Diversity, Equity & Inclusion in Entrepreneurship

Innovation In Equality seeks to confront the racial and gender gap in entrepreneurship and VC investing through candid conversations with experts and influencers.

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The Tech Equity Expert: Third person perspective

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Repeat entrepreneur, Lauren Washington, joins us for a conversation about some of the opportunities and challenges for founders of color. Lauren is the Co-founder of seed-funding platform, Fundr, and one of the original founders of Austin-based “Black Women Talk Tech.”

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Lauren Washington Bio

Founded in 2017, Black Women Talk Tech’s mission is to help black women create the next billion dollar business. In a few years, it became the largest conference for black women founders and spun off to Black Men Talk Tech in 2019. It extended its mission by creating a non-profit, Talk Tech Association, which has since grown to local cities chapters around the world.

Given her experiences with fundraising and hearing stories from the hundreds of women she’s worked with, Lauren created Fundr in 2019, a platform that automates seed investing by creating portfolios of vetted startups for angel investors.

Her companies have won multiple awards including 43North, the largest global business competition and the Advanced Imaging Society’s Distinguished Leadership Award. She has been featured in The New York Times, Elle, Inc and Black Enterprise and has been listed as a top female entrepreneur in CIO Magazine, Essence Magazine and Entrepreneur Magazine.

Lauren started her career as a special education teacher with Teach for America and went on to develop marketing and data strategy for over 100 global companies. She started her entrepreneurial journey with her first company, KeepUp, a social listening platform.

She has her BA from the University of North Carolina at Chapel Hill and her MBA from Northwestern’s Kellogg School of Management. She is on the board of advisors for SXSW Pitch and is the board chair of Talk Tech Association.

Ray Leach:

Hello, and welcome to Innovation In Equality, a podcast bringing inequities in tech to the forefront through candid conversations with founders, investors, and stakeholders. I'm Ray Leach, the founding CEO of JumpStart, a full service venture capital and economic development firm helping to unlock the full potential of entrepreneurship. In this episode, we'll hear from Lauren Washington, the Co-Founder of Fundr, a platform that automates, diversifies, and democratizes seed funding. Prior to her current venture, Lauren co-founded Black Women Talk Tech, a conference focused on Black female founders.

Ron Stubblefield:

Thanks for joining us today, Lauren. How are you?

Lauren Washington:

I'm doing pretty well. Thank you so much for having me. I'm so excited to jump into this conversation. It's long overdue and really excited to talk about it with you, Ron.

Ron Stubblefield:

Great. So I know when we last talk you were really excited about Fundr. So what I would like for you to do is just walk us through your journey and how it led you to this moment to create Fundr.

Lauren Washington:

So I have been an entrepreneur for about seven years now, and I started my first company back in 2014, which was called KeepUp. And we essentially automated social media listening. I won $250,000 through the 43North competition that's up in Buffalo, New York, and that kicked off my journey to becoming a tech entrepreneur. Little did I know that I knew pretty much nothing about how to do that and was learning it as I went along.

Lauren Washington:

But one of the biggest barriers that I had was around funding. So even though we won $250,000, and that should be a signal to most investors that we are a company that's worth investing in, I really struggled after that to raise follow-on funding.

Lauren Washington:

And after that I was able to meet these other two incredible women, Esosa Ighodaro and Regina Gwynn. And they were working on their own businesses as well and we got together and said, "Let's just help each other at this point. You're going in the same direction that I'm going in, we're having the same challenges, let's get together and talk and see if there's ways we can support each other."

Lauren Washington:

And that is what ended up turning into Black Women Talk Tech, which has now grown to be the largest conference and membership organization for Black women tech founders. And then through that journey, talking to hundreds of women, talking to investors on the other side as well, just understanding that there were barriers on both sides and my story was very common, unfortunately. And that these women were coming up against various issues that stopped them from really scaling their businesses.

Lauren Washington:

And so I think for me, seeing that and then having my experience as well really made me lead to Fundr and really wanting to change the overall landscape of the industry. I think for me I realized it wasn't an issue that I was having, it was a systemic issue that we were all having.

Ron Stubblefield:

I want to unpack something you just said in the moment, barriers. [inaudible 00:03:28] talk through what some of those barriers are. As you mentioned, it wasn't just isolated to your experience.

