What’s the one obstacle that Black entrepreneurs deal with time and time again when putting ideas out into the world? While there are many, funding is perhaps the greatest barrier to entry for startups. When it comes to innovation and entrepreneurship, Black people have especially faced hardships to get the support they deserve when building their businesses. Thankfully, Accenture Ventures is here to change that with its Black Founders Development Program. The goal of the program is to level the playing field and help Black startup founders and entrepreneurs through investment, mentorship, community and more.
The Black Founders Development Program is a new initiative that aims to give Black entrepreneurs a seat at the table to garner wealth and set the foundation for future generations. The goal is to advance their businesses and provide access to venture capital along with valuable connections through Accenture.
In an interview, Accenture Ventures’ Global Open Innovation Lead and Black Founders Development Program Lead Kathryn Ross explains how the program came about, how it will elevate Black businesses and the impact it will make on a global scale.
This interview has been condensed, rearranged and edited for clarity.
AfroTech: What is the Black Founders Development Program and how did it come into being?
Kathryn Ross: When I took over this role about a year ago, I was tasked with creating an inclusion and diversity agenda for our Accenture Ventures organization. I started to do some research to understand what’s happening in the ecosystem, and I came across some research by RateMyInvestor and Diversity VC that stated, in 2019, 130 billion investor dollars flowed to entrepreneurs. Less than one percent of that went to Black founders. That made me pause. That was like a car speeding down the street and you hear the brakes screech.
Research also shows that, for founders of other underrepresented communities, women are at about 2.6 percent of funding. Latinos/Latinx are between 2.0 and 2.4 percent, LGBTQ and veterans are hovering a little bit over one percent, but I kept going back to less than one percent. It wasn’t almost one percent or approximately one percent. It was less than one percent, so it could’ve been .2 or .8 — we don’t know. But for me, that felt like a rounding error. Somebody was going into the cushions of the sofa trying to find some coins, and that was essentially what we got. Combined with the events of the summer — George Floyd, Breonna Taylor and others — it really solidified the need for change. I have to give credit to my leadership because they really pushed me and said, “How and where should we focus?” and I said “Really, it should be Black founders.” When Black founders are successful, it will ripple out to their community as well as other underrepresented communities. That’s how this initiative got started, and we launched it specifically to elevate, embrace and enhance Black entrepreneurs by investing in their businesses and helping them to grow and drive wealth into the Black community.
AfroTech: Why do you think Black founders are underfunded when it comes to venture capital?
Kathryn: I use an analogy that a fantastic mentor of mine told me 10 years ago, and it really has been true: business runs by playground rules. For me, on the playground as a kid, the teacher picks somebody to lead the red team and somebody to lead the blue team, and who do they pick first? It’s their friends. It’s people they know. If the Black entrepreneurs are not in the ecosystem of the people who are providing the funding, they don’t get the funding. Ultimately, that’s one of the major reasons why Black entrepreneurs and founders are not seeing that funding going into their businesses.
AfroTech: What are the top three obstacles in the way of Black technology startup founders?
Kathryn: I think Black entrepreneurs would say funding is number one. And it is true, because if you want to scale your business or add resources to help employees, you need the funding, and it is a significant challenge.
The second one for Black entrepreneurs is an understanding of how the process works. Many entrepreneurs I meet haven’t done the research necessary to understand the playground that they’re on. If you’re going to a VC for funding, understand that VC. If you’re going to an angel investor or you’re looking for a grant, you need to understand the kind of business you have and you need to understand what that funding model means for you. I like to say, “Don’t go dressed to play basketball when the other team is playing tennis.” It’s back to the playground — if you don’t understand what the expectations are from that other team, then you’ve lost before you even walked in the door and you didn’t even know it. So we would like to change the education process.
The third is more on the VC side. They’re not going where the Black founders are. Most of those 130 billion dollars went to New York and San Francisco. But there are fantastic founders and entrepreneurs in Atlanta, Houston, D.C., Chicago, Boston and lots of other cities not on the coasts. If you’re not looking in those places, then you’re potentially missing out.
So those are the three challenges that we need to overcome and that we’re aiming to address with the Black Founders Development Program.
AfroTech: What do you hope the Black Founders Development Program will help the industry achieve?
