Diversity Isn't a Priority for Investors, Study Shows
Photo Credit: AfroTech

Diversity Isn't a Priority for Investors, Study Shows

Investors aren’t making diversity a priority–at least according to this latest report. 

A new report released by Morgan Stanley on Tuesday found that investors—especially white men—say that investing in underrepresented entrepreneurs is not a factor when considering investment opportunities.

The report, “The Growing Market Investors Are Missing The trillion-dollar case for investing in female and multicultural entrepreneurs,” explores the barriers diverse business owners have faced raising capital and asks why investors are missing these opportunities.

Nearly 40 percent of men say that investing in women-owned businesses is not a priority, compared to only 7 percent of female investors. The results also show that 31 percent of white investors say they do not prioritize investing in minority-owned businesses.

The Morgan Stanley report reveals investors do not believe there is a funding gap. About eight in 10 investors say that underrepresented entrepreneurs receive the right amount of capital or more than their business models deserve.

Research shows investors are two times more likely to review non-minority businesses than minority-owned businesses.

The median investment by equity investors is about $1 million. However, for women and minority-owned businesses median investments are only $213,000 and $185,000, respectively.