Lauren Washington:

Absolutely. So some of the barriers that I faced personally and that I think a lot of people are facing, one is just access. So I think that's the top issue right now, is how do you get access to the people who have the ability to write checks to fund your business? It's not as easy as it sounds. I think it's an industry that is built on warm introductions. It's an industry that's really built on who you know and how you get introduced.

Lauren Washington:

And unfortunately, if you are a Black entrepreneur, you don't have access to that. I didn't grow up with a family of very rich uncles who can write my first friends and family check. I didn't grow up with a family that was connected to this industry in any way. So for most Black people who don't have generational wealth, it's very difficult to break into this. And so I think that's number one.

Lauren Washington:

Number two is just the education. So again, if you don't have that community who has been through this before and can pull you up, how are you going to learn how to get through that yourself? So I think for me, when I came in and I said, "I didn't know what I was doing," I truly didn't understand that there was a language that you had to follow and there's a certain way that you had to approach pitching and you had to approach funding. And that took me a really long time to learn.

Lauren Washington:

And I think when you come in at that disadvantage, even if you get your foot in the door, if you're not able to present yourself in the correct way, it's a very small community, and you are unfortunately, I wouldn't say Blacklisted from it, but word gets around quickly if you come in and you don't know what you're doing and there's already a high barrier for Black founders in order to pitch their companies and get funding.

Ron Stubblefield:

I think that's very informative for a lot of people who sometimes take for granted the access they have that not everyone else has. And as we talk through, how do we create equitable access, we need to ask the question, how exactly did these barriers come to exist in the first place? So what's your insights on that?

Lauren Washington:

I think they came from the same way that pretty much every industry is built at this point. Most of business is built on relationships. I think that I've learned that over time that the relationships that I have built through the various networks I have come back and help me over and over again. And so from that perspective, I understand.

Lauren Washington:

But we are now at a point where we have access to so much different technology that can change opportunities for people. So the whole point of the internet, the whole point of tech is to democratize things for everyone. And it's done that in a lot of different ways, but it has not necessarily done that within the funding industry.

Lauren Washington:

And I think a large part of it is because there's no real incentive to do it. So even if you are only choosing White entrepreneurs, the likelihood of you getting an ROI on that is still fairly high. There's no incentive for you to have to go out and work with Black entrepreneurs, unless you feel like they're going to bring in some outsized ROI or return on investment that the ones that you're already investing in have.

Lauren Washington:

And so I think it's a tough way to talk about how opportunity makes sense. And there are a lot of ways where you can bring opportunity to the table so that you can create a return on investment in areas that other people haven't actually invested in yet. But it's going to be a long conversation to get there because the way that this has been working for decades still continues to work to this day.

Ron Stubblefield:

And I think that's pretty sobering, but a very honest assessment of where we are. And when you mentioned that, two thoughts came to my mind. The first I think of Arlan Hamilton and how Arlan spoke about amplifying the talent and power of underestimated founders and trying to reshape the way we start these difficult conversations. So from your perspective, Lauren, why is this framework necessary in talking about tech and equality?

Lauren Washington:

Yes, and I love Arlan Hamilton. I love how she came out here and is completely disrupting the conversation and shifting it into a more positive framework. So the whole reason she started saying underestimated instead of underrepresented, it was because there are incredible founders out here that are doing incredible work. But the problem is that when they get in front of these different investors, unfortunately, there are a lot of biases that come into play that overshadow that incredible work that they're doing.

Lauren Washington:

And so I think really shifting that and putting the spotlight on the founders and how great they are and showing that it's not their issue and it's not their fault that they're not getting funding is so incredibly important. And I think at this point in time, it's really important to shift that conversation because we're creating all of these different funds and we're creating all of these different points of access now after the social justice conversations over the summer, and we really need to make sure that the spotlight is on those who created the structure to begin with and not those who are victims of it.

Ron Stubblefield:

No, I think that's very, very important framing. Understanding, why are we here? And I think as we talk about this underestimated concept first, one of the things I want to talk about are success stories we're seeing among Black founders when people choose to stop underestimating them. So Lauren, I know you've been nationwide. Different stories, different friends, different connections. Just want to hear from you some success stories that people should be aware of.