Kathryn: In terms of the 130 billion invested, if I just looked at dollars and cents and the fact that less than one percent went to Black founders, we’ve got to be able to at least double that. Triple that. Quadruple that. Get it into the solid single digits. If I just looked at dollars and cents, I think that would be absolutely fantastic.
The other piece is that, since this past summer, billions of dollars have been pledged to help Black founders. But in order to really impact that community, support beyond just monetary investments is needed. Writing a check is important, of course, but guidance, mentorship and strategic connections to others in the community are equally critical. This is one of the things that Accenture and our corporate venture capital arm brings to the table. We have 500,000 practitioners at Accenture around the world who can help entrepreneurs kick the tires and validate their idea, refine the product-market fit and introduce them to our enterprise clients and ecosystem partners.
AfroTech: Is there a specific industry or location for these founders that Accenture is looking for?
Kathryn: It’s not about a specific industry or location; it’s about an idea. What is the business problem that you’re trying to solve? We’re seeking to invest in early-stage software technology-focused startups that offer differentiated solutions to challenges that our clients are facing now or will face in the future. For example, a timely challenge for global organizations in the wake of the pandemic is around closing the skills gap. Solutions that can help companies address the shifting labor market or drive bias out of the hiring process are interesting to us.
From the location standpoint, we have an initial focus on Chicago, D.C. and Atlanta, where we’re creating a network of organizations to partner and collaborate with. That way, if a founder reaches out to us and they’re not ready for a VC, we can at least help facilitate introductions to marketing organizations, pro-bono legal services or others in the ecosystem to help them on their journey. It really takes a village, and we’re committed to doing our part to help Black businesses flourish.
AfroTech: Can you discuss the Accenture Venture Model for change?
Kathryn: Let’s be honest, venture capital has operated very, very successfully for decades. But the racial inequality in the venture capital system is often debilitating for even the most promising technology entrepreneurs and their startups. Whether it’s a result of conscious or unconscious bias, a lack of resources or other factors, we believe the VC industry is missing out on a tremendous source of untapped innovation and value.
I spoke a little bit about this already, but what we can uniquely bring, as a corporate venture capitalist, is the ability to help entrepreneurs incubate their idea and refine the product-market fit. We can do this because we’ve got the technology practitioners and domain experience. Traditional VCs don’t have that capability in-house to innovate at the engineering level. That is the change that we’re bringing to this model. Yes, we’re going to invest, but the support we’re providing goes far beyond funding.
AfroTech: How can founders from the AfroTech audience get more information about the program and get funded?
Kathryn: First and foremost, you can find me on Twitter and LinkedIn. If you go to the Black Founders Development Program page on the Accenture website, you’ll find some information on the program, and at the bottom of the page, there’s a “Contact us” button. If you are an entrepreneur, click on that button and tell us about your idea. The three things that we’re looking for is, number one, what’s the problem that you’re solving? Number two, what’s the market? Are you solving that problem on a $10 million market or a $100 billion market? Then three, what’s unique or differentiating about your solution? What do you bring that’s different from what already exists in the marketplace? Those are the three things that we absolutely want to know.
AfroTech: What do you hope the Black Founders Development Program will look like in 5 years?
Kathryn: To be truly honest with you, I hope it doesn’t need to exist in five years. I hope that it becomes a part of everyone’s investment thesis. I hope that in looking for the best technologies out there, VCs go to all of the places in which founders and entrepreneurs exist, such that if you look at their portfolios, you have a melting pot of entrepreneurs within it. That would be the ultimate goal five years from now.
AfroTech: Is there anything else you would like to add?
Kathryn: The time is now. It’s through tough times — like in the midst of a pandemic and Black Lives Matter — that innovation really flourishes. There’s a willingness on the part of organizations and corporate VC firms to fund and elevate the Black community. If you’ve got an idea to take to market, there’s an opportunity right now to validate it. Don’t let it go by. It won’t be here forever.
This piece is brought to you in partnership with Accenture.
Accenture sets the model for change. The company is doing the work by researching, having conversations, securing partnerships and more to address inequities in venture capital across the Black community. The Black Founders Development Program stands out from other VC programs because it will offer top-notch strategic investment, community engagement and thought leadership, which are three components that can help scale your business for success.
Want to learn more about the program and how you can monetize your idea? Visit the program page and submit your next big idea.