Welcome to the panel discussion on the future of minority investing, hosted by Taj Eldridge, investor and Co-Founder of Include Ventures and director of Climate Innovations for JFF. Joining him on the panel are Lorel Scott, Co-Founder of StartupStarter, Lanie Edwards, Co-Founder of Black on the Block, Eric Cox II, Head of Growth at Netcapital and Natalie King, CEO of Dunamis Charge, all stakeholders in the field of minority investing. In recent years, the conversation surrounding minority investing has gained significant traction. The statistics speak for themselves: only 1.9% of venture capital goes to Black founders, and diverse businesses were disproportionately affected by the COVID-19 pandemic. However, with the rise of equity crowdfunding, we may finally have a tool to address these issues and level the playing field for minority-owned businesses.
Equity crowdfunding, in which individuals can invest small amounts of money in private companies, has become an increasingly popular way for startups to raise capital. This method of fundraising has the potential to democratize access to capital for minority-owned businesses, which have historically faced barriers in securing funding from traditional venture capital firms.
One platform that has been making waves in the equity crowdfunding space is StartEngine. The platform, which is based in Los Angeles and was founded in 2013, has helped companies raise over $300 million in funding. StartEngine has made it a priority to support diverse founders, and has hosted several demo days focused on Black and female-led startups.
Another platform, Seed at the Table, was founded by Alpha Phi Alpha Fraternity and focuses on connecting Black and Latinx entrepreneurs with investors. The platform has reported a 400% increase in funding for Black and Latinx founders since launching in 2019.
In addition to these platforms, there are several other equity crowdfunding platforms that have emerged in recent years, such as WeFunder and Republic, that also prioritize supporting diverse founders. These platforms are not only making it easier for minority-owned businesses to raise capital, but they are also helping to shift the narrative surrounding who can and should be leading successful startups.
Investing in minority-owned businesses is not only socially responsible, but it also makes good financial sense. Studies have shown that companies with diverse leadership teams perform better financially, and that investing in businesses owned by people of color can lead to higher returns.
Despite this, there is still a significant funding gap for minority-owned businesses. By investing in these businesses through equity crowdfunding platforms, retail investors have the opportunity to not only make a positive impact, but also potentially see a strong return on their investment.
The future of minority investing is promising, but there is still a long way to go.