Lauren Washington:

I think the last couple of weeks there have been a couple of really exciting success stories that we've seen in the news. So Calendly is one. They just raised funding at, I believe, a $3 billion valuation. Cityblock Health is another. A Black female founder raised money at a billion dollar valuation.

Lauren Washington:

And I think Calendly in particular is really interesting as a case study because he has been outspoken about the fact that he was unable to raise money when he first started. I think his first round he went out and raised about $300,000 and struggled to get that and couldn't bring in more funding. And now, fast forward a few years later, and he's a $3 billion dollar company.

Lauren Washington:

And so are the processes that we have in place really working to identify the Topes of the world, the Calendlys of the world? And I don't think that they are, and I think hopefully these successes that we're seeing will bring people's eyes and open them up to the fact that there are incredible Black founders out there because the more that we see that, the more likelihood that investing will come for those who are just getting started.

Ron Stubblefield:

Everyone dreams of being the unicorn. And you find Black founders who are the unicorns but are not getting the initial love that a unicorn deserves. And we've got to ask why. Just as a curiosity question, everybody assumes that you have to be somebody who's got a super tech background to even become successful at creating a tech business. So I want to hear from you, talking about your journey and the journeys of others that you know, examples of how that actually wasn't the case.

Lauren Washington:

Absolutely. I think that's me in a nutshell. I didn't come from a tech background. I am not a coder. I have tried to code a few times, and it's best left to the professionals, I would say. I'm not great at it and I don't particularly enjoy it. But I don't think that should cut me out of the industry as a whole.

Lauren Washington:

So I will say that's true for at least a lot of Black women that they are non-technical founders. And they struggle to find technical founders as well. So I think when we talk about what a leader looks like, it's not only in reference to raising funding, it's about, who do you want to follow down this crazy world and this crazy road of entrepreneurship?

Lauren Washington:

And if you as a society don't see leaders of color, then why would you jump behind them? Why would you think that that person is going to be successful if they haven't been in the past? And so I think that's a huge barrier that we're having right now.

Lauren Washington:

But I don't think that it's insurmountable. And we're seeing so many new technologies that are coming out where you can use AI to create apps. You can build apps really easily with something like Bubble. And you can really figure out how to get started and get to market without needing that tech background.

Lauren Washington:

It absolutely helps to have it because I think if your core purpose of your company is technology, you should understand it and you should be able to speak it in some way. But I don't think that that needs to be the only factor that comes in in terms of leadership because entrepreneurship, even in the tech space, is so much more than just coding.

Ron Stubblefield:

I know one wise person once told me, "I will take the person who understands the market opportunity and how to take advantage of it than somebody who just understands the tech alone."

Lauren Washington:

Exactly.

Ron Stubblefield:

We know there are more underestimated entrepreneurs, who if they were given the support, would be success stories. But we also know that they're not getting the support they need. So from your perspective, what's needed to generate more success stories so that there are more Laurens of the world, for example?

Lauren Washington:

I think there's a couple of things. I think funding is one, and that's the whole crux of this conversation, is that if you are not given the same access or opportunity to funding, how can you be asked to compete against other people who are? So for example, looking at Black women, they bring on average about $30,000 in funding into their businesses. And I think that's actually jumped this year to maybe around $100,000.

Lauren Washington:

But compare that to the average company overall that brings in over a million dollars of funding. How can you even compare that? They're working with a war chest that is significantly bigger than yours where they can go out and hire the best people and they can go out and pay their bills and pay themselves and not worry about struggling financially. So I think the funding piece is so incredibly important.

Lauren Washington:

And early funding is so important as well because I mentioned the whole idea around generational wealth and how we can't always turn to friends and family to bring in that first initial funding to get started. It's even more important to go downstream in terms of investing and making sure that you are investing at those very early stages because they don't have the same advantages that other people do.

Lauren Washington:

And then I think there's more to that, though. There's so much more around understanding the industry and getting mentorship and advisors within your company who can guide you through in the right way. So I will say for myself in my first company, I struggled through that fundraising process, not only because I didn't understand it, but because I didn't have people around me who understood it and were willing to take me under their wing and show me how to do it.

