Black Entrepreneurs Get A Foothold In Silicon Valley

 

Chris Bennett, center, CEO and co-founder of Central.ly, discusses a business plan with Brett Welch, CEO of Switchcam, at the incubator space 500 Startups in Mountain View on Nov. 15, 2011. Source: Thor Swift for The Bay Citizen

Bay Citizen | Jan. 4, 2012 — When Chris Bennett moved to Silicon Valley from Miami in 2010 to jump-start his Web business, his first goal was to join a community of fellow black entrepreneurs. “Then I realized there was no community,” said Bennett, the CEO of website builder Central.ly. Bennett is now a leader of the group Black Founders, which works to create opportunities for African-Americans in technology.

Silicon Valley is in need of such opportunities. California’s cradle of innovation, while very good at spawning successful technology companies, is not so good at encouraging entrepreneurship among African-Americans. A recent report by CB Insights, a venture capital information database, found that fewer than 1 percent of venture capital-backed tech companies in California were founded by African-Americans.

Those that are black-owned tend to trail in fundraising. Internet startups whose founders were black received a median of $1.3 million in venture financing in 2010 — compared with $2.3 million for companies founded by whites and $4 million for those founded by Asians, according to the report.

The causes of such disparities are complex and include a shortage of African-Americans in professions related to technology. Black people, who make up about 13 percent of the U.S. population, account for only about 3 percent of scientists and engineers, according to a study by the National Science Foundation.

Whatever the causes, the gaps are as apparent to members of the Valley’s established order as they are to newcomers like Bennett.

“This is mirror-tocracy not meritocracy,” Mitch Kapor, the entrepreneur turned venture capitalist behind Lotus Development Corp., wrote in a blog post in October. In a telephone interview, Kapor said that racial bias works subconsciously because business professionals tend to support people who look and sound like they do, went to the same schools and fit their profile of success.

“Smart investors will learn not to do that, but I think some sort of facilitation, at this point, is important,” Kapor said. His ideas for encouraging blacks to enter the industry “are not widely shared,” he said. “That’s why you need an incubator program.”

Incubators provide aspiring entrepreneurs with resources and networking opportunities. Well-known Silicon Valley incubators, including Y Combinator and 500 Startups, have helped companies like Dropbox, Reddit, Airbnb and Votizen take off. Offering focused help to black entrepreneurs is “part of a cultural solution,” Kapor said.

Angela Benton, the founder and publisher of Black Web 2.0, a website dedicated to technology news that relates to the African-American community, decided last summer to create just such an incubator: the New Media Entrepreneurship Accelerator, or NewME.

Benton’s idea took root during a business trip to Mountain View, when the Charlotte, N.C., resident visited Google’s headquarters to meet with the Black Googler network, a group of Google employees that provides mentoring for African-American technology professionals in Silicon Valley. During her trip, Benton organized a mixer in Palo Alto for black entrepreneurs. To her surprise, about 100 people showed up, eager to connect with their peers.

“It was baffling to me that it hadn’t existed in the area yet,” said Benton, who recently moved to San Francisco from Charlotte. “There had been a lot of talking but not a lot of doing.”

During NewME’s inaugural session last summer, eight African-American startup founders from around the country gathered for 10 weeks. The activities — aimed at familiarizing participants with Silicon Valley startup culture — included an ad hoc pitch session with investors on the Google campus.

Pius Uzamere, one of the program participants, said he noticed an “astonishing lack of black and Hispanic entrepreneurs in these circles.”

“It can be intimidating if you’re the only black person in the room,” he said.

Uzamere, who graduated from the Massachusetts Institute of Technology in 2004 with an undergraduate degree in computer science, said the problem was not with a lack of black technology employees, but executives. “It’s structural. There aren’t many role models.”

With his partner, Becky Cruze, Uzamere is the co-founder of BeCouply, originally planned as a mobile app and companion website that allow couples to document their courtship and organize dates. Shortly after the NewME incubator wrapped up, Uzamere and Cruze received their first round of seed money from Kapor’s venture capital firm. On Tuesday, the company launched a new service called BeCouply Dates, which sells date packages that include an activity, meal and car service. San Francisco couples are signing up to go on the dates beginning this month.

Of the eight NewME participants, three are now setting up shop in the Valley, and two more are slated to relocate in the coming months, Benton said. She plans to offer a 12-week follow-up program in the spring. This time, participants will have to commit 4 percent of their company’s equity to join — a common requirement for incubator programs.

Meanwhile, others are already looking to expand beyond the Valley.

“We need 10 NewMEs,” Chad Womack, a co-founder of the America 21 Project, told an audience of about 100 black professionals in downtown San Francisco in November. “We need to clone Angela and spread her around the country, if we can.”

The America 21 Project, a nonprofit group that promotes technology as a means of generating wealth for the African-American community, is planning to launch an initiative for inner-city youth in the coming months in coordination with the White House, Womack said. Incubators like NewME may play a large role, according to Mike Green, another co-founder of America 21 and a writer for the Huffington Post. Green said such efforts could have a significant impact on black entrepreneurship.

“It’s an ecosystem that does not exist in black America, period,” he said. “Until now, you didn’t have those incubators that target black innovators.”

Read the full story at The Bay Citizen.

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