Black Founders Received Less Than 0.5% Of All VC Funding In 2023

Venture capital (VC) funding for Black entrepreneurs in the US has been decreasing since a peak following George Floyd’s murder in 2020.

In 2023, Black founders in the US got only 0.48% of all venture dollars, about $661 million out of $136 billion, TechCrunch reports. This is the lowest in recent years.

Peak funding in 2021

In 2020, Black founders received 0.6% of venture funding. By the first half of 2021, funding to Black entrepreneurs in the US reached nearly $1.8 billion, a fourfold increase compared to the same time the previous year.

This peak was due to the tech industry’s promise to support Black founders more after Floyd’s murder, with many funds committing capital to Black founders.

In 2021, Black-led venture funds also announced record raises, with Reach Capital, Harlem Capital Partners, and MaC Venture Capital raising over $100 million for the first time.

Despite these record-breaking raises, Black startup entrepreneurs still got only 1.3% of the $147 billion in VC invested in US startups. This is a tiny figure compared to the over 13% of the U.S. population that is Black or African American.

A relentless decline

The first half of 2022 saw Black founders receive $1.2 billion in VC funding – less than in 2021 but still above average.

However, as the economic downturn has continued to sink in, funding received by Black founders also took a hard hit. In total, Black founders raised about 1% – $2 billion – out of the $215.9 billion allocated in 2022.

Read: Diverse Teams Facing More Scrutiny Amid Venture Capital Slowdown

In the first half of 2023, Black founders raised about $565 million out of $75 billion, a huge drop from $1.8 billion out of $144 billion in the first half of 2022.

In the first two quarters of 2023, Black founders raised 0.74%. In the third quarter, they raised 0.13%, and in the fourth quarter, 0.20%, based on TechCrunch’s analysis of Crunchbase data.