.

Race-specific Institutions

It is through those experiences that historically Black colleges and universities (HBCUs) thrived. Some have said there’s no reason for HBCUs since racism is gone from our society. As we see from yesterday’s ruling, this is not the case. HBCUs come to the rescue for Black and Brown students subject to inequitable admissions practices in the nation’s most respected educational institutions.

HBCUs tailor programs to the unique needs of their students to get them access to high-paying jobs in tech, as we revealed in our coverage of Bowie State University’s Tech Internship Program.

Once Black workers do reach the goal of employment in tech, they’re not treated well, says a recent study from Pew Research.

Black workers in Science, Technology, Engineering, and Mathematics (STEM) experience discrimination in the industry.

• 72% report facing discrimination in recruitment, hiring, and promotions.

• 73% disclose being less likely to have access to quality education to be prepared for these fields.

This leads some Black and Brown workers to get creative in the quest for access and advancement.

Entrepreneurship as the Corporate Alternative

The opensource tracking tool Layoffs.fyi reports 160,000 tech employees lost their jobs in 2022. Many of those laid off have turned to entrepreneurship and are in some cases competing against their former employers, creating what the Wall Street Journal calls “revenge startups.”

Black and Brown employees leave for different reasons, such as lack of access to substantive advancement opportunities.

Subjective Performance Reviews

A full 71% of Black tech professionals report dissatisfaction with the performance review process (Valence and Russell Reynolds Associates) pdf.

Examples of subjective performance review comments:

• Give just 2% more and we’ll review next year.

• You have to make people want to work with you.

• Be more of a team player.

In the face of this lack of opportunity for advancement, Black tech professionals open their own firms but are met with another obstacle: funding.

Less Startup Funding

For instance, TechCrunch+ reports Black founders gained access to just 0.69% of the $45 billion of funding invested in startups in Q1 2023. For context, CNBC reports venture capital funding dipped $365 for all startups last year but for Black startups, that number was 45%.

While several entrepreneurs have access to programs that train and assist startups, some programs targeting Black startups offer low amounts of funding. Google’s Black Founders Fund gives startups $150,000 cash and $100,000 in Google Cloud credits.

Pundits estimate startups should expect to raise $500,000 to $1.5 million in its first round of funding.

Actions of Investors Communicate a Clear Message

“The investors are primarily white and male and usually come from affluent communities, which means that they have very specific experiences and have been exposed to very specific things and are comfortable with very specific things,” said Marlon Nichols, co-founder and managing general partner of MaC Venture Capital to CNBC.

With only 0.69% of available funding going to Black entrepreneurs, the actions of the venture capital community sent a clear message to Black tech startup founders like Nichols. Here’s who he describes that behavior driven message:

“We’ve always invested in white men and that’s what we’re going to do right now. That’s where we’re comfortable. That’s where we know and believe that we’re going to get the return. This diversity thing is cool, we’ll pick it back up maybe, you know, once we’ve weathered this storm.”

What’s Happening in Tech

Palate Cleanser

A cat named Fish wins Pittsburgh’s cutest pet prize. It’s the neckerchief for me!