Lauren Washington:

And so I think there is a significant need for that. But I want to be careful around that because I think oftentimes, what happens within the VC community is that a lot of investors open up their doors for mentorship and that never leads to funding. Whereas oftentimes, it's open up to mentorship and funding for some of our counterparts. So, that alone is not going to change things, but it is an important piece of the puzzle.

Ron Stubblefield:

As you mentioned that, Lauren, I thought of what one good advisor told me many years ago, "You can get a mentor, you can get a sponsor, or you can get a champion." And from what I'm gathering, but I want to make sure that you would agree with the sentiment, what we really [inaudible 00:16:22] champion. We don't necessarily just need mentoring.

Lauren Washington:

Exactly. That's so right. So I think mentoring is great. I have taken advantage of it and benefited from it for many years and I try to pass that down as well, but you need someone who's going to, when they're at the table, bring you to the table as well. You need someone who's going to go out on a limb and vouch for you in situations when you're not there and pull you up.

Lauren Washington:

And that's not necessarily mentorship, I think that's a step beyond it where you are using and putting your own reputation on the line to help somebody else. And we need a lot more of that in entrepreneurship, not only from the VC world, but from other entrepreneurs as well. That when I have made it, I can pull you in as well.

Ron Stubblefield:

And I think that's very important. What are we doing to give back so the next generation has an easier pathway?

Lauren Washington:

Absolutely.

Ron Stubblefield:

So as many entrepreneurial support organizations, venture firms, and a lot of governments are really trying to say, "How do we advance diversity, equity, and inclusion in this space," there are a lot of things that can be said about current responses. So one of the first things I want to talk with you about is really, what are some things you're seeing that have promise? And why, from your perspective, do they have promise?

Lauren Washington:

I'm excited in general. I'll start with the fact that I'm really excited that we're even having these conversations. I think for the last five or six years of being an entrepreneur, I was fighting to have these conversations and bring this to the forefront. And have been told over and over again that, "No, tech is a meritocracy that the best people rise to the top. And if you're not getting funding, it's your fault, essentially. We don't have an issue."

Lauren Washington:

And so the fact that the conversation shifted so drastically last summer, there was a lot that came out of it emotions-wise, but for me I felt like in the overall net, it was positive. It was a positive conversation that we're having. I think it's just the beginning, though. I think there are some really great initiatives that are happening in terms of funding.

Lauren Washington:

So you see the SoftBank's Opportunity Fund. There were a lot of commitments made from Bank of America, Nike, Google. I mean, you can name it. And I think that's just the start, though. I think we need to make sure that it's not just a one-and-done conversation, and that once this money runs out, we feel like we're all equal now, that we're all fixed from the last hundreds of years of inequality.

Lauren Washington:

And I really hope that we move past, as well, these separate but equal funds. So I think it's important to earmark funds at this moment so that you're making sure that funding is getting to these Black entrepreneurs. But I also want to be able to take part in the larger funding opportunities as well.

Lauren Washington:

So yes, the Opportunity Fund for SoftBank is $100 million, but there are other funds that are billions of dollars. And so in terms of access and equality, we need to take that extra step to understand, how are we changing our process overall so that we're not overlooking these underestimated founders and that they do have access and equal opportunity to get funding in the larger pot as well?

Ron Stubblefield:

And I think that's so important here. And I think it speaks to that point about a lot of these places, venture funds [inaudible 00:20:14] go for your deal flow. And we traditionally talk about, I go to a university or certain trusted advisors, and a question I've often asked, and I'm curious to your thoughts, what are you doing for the on-ramps to make more access people to get into the systems to begin with? I'm just curious to hear thoughts on that.

Lauren Washington:

Absolutely. And I think it comes back to the fact that this industry works mostly on warm introductions. I think you have to break that down. And there are a lot of really great funds that are doing this. Steady Light Ventures is one. I believe First Round takes anyone who comes through their website, backstage as well.

Lauren Washington:

And so I think rethinking that idea that you have to have a warm introduction and then that warm introduction boosts you to the top of the list is something that we really need to change. And I think there are great examples of it. As I just mentioned, there's a number of people who are doing it. But we still need to recognize that it's not about the number of people there. It's not a pipeline issue.

