Over the years, I have had a chance to hear many people talk; some brilliant some not, I have listened and interviewed people with start up ideas and growing businesses and the struggle to break to the next level. In that period you listen to people and you can tell those committed and those not, those going places and those just waiting time.
Until very recently (in Kenya at least) starting a business meant using your savings and shoe stringing, pooling money with friends and getting money from family members to start and sustain your business.
Financing your business through Venture Capital and Angel Investments came into fashion in Africa tech three years ago. The starting of the tech spaces brought together some Western immigrants with idle money, others without, some educated, others not.
I remember attending a meeting about rising Kenyan tech companies and in a room of about 20, there were only two black women and a black man. Others were western immigrants running companies in Kenya and the going conversation was that they had sufficient money and all they needed were ideas.
The best part is that even my fellow woman noticed the trend and wondered if there were no Africans in tech doing good stuff. Believe me when I say that all those ideas sounded sexy, but had no was of making money or breaking even in the next five years.
We wondered if such enterprises were being run by black people, would they get attention from a giant multinational with bottomless financing capability? It led me to ask; is VC funding inherently racist?
Get me right, at times people feel comfortable with people they know or know where they can get them from if everything went south. Maybe thats what is used to justify tribalism.
I have heard stories of one company getting VC funding and a relationship is established. The company is then sort of made the local contact person and the go-to person in determining whether the VC invests in local companies. The story goes like; anytime the VC made enquiries and the company was headed by local chaps, the local contact would discredit the company and dissuade the VC from funding but you can guess what happens when the reverse is the case.
I talked to a bunch of people on the race specific question. These are some Kenyans running tech companies and have had experiences with international VCs. I know I can be unhinged but the comments I got were very honest and sad.
For a more tempered news article, you can read this article on how business challenges hinder VC funding and can continue to the comments below.
Here are the comments I got to the question- is there any connection between VC funding and race? Do whites find it easier to raise funds?
From personal and painful experience the black man is at the bottom of the foodpile when it comes to EVERYTHING – venture capital, prospecting, sales, costing …
I think the only person who’d have it harder is a black woman
It’s more about your network and access than it is about your skin color. Many Kenyans who are grads from Stanford or Harvard have an easier time raising funds than an mzungu who didn’t go there.
Its a 50-50 thing. Race matters when you are playing in some mission critical fields and very few people want a black dude driving a mission critical boat, but race is also waning as money diversifies and networks grow and the number of black investors increase and white investors realise that there are some mad skills with black people too.
It depends. looking at Fanisi, TBL, Aureos, Savannah, Fusion Capital investments and you will realize that the majority of ivestees are black/notwhite
I loved @69mb’s quote below, its probably the evidence you would ask for.
There are one too many cases of Kenyan start-up founders using funding to enrich themselves e.g. buying a car or a piece of land.
It’s a complicated situation. Here are some reasons I said it’s complicated.
1. It’s possible that some people “of the same colour” with the startup/grant requester don’t want the business/idea to fly. Let me paint a picture. Imagine a funding body/international donor/grant provider (these are all VCs with varying interests) asking a group to vet a proposal. Person(s) in the group, regardless of their colour(s), might not want to see the applicants win the project. The persons are blinded (via the act of jealousy) and couldn’t think of the consequences of not letting the startup/grant requester get the funds. One of such consequences is that they have just hindered growth (be it personal, environmental, e.t.c.). This problem is prevalent among the blacks – they’re shallow thinkers.
2. It’s also possible that the VCs have specific interests or ulterior motives, such as only wanting growth and development among some kinds of people (race) and their environment (their places of abode). Hence, if a project will benefit the “less preferred group” more than their preferred group (which you meant by race), they won’t want to fund such a project.
3. The VCs need to serve the interest of their bosses (BB, Uncle Joe, the Western Power, call it any name). And the interest is controlling what knowledge, growth, technological advancement and resources are available to Africa. They come here to exploit us yet they determine who gets what in return.
In conclusion, Africa is plagued with all kinds of challenges. The VCs know their targets.
I thought it was my imagination, but your article articulates what Ive been through these past few months as I seek funding.
I am a woman and black. And even in my nightmares i never thought discrimination would follow me to my doorstep here in Kenya.
But here I am.