Black Women Founders in North America: The Double Burden of Race and Gender in Entrepreneurship

Black women across North America are building businesses at record rates, yet they face funding barriers that cost the continent trillions in unrealized economic potential.

The FoundHers report, which surveyed over 1,500 Black women founders across Canada, found that 63% had to self-fund up to $100,000 to establish their businesses, with 43% unable to secure any external funding.

Black women entrepreneurs often face:

• Limited access to professional networks concentrated in major financial centers
• Higher loan denial rates and elevated interest rates when loans are approved
• Systemic barriers rooted in both gender and racial discrimination
• Student debt burdens that exceed other demographics

The Reality of Funding Disparities

According to the Canadian Venture Capital Association, Black women-backed ventures received only 0.2% of all venture capital funding in Canada.

The FoundHers research found:

• 62% of Black women founders are actively seeking investment capital
• 40% of all venture capital in Canada went to just 10 companies in 2017
• More than 77% of Canadian Black entrepreneurs live in Toronto, Vancouver, and Montreal, limiting geographic diversity
• 82% of Black entrepreneurs funded their businesses through personal savings

This funding gap creates a massive economic loss for North America. In the U.S., if Black women-owned businesses achieved average revenue parity with white women, they would add $409 billion annually. Reaching parity with Black men would inject $1.8 trillion into the U.S. economy. At current growth rates, it would take four decades for U.S. Black women-owned businesses to reach revenue parity with Black men-owned businesses.

Mentorship Access: Programs Exist, But Reach Remains Limited

The Black Women Collective serves Black women entrepreneurs across Canada through education, mentorship, and financial literacy programs, but its reach remains limited.

The FoundHers research revealed that Canadian Black women founders face unique challenges:

• 58% of Black women founders hold bachelor’s degrees or higher
• 44% identify as being in the “growth” phase of their business
• Geographic concentration in three cities limits mentorship access for rural and smaller-city entrepreneurs

Canada’s government-funded Women Entrepreneurship Strategy has provided over 2,600 loans to women entrepreneurs, but specific data on Black women’s access remains limited.

Across North America, demand for mentorship significantly exceeds supply. The programs that do exist often require entrepreneurs to meet specific criteria that may exclude those who need support most. Virtual programs have improved accessibility post-pandemic, but in-person networking still plays a crucial role in business development, particularly for accessing investor relationships.

Exclusion Within Women-Focused Entrepreneurship Spaces

Even within women-focused entrepreneurship communities, Black women report feeling marginalized. Research from the Urban Institute documents how predominantly white women’s business organizations across North America often fail to address specific challenges facing Black women.

The exclusion manifests in several forms:

• Networking events held in locations or times less accessible to Black women
• Discussion topics focusing on challenges resonating more with white women’s experiences
• Failure to address systemic racism in funding and hiring practices
• Assumption of shared experiences that ignore racial identity intersections

In both the U.S. and Canada, Black women entrepreneurs report having to choose between addressing gender identity or racial identity when participating in mainstream women’s entrepreneurship spaces. The intersection of both identities creates unique challenges that single-focus organizations struggle to address effectively.

This has led to specialized organizations:

• U.S.: Black Girl Ventures, The WELL Network, various regional Black women entrepreneur meetups
• Canada: Black Women Collective, FACE Coalition, community-specific support networks

While these spaces provide targeted support, they can also lead to further segregation within the broader entrepreneurship community. Many Black women entrepreneurs must navigate multiple networks to access the full spectrum of resources they need.

Double Scrutiny in Investor Pitch Meetings

Black women founders face intensified scrutiny during investor meetings in both countries. Business Insider reports cases where Black women entrepreneurs encountered inappropriate questions about personal lives, educational backgrounds, or family situations that white male founders rarely face.

Stanford’s Gender Institute research involving 96 semi-structured interviews with Black technologists found that both gender and racial biases compound when Black women pitch to investors.

The scrutiny extends to business fundamentals:

• Investors demand more extensive proof of market validation from Black women founders
• More detailed financial projections are required compared to white male founders
• Longer track records are needed before investors consider an investment
• Focus on potential risks rather than growth opportunities

Research from Northeastern University using Shark Tank data found women are less likely to get funding when pitching innovative ideas to investors, with bias particularly strong for socially attributed characteristics like race.