Lauren Washington:

There's literally hundreds, if not thousands, of entrepreneurs who are building incredible businesses. It's about access. It's about how they're able to get access and get a seat at that table. And we need to start by removing this idea of warm introductions and creating other ways and other processes to get to that table.

Ron Stubblefield:

I remember talking with a leader of a particular VC firm, who went, "Well, if people were really, really building great companies, they wouldn't migrate to other cities to try to raise capital." And my experience from working with enough of my friends from Morehouse or Spelman, they've had to move to go to places where they would get a shot to be considered. Curious to your thoughts on that perspective.

Lauren Washington:

Absolutely. And we see that as well in our data. So last year, Black Woman Talk Tech put out a research report. And we've been seeing this over the last couple of years, that we're not concentrated in Silicon Valley. And the reason is, when we moved to Silicon Valley, that hasn't been beneficial for us. So we go to Silicon Valley, and then we're not getting funded, and we're in this incredibly expensive place where doors are not opening for us. Why would we want to stay there?

Lauren Washington:

Also, we have to think a little bit about the lifestyle and choices that we make as founders. And I think this idea around giving up everything, sleeping on a couch of your friends in Silicon Valley, and foregoing all other responsibilities to build this business out doesn't resonate with Black women. And sometimes it can't because they have families, because they're the breadwinners, because there are a million other pieces that come into it.

Lauren Washington:

And I think when we only myopically look at a founder and their commitment to their business through that one lens, it unfortunately rules out all these other people who are incredibly scrappy, who have built something from nothing and have the ability to do it, but they're doing it their own way that makes sense for them. So I think it's a larger conversation that we need to have, whether it's around your city or lifestyle, that it's not a one-size-fits-all prospect.

Lauren Washington:

And often, we see that those who are able to jump all in and be full-time entrepreneurs in these very expensive cities have the privilege to do so. They have the financial backing and the financial net to do that. And oftentimes, most Black people, and particularly Black women, just don't have that.

Ron Stubblefield:

Oh, what? You mean the people on the downside of the generational wealth cap don't have the wealth to be able to afford to take off for a few years and see if something can work out? Who knew?

Lauren Washington:

Exactly.

Ron Stubblefield:

Who knew? So I know as many places such as Cleveland, for example, have asked, "What can we as VCs do to try to make Cleveland a destination spot for Black entrepreneurial talent?" My first question for you it's, where are some good cities that are really doing good and where Black entrepreneurs tend to be thriving better than other places in this country?

Lauren Washington:

I think that they're doing really well in Atlanta. I think Miami is starting to come up as a place for Black entrepreneurs. We did our Black Men Talk Tech conference down there. And I think the reason why is because their support network there is so strong.

Lauren Washington:

And as an entrepreneur, you need a lot of support. You need a lot of people around you who are building you up and bringing you through this incredibly difficult journey from not only investors, and not just having investors there within the ecosystem, but investors who are willing to write those checks for Black people is incredibly important. Having other entrepreneurs there who you can have access to and you can talk to and grow and learn from. Having various foundations.

Lauren Washington:

So for example, in Miami, they have the Knight Foundation that has great programming around tech entrepreneurship, accelerators. So there needs to be a really strong ecosystem. And I've lived in both. As an entrepreneur, I've lived places. Currently in Austin. It has a very strong ecosystem for founders. And that experience is significantly different from living somewhere else that doesn't, and how quickly you can move and grow when you do have access and when you do have that support.

Ron Stubblefield:

Right. So I think as probably one key point I'm taking away, capital's absolutely necessary, but it's more than just capital.

Lauren Washington:

Absolutely, absolutely. And I think right next to capital is having other entrepreneurs with you on that journey. I would not underestimate that. I think having other people who understand what you're going through, who you can talk to about these very specific issues of leadership and when you're hitting a wall, how do you move past it, that is so incredibly important. And if you don't have, not only a large number of founders around you, but access to them and the ability to easily create networks and create groups, that can be a significant barrier.

Ron Stubblefield:

And then I think another thing that's very important is understanding, what do we mean when we say the Black community? Because I'm not sure about you, but I'm going, there's no one spokesperson for the Black community because we're a diverse group of people with different needs.

