$17 billion dollars are invested in new startups every year, yet only 2% of the funding is given to female entrepreneurs. More astonishingly, only 1% of venture capital funding is granted to minority-led startups. This has to change.
This underrepresentation of women- or minority-led startups is often caused by a lack of financial resources and education about how to maximize the likelihood of success. Women and minorities have brilliant ideas for startups which need to be listened to and invested in, but the inherent biases of investors often cause these brilliant ideas to be overlooked.
Most startups in fail in their first year. The numbers are bleak. Assuming an optimistic 25% success rate, of the 100 million new startups created every year, 75 million will fail. Minority and female entrepreneurs, who are often at a disadvantage when seeking funding or mentorship, are particularly vulnerable to the risks and challenges facing a new startup. Implicit bias is a powerful force when it comes to where money is invested and where money is spent. While, social progress continues, women and minorities are currently the losers in the world of venture capital resources.
Defined by Forbes and Ohio State University, “implicit bias refers to the attitudes or stereotypes that affect our understanding, actions, and decisions in an unconscious manner. These biases, which encompass both favorable and unfavorable assessments, are activated involuntarily and without an individual’s awareness or intentional control. Residing deep in the subconscious, these biases are different from known biases that individuals may choose to conceal for the purposes of social and/or political correctness.”
ASI Inclusion is a program that seeks to address such vulnerabilities for women- or minority-led startups in the Bay Area. The program provides an integrated platform to establish meaningful, anonymous connections between underrepresented entrepreneurs mentors and investors.” It’s the startups/founders whose identities are protected to prevent implicit bias on the art of the investors. These mentors provide constructive feedback on the startup in order to increase viability. By proactively establishing such relationships, the program seeks to reduce the inherent biases that affect an investor’s choice when deciding to fund a startup.
Investors don’t like to waste their time. Through the ASI Inclusion program, they will have a unique opportunity to meet new startups with innovative ideas that have high potential for growth, impact, and success. They will be exposed to a bigger and more diverse pool of startup candidates than ever before.
While, social progress continues, women and minorities continue to have to battle for room in the startup world. ASI is taking action in the fight for a more equal and inclusive startup sector. We hope to give women and minorities a chance at making their business dreams a reality.