|NewMe Community Meetup, Washington, D.C.|
December 16, 2012
The growth in the number of computer technology and programming groups launched by African American females is nothing short of amazing. In the past year, BlackGirlsHack, BlackGirlsCode, and Black Women in Computing (BWiC) have gained significant traction. Interest in minority tech firms has been growing and African American females are leading the charge.
For those of you not familiar with these efforts, let me note that BlackGirlsHack seeks to "bring the black tech community around the country, to help black founded startups and non-profits develop the mobile and web apps that they need to take their businesses to the next step, and to benefit a local non-profit with the proceeds from our events." Black Girls Code wants "to empower young women of color between the ages of 6-17 to embrace the current tech marketplace as builders and creators," and Black Women in Computing "is an online community created to provide online support, resources and to increase the number of black women in computing."
Signals that this is significant are visible. For example, eighty percent of the attendees at a recent meeting for the NewME Accelerator Project were African American females. The NewMeAccelerator works to "accelerate, educate, and empower underrepresented tech talent around the world." Of course, it is quite natural that NewMe have an affinity for African American females. It was founded by one, Angela Benton.
Unfortunately, the capital needed to support these companies is absent. As has been noted before, the performance of venture capital firms in financing high potential tech firms run by African Americans in general and African American females in particular, is abysmal. According to one source, "Venture capitalists invested $6.5 billion in 890 deals in the third quarter of 2012, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters." My research shows that very few of these dollars went to companies founded by or headed by African American females.
This may reflect a lack of minority participation in the industry. The National Venture Capital Association (NVCA) looked at the demographics of the venture capital industry and found the industry to be 87 percent white, 9 percent Asian, and 2 percent black or Latino.
Given the increase in activity by tech savvy African American females, I think the crowdfunding provisions of the JOBS Act provide an opportunity to raise startup capital from a community of supportative small scale investors, without having to go through venture capital firms. Crowdfunding is "Open Source Financing". It allows firms to raise money using the internet to efficiently and effectively manage the capital raising process, without needing to seek funding from organizations that have, though their employment practices and business funding track record, shown themselves to be biased. The crowdfunding provisions of the JOBS Act allow start-up and other companies to sell up to $1 million in equity, or ownership shares, in their business.
The potential benefit to these African American women run firms, and to the country, is huge.
William Michael Cunningham is an economist and social investing advisor. He is the author of The JOBS Act: Crowdfunding for Small Businesses and Startups. http://www.amazon.com/The-