Ron Stubblefield:

For example, I could think of how there are specific needs that Black men have in entrepreneurship that Black women, it's a different conversation, especially when we talk about Black mothers. So I'm just curious to your thoughts on, what do you hope people who are trying to support Black entrepreneurs really understand around the concept of intersectionality?

Lauren Washington:

Absolutely. And that was the main reason why we started Black Woman Talk Tech to begin with, was because we didn't feel like we saw our story reflected anywhere within the conversation. And that intersectionality piece is so important. And I can tell you so many times when I have gone into a pitch with investors and you're not only getting the race side of biases, but then you're also getting the gender side of biases.

Lauren Washington:

So people are looking at you in a very specific lens that you have to use different tactics to overcome. So even though I think Black men absolutely have a funding gap as well, when you look at the numbers, there's still probably about 10 times more funding going to Black men than Black women. When you're looking at how Black women need to take care of their families and their home responsibilities on top of being a founder, that is incredibly different.

Lauren Washington:

And so really understanding that there are different issues that come to the table and it's not a one-size-fit-all DEI solution to this, and really listening to what those issues are is going to be important if we want to make any kind of significant change.

Ron Stubblefield:

All right. And I think of significant change. I've been in enough places where every VCs or groups talk about, well, how can we help Black entrepreneurs, but they talk about in the lens of accomplishing their personal goals. And I haven't seen a lot of people ask the question, what exactly are some different community goals that the entrepreneurs we're trying to help actually have?

Ron Stubblefield:

So I know this is something that's been a very popular soapbox for you and I to both get on on numerous occasions. So I'm going to ask you go on that soapbox again and really walk through things people need to keep in mind about what are some goals different people in our community have around entrepreneurship, and why we have them?

Lauren Washington:

Absolutely. Yeah, I love that question. So I think the main goal, at least anecdotally, from when I talk to founders is building wealth. And it's not building wealth just for themselves. Obviously, they're interested in doing that and having that financial security for them and their family and for generations to come, but it's building wealth for the community at large.

Lauren Washington:

And I think when you bring wealth into the community, and there's a number of people who have become successful, there's power in that. There's power to make change when you have the wealth and you have the ability to write your own checks, and particularly if you have been a founder. And I think there's a very different lens that you bring as a founder turned investor, versus someone who just becomes an investor. You understand the real issues and hardships around that and you're able to better pick out companies and founders that might be able to navigate those to win.

Lauren Washington:

And that's actually been proven by research that entrepreneurs make incredible investors because they've been through it before and they know what to look out for. And so when you have a number of these entrepreneurs, a lot of them have the goal of taking this wealth and not only investing, but putting it back into the community in a number of different ways. There's a lot of people I know now who are talking about opportunity zones and investing in those. That's a very particular Black issue.

Lauren Washington:

And the reason why people want to do that is to shift their neighborhoods that they grew up in and take them back from the gentrification that's happening. So there's a lot of different reasons, but I would say wealth in and of itself for people is a conduit to changing the community, changing opportunities for people, and really being able to bring those to the table that they haven't had in the past.

Ron Stubblefield:

I remember talking with somebody else about this and he went, "And this is why I'm not trying to work with just any investor, if I need an investor at all." And I think that's something nice to hear from you, Lauren, as an operator to think and elaborate on that a little more.

Lauren Washington:

And I think I've heard this a lot from Black founders, is that there is sometimes a hesitancy to even raise money. And I think we have to understand, again, that everyone's goals are different. I think when you have wealth that you may not have seen before that is at your fingertips and available and it's there to grab, it's hard to then give that away.

Lauren Washington:

So the whole idea and the whole concept of venture capital from a founder's perspective is that you have to give away a significant amount of your company, a case, a significant amount of your wealth, in order to get that funding. It's an exchange for it. And yes, of course the whole idea is that you get a lot of money in your business. You may have 10% or less of that business, but you're having a smaller amount of a large pie.

Lauren Washington:

But I think when you talk to Black people who have not had any amount of any pie, that's a hard concept to grasp. To give that up and to give ownership of something when we have not had significant ownership within our community for such a long time is a really tough sell for a lot of Black entrepreneurs. And I think we really need to think that through as well as we're talking about changing venture capital and understanding that those are some of the pieces that come and some of the history that comes with raising capital.

