Are Minority Entrepreneurs Adequately Represented in Startup Arena?

What a difference a year makes. Last year the question was “Where are the minority entrepreneurs?” It was highly motivated by the 2010 CBinsights Venture Capital Human Capital Report, which stated that only 1 percent of minority tech startup founders were founded by African-Americans. But the conversation about minority entrepreneurs didn’t only apply to African-Americans, it also included women and Hispanics. The dialogue reached its peak by various snippets from the CNN’s “Black in America 4” documentary and niche tech blogs.

Fast forward to today and, although we don’t have an updated CBinsights report, I believe the search for minority entrepreneurs is over. I’m not saying there is an equal amount of minority entrepreneurs launching startups, but now there are global minority Meetups and exclusive accelerators, and my inbox is overflowing with young and old minority entrepreneurs looking to launch the next Instagram, Pinterest, Facebook, or Twitter.  Now it’s not an if but when we’ll see the next Instagram or Pinterest founded by a “minority.”  Regardless, some people are tired of the conversation and still wonder if there a problem at all.

For that let’s take a look at some data:

Women and Minority Entrepreneurs and Investors

In 2011, women angels represented 12 percent of the angel market. Women-owned ventures accounted for 12 percent of the entrepreneurs that were seeking angel capital, and 20.5 percent of these women entrepreneurs received angel investment in 2011. While the number of women seeking angel capital is low, the percentage that receives angel investments is comparable to that of the overall market. These data indicate that when women do seek angel capital, they lead the market yield rate by 2 percent.

Minorities accounted for 4 percent of the angel population, and minority-owned firms represented 7 percent of the entrepreneurs who presented their business concepts to angels. The yield rate for these minority-owned firms was 14.7 percent, which for the fourth straight year is in line with market yield rates. However, the small percentage of minority-owned firms seeking angel capital is of concern. (Source: The Center for Venture Research)

Over the last year, we have seen more actors, athletes, and entertainers not only launch technology startups, but also invest into startups. Examples include Lady Gaga’s Little Monsters social network; Jessica Alba’s – a site to steer parents away from baby products made with toxic chemicals; Floyd Mayweather invested into the social game RockLive; and Serena Williams invested into video-sharing startup Mobli…

Read more: Wayne Sutton, TechCrunch


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