The pipeline problem is a myth
Black and brown founders are looking for capital but are investors looking for them?
by Nagela Dales
Here at Let’s Start Up, we just wrapped our epic 10 Days of Deal Flow campaign. The goal was to provide a platform to help founders connect with a collaborative and experienced investor network. We removed all the barriers typically associated with investor introductions and invited founders to submit their pitches through a simple form.
All founders were encouraged to apply, regardless of funding or product stage. Asking them to speak to the market opportunity, possible customer(s), and product’s market and fit.
After reviewing more than 120 decks over the next few weeks, the LSU team, led by Janine Sickmeyer, Angel Investor and Founder & CEO of Let’s Start Up, selected 100 to share over the next ten days every hour, on the hour on Twitter.
We tweeted hourly introductions with funding information, market, stage, type, and location to generate interest among investors with the sole mission to: GET FOUNDERS FUNDED!
The Meet the 2021 Flow Founders
We think every one of our Flow Founders is someone to watch, invest and support.
Overall we had 98 founders numbers :
We knew we wanted to harness most of our resources towards giving visibility to underestimated founders to get the capital they needed. We had 87.75% of our deal flow participants identify as an underestimated and underrepresented founders.
After a year of protests against racial inequality, the venture capital industry vowed to do better. However, underrepresented founders are still getting left out of Silicon Valley’s economic engine, “On average, 17 percent of the funding to white startups came from investors, compared with 1.5 percent for Black founders.”
Additionally, popular pre-seed funding strategies such as the friends and family rounds are typically not available to underrepresented founders based on their current access.
The Markets
After breaking down the data — we saw four markets arise as the top areas that founders saw and sought opportunities.
With millions of people remaining home, relying on tech to stay entertained, connected, and healthy during the Pandemic, it is unsurprising these four areas also reflected the four regions projected to have the highest growth in 2021.
Consumer Technology
According to the Consumer Technology Association, the revenue for the technology industry will reach $461 billion in the U.S. in 2021 — a 4.3% increase year-over-year. Despite the impact of COVID on the economy, startups, and business.
The Pandemic has pushed the fast-forward button on tech adoption — from our homes to our work to our doctor’s offices,” said Gary Shapiro, president, and CEO, CTA.
Trending: New social platforms and niche communities
As COVID-19 Pushes Up Internet Use, 70% of consumers are looking for safe spaces where they can stay connected both on and offline.
Blooming Health is Solving Social Isolation and Loneliness in Seniors
Official is building a CRM for couples.
Flox, an app where friends create a group profile together to discover, match, and connect with new groups.
Plain Sight is a social app that allows you to build community, connections, and opportunities by engaging with other like-minded professionals in virtual and physical spaces.
With Over a fifth of U.S adults moving due to the COVID-19, it an opportune time for companies like RE: Locate — connecting young millennial and gen z professionals with emerging and small-mid-sized cities across the U.S.
Trending: Gamification Meets Education
With 250 million students worldwide participating in remote learning, both students and teachers are struggling with the hours upon hours of video conferencing that are now a part of their day.
Some Flow Founders creating more interactive learning experiences:
Circletime Interactive — A learning community for kids that helps parents raise active learners through omnichannel, instructor-led group experiences.
Vesta is a revolutionary online edu-entertainment platform, simulating the live classroom environment and allowing parents to work from home post-COVID-19.
Team Excel gamifies student success metrics to turn learning and personal development into a fun, healthy, team-based competition.
Personal Health
In many ways, the COVID-19 pandemic has challenged consumers’ sense of personal health. Simultaneously, we are comfortable talking about self-care and fitness but still struggle to talk about health without an ableist and privileged lens.
A change in how consumers feel and interact with the health system allows for more nuanced conversations around personal health and more opportunities for the market to address them.
HealthStory is a digital health platform empowering individuals living with chronic illness to visualize, effectively communicate, and advocate for the story of their health and healthcare journey.
