Amount of capital raised by black entrepreneurs continues to decline.
Crunchbase’s latest numbers show that Black founders raised $187 million in Q3, which is a staggering drop from the nearly $1.1 billion they received in Q3 2021 and a significant drop from the $594 million the cohort raised in Q2.
Black founders collected just 0.43% of the nearly $43 billion used in the third quarter. (Correction: This article was updated to show that Black founders raised 0.43% of all venture funds for the third quarter, not 0.12%.)
Within that, Black women raised 49% of all funding allocated to Black founders in the third quarter, according to Crunchbase, totaling $91.63 million. To pick up the crumbs, it’s at least good to see that black men and women seemed to get nearly as much funding this quarter, even if the numbers they split are alarming.
Frankly, homes are worth more than $187 million. Adam Neumann rose more in one session than all Black founders could in one quarter. Adele is worth $220 million. However, these numbers are not necessarily surprising. TechCrunch reported that investors often retreat to their networks amid economic downturns and take less risk on minority stocks.
“When the venture capital industry gets a cold, underrepresented founders get pneumonia.” Tiana Tukes, Investor, Colorful Capital
Perhaps this is best illustrated by the fact that the funding Black’s founders raised in the third quarter is roughly on par with the $180 million allocated to the group in the third quarter of 2020. However, Black’s founders were able to raise that $187 million from just 32 deals, compared to 2020, when it needed 93 deals to reach $180 million.
In total, Black’s founders have raised just over $2 billion in venture capital this year, down from the stunning $4.72 billion distributed in the record year of 2021.