In a first of its kind study, the FoundHers report on Black women entrepreneurs surveyed more than 1,500 founders across Canada to identify any structural problems and explore insights and recommendations for better investment in this community as vital members of the Canadian business ecosystem. Supported by the Canadian Women’s Foundation, BDC, and Brock University, FoundHers is the inaugural report in a series.
Pitch Better’s FoundHers Report finds that Black Women Entrepreneurs are Highly Educated and Severely Underfunded.
The report reveals that although Black women founders are highly educated and their businesses are growing in sectors beyond the traditional boundaries, their experience in funding, financing, and participation in incubator programs is in complete contrast with this profile. The study found that almost 60% of Black women entrepreneurs have a bachelor’s degree or higher. However, 43% of for-profit and 37% of not-for-profit founders have never secured external funding. More than 60% of for-profit businesses have self-funded their organizations up to $100,000.
When asked about ecosystem support available to them through accelerators and community-based programs, over 90% indicated that they rarely participate due to lack of information. In addition, access to finance, community networks, growth opportunities and mentorship were ranked among the top elements that respondents say would make their entrepreneurship experience better.
The need for immediate government and institutional attention and support is critical because 45% of Black women entrepreneurs identify their business lifecycle at a growth phase. However, 41% of respondents reported that the global pandemic has significantly impacted their revenue and/or profit, seriously impeding their growth prospects.
Pitch Better’s co-founder, Amoye Henry states that, “support mechanisms should go beyond financing to scale up these businesses because about 70% of founders are either solopreneurs or operate with less than 10 employees. Additionally, a lack of transparent information channels has led to lack of representation and interest in funding opportunities as well as incubator programs.
Respondents were asked what social issues their not-for-profits were addressing, the top commonly cited issues include anti-Black racism, gender equality and entrepreneurship. They also indicated that finding capital or investment, partnership or network, personal development and mentorship will continue to remain relevant in their focus.
“Our government is committed to addressing Canada’s most persistent and complex social problems, such as the institutional discrimination experienced by Black women entrepreneurs seeking venture capital funding,” declared Honourable Minister Ahmed Hussen. “That is why we were pleased to provide funding through our Investment Readiness Program, which has supported the Canadian Women’s Foundation and Pitch Better in their work to provide this important report as well as ongoing service, to help create an inclusive market that works for everyone.”