Cloudnine uses AI software to solve interoperability issues within healthcare to improve patient care and outcomes.
Social Robot was created to improve human health and increase adherence in the treatment of chronic disease.
DiaM Life is the first centralized software that uses Behavior Science to improve Diabetes.
Enterprise Software
You don’t need another Medium post telling you how much the Future of Work has been reshaped by 2020, not only by the Pandemic but also by the very loud and very vocal racial reckoning occurring throughout the business world.
We love this resource by Sherrel of The Plug, keeping track of companies making public stances around racial justice and racial inequality.
But what we are even more excited about is who is building the Future of Work and for whom they are building it.
Just last week, Calendly officially became the first unicorn with an evaluation of 3B dollars with a black founder at its helm. We are excited to continue to see significant shifts in the enterprise software industry.
“What’s interesting is that I don’t know of any other Black women founders building productivity/task management software, which comes back to feeling like one of the few Black women in the room at work all over again,” says Anastasia Tarpeh-Ellis, a co-founder of Bosa. A Chrome extension that automatically detects tasks in the tools team members already use and automatically creates a to-do list for each of them. “We built Bosa, not only from this lens of wellness and balance but also inclusivity because of our lived experiences as Black people.”
Trending: The Future of Enterprise Software Places AI at its Core
According to a Survey in Algorithmia, 43% of IT say AI/ML matters much more than they thought pre-pandemic.
Our 2021 Flow Founders see AI as the future of enterprise software.
As black and brown data scientists, AI experts become more vocal on AI and racial-bias issues.
It’s more important than ever to invest in companies pursuing ethical AI standards like Flow Founder business Mindstand, which solve racial bias in corps through AI.
Trending: Data Empowerment
Consumers are hungry for increased transparency on how and what data is collected from them. Flow Founders are looking to be a part of that by helping consumers have more power over their data.
Elroi gives the consumers the right to exercise their data privacy rights in a centralized location and provides enterprise solutions to meet the demand and privacy regulation requirements.
Driver’s Seat Cooperative empowers gig workers to collect, share, analyze and profit from their data.
Kyndoo is the data platform solving for influencer fraud, attribution, and content safety.
Trending: A Remote First Business Requires an Investing in your Onboarding
As 17 of the biggest companies move to a remote-first model, no longer can employees be wooed by sprawling campuses and office perks.
Companies will need to invest in 3 specific areas in order to create and maintain a thriving and happy remote-first team; onboarding, engagement, and retention.
Onboarding
Edify is helping you build and deploy technical onboarding programs for engineering teams automatically.
Guide provides bite-size video training for remote teams.
Engagement
AgoraHR helps companies improve employee engagement with real-time analytics. ****
Retention
“Max” — from Humaxa — is the AI Assistant that predicts and prevents unwanted employee turnover.
After our ten-day experiment, does this type of open connecting and funding work? Yes!
By the end of day one, we had already sent five deals to investors; in ten days, 30 actionable founder to investor connections were made!
A Few Takeaways
A reminder to founders, an MVP isn’t a requirement for pre-seed funding. About 10 of our Flow Founders were able to secure committed amounts while being pre-product or pre-revenue. A great idea, the right team, and execution are invaluable.
The pipeline problem continues to be a myth. The talent is there, the innovation is there, the capital is not. We accepted 90% of the founders who pitched to be part of the Flow Founders, and 87.75% of those were underrepresented founders.
Angel investors are operating more autonomously, and that’s an excellent thing for founders. It means fewer steps to a genuine introduction.
As we continue to think and build a more inclusive economy, it includes investing in divergent founders with different experiences, passions, and backgrounds, partnering with investors willing to co-create new pipelines, re-imagined funding theses, and a willingness to throw away all gatekeeping.
Most importantly Cut. Those. Checks.
About the Author
Nagela Dales (she/her) is a Brooklyn obsessed unapologetic multi-hyphenated creative and founder of SLCo & Agency, with a life mission to help create a radically inclusive, multi-generational economy.
