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Groundbreaking new research has revealed today that young businesses with black founders at the helm are most likely to hire diverse teams and self fund their venture.

The research, titled The Black Report by 10x10 in partnership with Google for Startups, found that in the firms survey, on average 81% of staff members identified as black, Asian or ethnic minority. (Most of the companies surveyed were operating in the 'tech' sector.)

The report is the first of its kind and explores the journey of early stage pre-seed black founders based in London and aims to delve into the stories of black founders, who they are and what hurdles they may face.

This news comes after growing pressure globally for companies to hire more black staff members in the wake of protests against police brutality.

 

Gender

The impressive diversity figures also extend to gender with nearly an even split of 48% to 52% female to male founders.

10x10, a group of early-stage black founders and VCs based in the UK, hopes the report will spark a national conversation about bridging the economic gap between black founders and their peers.

 

 “We felt it was important to create The Black Report as we wanted to start painting a picture of black founders - a growing population with incredible value. The diversity stats are particularly interesting as we know from previous studies that there is a huge business case for hiring diverse teams. Black founders could become key in closing the national gap in regards to the lack of diversity in business.”

– Andy Davis 

Co-founder, 10x10

 

Self-funded

The report also found of the 60 Black founders who were interviewed, a staggering 88% self-funded part of their ventures.

 

 

Funding challenges

Marta Krupinska, Head of Google for Startups UK says: "Having spent years in the startup world, I’ve remained shocked at how little we understand - and do - to support black founders, despite obvious challenges they face in accessing funding and the networks critical to success. I’ve been really impressed by the work that the Black Report does to address all those, by not only showing data but whole lives of entrepreneurs and thus creating the empathy and momentum we need to change the status quo."

Last week Google for Startups announced that they would create a $2 million Black Founders Fund, as part of a commitment to build a more equitable future.

 

Key statistics:

• Social Mobility - Growing up, two-thirds of the black founders identified as working class, compared to the 75% that identify as lower to upper middle class now.

• Education - 69% of the founders pursued a career in tech and startups with non-STEM degrees. The number of Russell graduates in the sample of founders is higher than the UK average by 11%.

• Mental Health - 15% of all founders proactively manage their mental health vs 6% of the general black population.

• Founding Teams - 43% are solo-founders; 48% female, 52% male.

• Job Creation - An average of 5.4 jobs created by each startup equals 322 jobs total at the time of reporting (Q1,2020).

• Teams and Diversity - Black founders hire diverse teams. 53% of their staff are male; 46% female; 1% identify as non-binary; 6% of staff identify as LGBTQIA+; 75% of staff identify as people of colour, which is 3x higher than industry standard.

• Early Success Metrics - 77% of the startups are generating revenue.

• Self Funding - 88% of black founders self-fund their startups, committing an average of £14k; 22% of founders raised funds via a Family & Friends round.

• External Funding - 28% relied on angel investment, more than any other source of funding. Venture capital investment totalled £2.26 million out of £8 million.

 

To read The Black Report in full here - Click Here

 

Picture: Andy Davis, Co-founder of 10x10.

Article written by Cathryn Ellis
21st October 2020

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