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What’s Your Startup Theme Song?

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October 1, 2019

Michael Jackson’s classic Wanna Be Startin’ Somethin’ should be every entrepreneur’s theme song. 

If you had a startup theme song what would it be? 

Perhaps it’s Drake’s Started from the Bottom, or 50 Cent’s I Get Money. 

Maybe you’re more of a classic rock person who prefers the likes of Journey’s karaoke standard, Don’t Stop Believing or Bon Jovi’s It’s My Life

Personally, Travis McCoy and Bruno Mars‘ Billionaire soars to the top of my list.

If only launching a venture was as easy as picking a song to jam along to for the ride.  Entrepreneurship in all its forms requires more than musical motivation.  And, for some of us starting something comes with a much larger price tag. 

So this week we’re wondering what factors–catchy theme song excluded–impact the journey to a well-funded startup?

Privilege over Pennies

Got $30,000 handy?  That’s the average cost to launch a business these days.

What happens if friends, family, or your emergency fund don’t have coins to spare?  Then you’re locked out of the top three sources that underwrite more than 80% of startup funding.

Though often overlooked, privilege plays a critical role in entrepreneurial funding.Indeed, “financial capital matters in the decision to start a firm [and] people with greater family wealth are more likely to become self-employed.” 

Research demonstrates that among entrepreneurs, highly educated white males experience higher rates of entrepreneurship.  However, understanding the nuanced intersectionality of this experience is anything but simple:

FN. matrix is incomplete as it does not account for religion, citizenship status, or other bias

In the cut-throat world of business, we’re taught to leverage any available advantage, often at all costs.  Yet, the key to responsibility wielding the privilege is to remain aware of its impact on those in different circumstance.

Billions or Bust

Diverse founders, for example, disproportionately experience challenges in accessing much-need seed and growth capital.  They often face the three common barriers catalogued by Kauffman Foundation:

(1) Virtually non-existent startup loans resulting from the decline of small financial institutions due to death or consolidation.  This means that loans of around $100,000 or less are less frequently issued because they are less profitable.

(2) With only only 18 percent of businesses ever access a bank loan, there’s product market disconnect between traditional financing models and today’s startups.  Outdated guideline don’t reflect the rise of service based businesses which thrive on cash flow over collateral or hard assets. 

(3) VC capital is geographically concentrated and not deployed inclusively. Evaluations like Digital Undivided’s Project Diane or Deloitte’s Diversity in Venture Capital Survey demonstrate the numbers bear out these trends: less than 10 % of decision-makers at VC firms are women and 74 % of U.S. VC firms have zero female investors.  U.S. female-founded startups have raised only 2.2 % of VC investment.  While Latino founders raised only 1.8 % of all VC investment, over the last 10 years, Latina women have raised only .4% of tech VC funding.  What’s more only 34 black women have raised $1MM  or more in VC funding. 

Efforts like Capital Days Florida (coming up on October 30-31 in Miami) and the Rise of the Rest tour seek to close the access and opportunity gap around multiple forms of capital. 

Leigh-Ann / Venture Cafe Miami

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