Hello, Broadsheet readers! Elaine Chao and Betsy DeVos step down, Rhode Island Governor Gina Raimondo is Biden’s choice for Commerce Secretary, and we learn more about the fundraising strategy of a food start-up founder. Have a restful weekend.
– Eat the funding gap. Earlier this week, we highlighted a story of Business intern which included a deeply disappointing statistic: Of the hundreds of companies that have gone public in the United States over the years, only about 20 have been founded and run by women.
A big culprit is the funding gap between startups run by men and women, a phenomenon we covered at length. In 2019, only $ 3.8 billion, or 2.7% of all venture capital money, went to businesses founded only by women; An additional $ 21 billion (14% of the total pot) went to startups with mixed founders. Founding women of color were subject to an even greater chasm; they received $ 880 million or 0.64% of all funding.
This story was fresh on my mind when I read that Partake Foods, a hypoallergenic food brand founded by CEO Denise Woodard, closed a round of $ 4.8 million last month. Woodard is the first woman of color to raise $ 1 million for a food start-up, according to Forbes.
More than half of the $ 7.5 million Partake has raised so far has come from black investors – Rihanna was part of that latest round when she first invested beyond her own businesses – and Woodard says it ‘is by design. One of its goals is to increase the wealth of the black community and to have investors who understand that this mission “is really important to me”, she said.
When Fortune asked investors last year How to increase funding for black founders, one answer was to diversify who writes the checks. “When you have different archetypes at the top of a company… you just have a different transaction flow,” said Alexa von Tobel of Inspired Capital.
But Sarah Kunst, Managing Director of Cleo Capital said Black founders don’t necessarily have to wait for this change to happen. “It is certainly not necessary to be diversified to invest in various founders”, Kunst said. Founders of Color are raising money now, she said, by responding to the demands of an industry that (unfairly) expect more.
Woodard, for her part, hopes to inspire other potential entrepreneurs by telling her story, including how she sold her car cookies early on. “There is so much longer work,” she Told Forbes. “I say this to say that if I can understand and get here, anyone can.”
Today’s Broadsheet was organized by Emma Hinchliffe.