Canadian research from Toronto Metropolitan University highlights that for Black women entrepreneurs, barriers are amplified with high borrowing rates and increased skepticism from traditional lenders and investors.

Strategies for Overcoming Stereotypes and Bias

Black women entrepreneurs across North America have developed specific strategies to counter stereotypes and bias:

1. Building Credible Advisory Boards: Many focus on recruiting recognized industry leaders who can provide credibility and open doors to funding networks. This proves particularly effective in both U.S. and Canadian contexts where investor networks remain predominantly white and male.

2. Data-Driven Presentations: Black women founders who present comprehensive market research, detailed financial models, and clear growth metrics find more success in overcoming initial skepticism. Pre-emptively addressing potential concerns by highlighting educational credentials, previous work experience, or industry expertise early in conversations helps counter unconscious bias.

3. Customer Traction First: Building strong customer traction before seeking investment helps counter stereotypes. Black women entrepreneurs who demonstrate paying customers, positive user feedback, and growing revenue streams find investors more receptive to their pitches.

4. Strategic Network Building: Many successful entrepreneurs join industry associations, attend conferences, and participate in accelerator programs to build relationships with potential investors and partners before formal pitching begins. This “warm introduction” approach proves more effective than cold outreach.

5. Leveraging Cultural Insights: Some entrepreneurs explicitly position their Black identity as a competitive advantage, highlighting unique insights into underserved markets and diverse customer bases that homogeneous teams miss.

The Insufficient Ecosystem for Black Women Founder Mothers

Childcare and Business Demands:

Black women who are mothers face additional challenges across North America. Childcare responsibilities limit ability to attend networking events, travel for investor meetings, or work the long hours that startup culture typically demands.

The FoundHers research found that Canadian Black women entrepreneurs who are mothers described unique challenges balancing business needs with family responsibilities. One entrepreneur highlighted that resolving tensions in her child’s life resulting from systemic racism and discrimination came with emotional costs that other “mompreneurs” may not face.

Canadian Black women are more likely to be single (21.6% compared to lower proportions for other groups), potentially indicating single motherhood rates that compound business challenges.

Support System Gaps:

Programs specifically addressing mother entrepreneurs remain inadequate:

• Most accelerator programs and investor meetings assume participants can travel freely
• Evening networking events conflict with parenting responsibilities
• Childcare costs consume significant portions of revenue for early-stage businesses
• Remote work tools have improved accessibility but in-person networking remains crucial

Some organizations address these gaps:

• Various co-working spaces offer childcare options, though availability remains limited
• Canada: Limited specific programs for Black women mother entrepreneurs

The most successful mother entrepreneurs often build businesses offering flexibility and scalable without requiring constant presence, potentially limiting their choice of business models and growth strategies.

The Path Forward for North America

Black women entrepreneurs represent one of North America’s most underutilized economic resources. Their businesses generate significant revenue and employment while growing faster than many other demographic groups in certain metrics. Yet systemic barriers prevent them from reaching full potential.

The solution requires coordinated action across sectors:

For Investors:

• Examine portfolio diversity and investment decision-making processes
• Actively source deals from Black women founders
• Provide constructive feedback to all entrepreneurs, regardless of funding decision
• Participate in mentorship programs

For Policy Makers:

• Increase CDFI and similar alternative lender funding
• Simplify licensing and permit processes
• Expand procurement opportunities with transparent tracking
• Mandate diversity reporting for firms receiving government support

For Corporations:

• Increase supplier diversity spending with Black women-owned businesses
• Create corporate venture funds focused on diverse founders
• Sponsor accelerator programs and provide mentorship
• Share expertise and network access

For Support Organizations:

• Expand geographic reach beyond major metropolitan areas
• Provide flexible programming accommodating mothers and caregivers
• Create stronger connections between organizations across the U.S.-Canada border
• Focus on scaling support, not just starting businesses

Black women entrepreneurs have demonstrated determination and capability. Now they need systems that match their ambition with equal opportunity.

Black women have already proven they can build successful businesses. The question is whether North American institutions will remove the barriers preventing them from reaching their full economic potential.