As the Silicon Valley Bank postmortem continues, it’s worth sparing a thought for the startup founders of color who lost a valuable resource.
Yes, it’s partly about the cash.
“Less than 1% [of tech sector investment capital] goes to Black female founders,” says Tiffany Dufu, founder and CEO of The Cru, a startup to help women achieve their goals. When SVB failed, she found herself temporarily unable to make payroll. Dufu explained to NPR that she is emblematic of the kind of entrepreneurs who have to fight for both investment and access to expertise. “There are a lot of underrepresented founders and leaders in this community who were grossly impacted by this. There’s not a lot of liquidity. We don’t have large assets to draw on. And so this really created a crisis for us.”
But it’s also about the connections.
The baseless charges of wokeness being leveled at SVB are particularly maddening given that the bank did an unusually good job identifying promising Black founders and connecting them to other founders, experts, discounted technology tools, and specialized banking services to help them grow. SVB’s sudden collapse sent a ripple of existential dread through the tightknit tech community in Atlanta, for example, which relied on the bank for everything from credit cards to business intelligence to key relationships.
“When our economy catches a cold, the Black community catches the flu,” Kelly Burton, the CEO of the Black Innovation Alliance, tells Atlanta World Daily. “There will likely be retrenchment in the space with investors becoming more skittish. That can’t be good for Black founders, especially [considering] there’s all this conservative blowback.”
And now, it’s about the future.
The loss of SVB means a vital window has closed for immigrants of color, too. The bank had developed unusual expertise in helping entrepreneurs from around the world build their enterprises in the U.S. Shortly after the…
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