Adeela Carter, left, and Amoye Henry, right, are the founders of Pitch Better, and authored the FoundHers report.O’shane Howard/Supplied
Black women entrepreneurs are facing challenges in receiving funding and financing, according to a new survey of more than 1,500 Black female founders across Canada.
According to the FoundHers report to be released Wednesday, many Black women in Canada who have started their own businesses or non-profits received little help with funding. The report said 43 per cent of for-profit businesses led by Black women have never secured external funding. More than 60 per cent of for-profit businesses have provided up to $100,000 in self-funding to their organizations.
“Our respondents indicated to us that they were open to investment opportunity, but did not know how to get in front of investors who would take them seriously,” said Amoye Henry, a co-founder of Pitch Better Canada.
Pitch Better, a market research firm that supports diverse, women-led startups seeking capital, wrote the report with support from the Canadian Women’s Foundation, the Business Development Bank of Canada, and Brock University.
The ‘problem’ woman of colour is a troubling trope
Black entrepreneurs in Canada facing systemic racism and other barriers to success, new study finds
The report also found the women surveyed are seeking more growth opportunities, mentorship, and community networks.
“Our commitment to supporting diverse founders led us down this path,” said Adeela Carter, co-founder of Pitch Better. “A lack of data often left us with many unanswered questions …. Our report addresses the significant research gap and lack of market information available.”
Some company founders, she said, also felt a lack of support from banks and other financial institutions. Others expressed concern about giving up too much equity in their businesses.
To address those challenges Pitch Better is launching a website that will feature more than 1,000 Black women-owned businesses and non-profit organizations in Canada.
“Our FoundHers dashboard is a centralized place to connect Black women founders to private investors and institutional partners looking to invest,” Ms. Carter said. Tools that simply increase the visibility of Black women entrepreneurs could yield success.
“The perception of a lack of Black entrepreneurs’ activity often correlates with difficulties accessing bank financing or their lack of experience,” the report said.
Raising capital is important for many early-stage companies. Fifty-seven per cent of for-profit founders started their businesses in the last five years, and 45 per cent of entrepreneurs said that their business is in a growth phase.
Black women founders often rely on each other for mentorship, according to Ms. Carter. Solidarity with colleagues is key, as the report notes that many founders feel hindered by discrimination from potential investors and clients. “Facebook groups are examples of great support systems,” Ms. Carter said. “One woman will make her way, and then lean back in to share within the community.”
For Ms. Henry, the federal government can play an important role in supporting the entrepreneurs the FoundHers report focuses on.
“It’s important that government work in partnership with the communities to reduce systemic barriers and enhance Black women’s inclusion at decision-making tables,” she said. “There [have been] clear strides towards acknowledging the barriers exist, and now it’s time to dismantle them by making room for broader and more diverse representation.”
One glaring barrier that the report highlights is a significant wage gap between Black women and men.
“Black women are said to make 79% of what Black men earn and 57% of what all Canadian men earn,” the report said.
“To close the gaps, as a culture, as a society overall, we need to look at the symbiotic relationships between race and status, gender and status,” Ms. Henry said. “If this gap is only addressed through gender alone, Black women will be in tough spots.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.