The Striking Decline of Venture Capital Funding for Black Founders in Brooklyn

Since its inception in 2017, venture capital (VC) investment in companies founded by individuals of color, particularly black entrepreneurs, has been a topic of interest and concern. According to Crunchbase News, the deal count for companies with one or more black founder has ranged between 1.8% and 2.6%, while dollars invested have fluctuated between 0.8% and 1.3%. However, recent trends suggest that this trend is reversing, with a significant decline in VC funding for black founders in Brooklyn and beyond.

The latest statistics from Crunchbase reveal a stark reality: the number of deals closed by black-founded companies has plummeted, with dollars invested decreasing by as much as 63% in the second quarter of this year compared to the same period in 2021. This decline is all the more striking considering that overall VC funding has only decreased by 23% over the past five years.

Experts point to a backlash phenomenon, where those in power (predominantly white individuals) are consciously or subconsciously attempting to re-establish norms that have historically favored them. The result is a significant slowdown in investment and growth opportunities for black entrepreneurs.

In an effort to address this issue, IK-XL, a pilot program aimed at supporting overlooked founders, has partnered with Boston-based Visible Hands, another accelerator focused on providing resources to underrepresented founders. This collaboration aims to bridge the gap and provide much-needed support to black entrepreneurs seeking to launch and scale their businesses.

The decline in VC funding for black founders is not unique to Brooklyn, but rather a nationwide phenomenon that requires immediate attention and action. By acknowledging this trend and working together to address it, we can create a more inclusive and equitable entrepreneurial ecosystem where all founders have access to the resources they need to succeed.

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