Ron Stubblefield:

Really great points, Lauren. Another question I have to come up and ask now because I really think this is important. I want to go back to something you said, separate but equal funding and programming. And something a lot of entrepreneurs I've seen are going, "Well, why are you trying to pigeon-hole me into X, Y, and Z?" And a lot of people come back with the, "Well, we're really trying to be helpful, be helpful," and they talk about their intent. But can you walk us through why the intent isn't enough?

Lauren Washington:

Yeah. I think the intent is great and I think it's a first step. I think acknowledging the issue and putting different programs or strategies or plans into place to work on that issue is really important. But unfortunately, I think I had mentioned before that often, these separate funds are nowhere near the actual funds that other people have access to.

Lauren Washington:

And so when you're thinking about not only initial check size, so if you have a fund of $5 million, that's set aside, how many entrepreneurs or how many startups can you actually fund with that amount of money? So the check size not only goes down, but then the follow-on funding is also an issue as well.

Lauren Washington:

So yes, this is great for that first initial round, but will there be more funding later? And I think a lot of people do have that foresight to make sure that they're doing well in this first fund so that they can build it out in the future. But I don't know that everyone is really thinking that way, that it's not just about that first initial check, it's about every round thereafter.

Lauren Washington:

And then the other issue is that a lot of these funds have much higher barriers to get into. And so I can say this from personal experience that I have pitched these firms before and they had special DEI funds, but I had to go through the MBWE process. So I had to get certified as a Black or woman entrepreneur through the government. That is a long process.

Lauren Washington:

I mean, that could take months if not years to do. And so I not only have a smaller bucket that I'm going after, but now I have to jump through a lot more hoops in order to get there for a smaller amount of money. And so I think the intent is good, but if you're thinking about the overall process, how are you making this equal if we have to work 10 times harder to get a smaller amount of money?

Ron Stubblefield:

Right. And I think now is an important time for those who want to be good allies to be advised. There's a whole history of Jim Crow's separate but allegedly equal. Hint, it was never equal. And this reinforces and reminds us of that trauma. And I think it's very important that it has to get reminded here.

Ron Stubblefield:

So as we're wrapping up this interview, three basic questions I have left. First, we're watching a lot of people who are hiring for more DEI support. And there was no doubt [inaudible 00:36:35]. I like to see more portfolio managers of color. I'd like to see more accountability officers of color. But why is simply just hiring more people of color not sufficient to address these issues?

Lauren Washington:

I think hiring is great. I think I want to see more people of color in these positions as well. I think I'm tired of going to meetings and I'm the only Black face in the room, particularly when there's funding or some other partnership or opportunity on the line. But I think you can't hire to change the system. It goes back to the same conversation we were having before that the people who are victims of oppression and victims of that system cannot be the ones to change it.

Lauren Washington:

And so if you bring somebody in and they don't have sufficient power within not only that organization, but the system as a whole, how can any significant change be made? So I think unfortunately what happens is sometimes people come in and they're the face. It's this performative aspect of DEI. But what kind of power are they given? If you have a Chief Diversity Officer in your company, does that person have a budget? Does that person have a team? Does that person sit in board meetings? Do they have true power within the organization? And oftentimes I've seen that they don't.

Lauren Washington:

You'd be surprised how many don't have budgets and don't have teams for these very large corporations. And so it's not just about putting somebody as a figurehead, it's about giving them true power to change. And I truly believe that that has to come from the top. It's not just about hiring one or two people. It's about making sure that your DEI goals are part of your company goals and that they are looked at in the same way that if we don't meet them, there will be consequences to it.

Lauren Washington:

And I don't think that we've taken that approach yet, hopefully we'll get there soon, but I do think there needs to be a shift in that font that it's not just about diversity, it's about that second piece. It's about inclusion and inclusion into power.

Ron Stubblefield:

Thank you so much for that. So we'll be remiss without giving some entrepreneur or some advice before we go. So I look from your perspective, somebody who's been there, done that and got the t-shirt and decided to do it again. What are the risk of VC investment? When does VC make sense? And when is it not worth it?

Lauren Washington:

That's a great question. So some of the risks around VC investment are ones that I had mentioned a little earlier. You are giving up a significant amount of your company, and these are now people who you're going to be working with for possibly 10 years or more. So thinking that through, understanding that, it's not just that you get a million dollars and you get to walk away with it. There are responsibilities that come with that money and there are significant expectations that come with that money.

Lauren Washington:

So once you bring venture capital into your business, you have to understand that they are looking for a return. That's the main reason why people invest is to get a return on their money. And so they're expecting you to grow significantly, grow fast, and get them a return, ideally, of 10X. So are you ready to put in that time and effort over the next five to 10 years to do that because it's a lifestyle at that point. It's a lifestyle choice.

Lauren Washington:

It's not just that you get this money and you get to ride and do whatever you want. You truly are shifting your entire life around meeting those expectations. And with that said, I think there are companies that don't fit that. And I don't even think that every scalable company needs to raise money either. You have to understand whether that works for you and that's the best way to get there.

Lauren Washington:

I know a ton of women who have raised a lot of money through grants, and there's not that responsibility when it comes to grants. Or who've raised money through pitch competitions. Or even people who brought in loans for their business because they really wanted to build it their way and hold on to a significant amount of equity. I think there's also a number of businesses that most likely are not right for a venture capital.

Lauren Washington:

So you'll likely see brick and mortar retail stores, hospitality, a lot of these businesses that don't necessarily, as I like to say, make money in their sleep if you have to make money because you're there physically. And if you can't just turn it on and constantly [inaudible 00:41:29] and make money while you're asleep, then that's probably not right for venture capital.

Lauren Washington:

So I would think a little bit about that as well. That again, the world is small, the industry is small, know the type of people that you are coming to talk to when you're looking for investment, and know that you are in the right category for that investment as well.

Ron Stubblefield:

Great wisdom. And I think it echoes what the Kauffman Foundation explained that by and large, for the majority of business owners, venture capital is irrelevant. So make sure when you bring it to your business, it's because it makes sense, it's necessary to help you grow, and you're ready to meet the obligations that come with it.

Lauren Washington:

Absolutely, yeah. And I think that that last piece is so important that venture capital is not the goal. And I think oftentimes, particularly in the Black community, we look at raising money as the goal of your business. It is not. It follows success and it fuels your business.

Lauren Washington:

So don't look at raising a million dollars as a milestone for you to check off. You should be looking at raising that million dollars as a way to build a company that already has legs and has already proven itself to get to that next level.

Lauren Washington:

And if you don't do it, that doesn't mean that you're a failure. It doesn't mean your business is not worthwhile. It doesn't even mean that it couldn't be a billion dollar business. It just means that it may not be right for funding at that moment and for the amount of funding that you're looking for.

Ron Stubblefield:

So I guess, Lauren, from you, you want to brag about my business is a billion dollars, not I owe a VC a billion dollars. [inaudible 00:43:08] right?

Lauren Washington:

Yep, exactly. That's the right mindset.

Ron Stubblefield:

Okay. Great. So on that note, any final thoughts and insights or resources you want to share with our listening audience today?

Lauren Washington:

I think the final thoughts are to get into this world if you want to. I think there's a lot of hesitation around becoming an entrepreneur. And I understand that it's not for everybody. And particularly, like I said, this VC backed entrepreneurship is not for everybody.

Lauren Washington:

But if it is something that you want to do, look towards these incredible examples recently of Calendly and Cityblock and Squire, and a number of these individuals who are able to not only grow sustainable, incredible, scalable businesses, but then get the VC backing to take them to that next level.

Lauren Washington:

I'm really excited to see some IPOs come out in the next couple of years. And I think if you want to get into this world, there's no better time to do it than right now. So I would just suggest people to find your community, find like-minded, people get started if this is something you want to do because now is your moment.

Ray Leach:

I really enjoyed hearing today's conversation with Lauren and Ron. They're part of a growing group of voices changing the conversations and conventions in tech entrepreneurship and venture capital. I'm Ray leech and I'd like to thank you for listening.

Ray Leach:

Don't miss the next episode of Innovation In Equality when JumpStart's Chief Inclusion and Outreach Officer, Lamont Mackley joins news anchor, Russ Mitchell, for a conversation about how an inclusive tech community is tied to regional and community growth.

Ray Leach:

Consider subscribing wherever you listen to podcasts. And if you would, please help us out with a great rating and a quick review. Innovation In Equality is a production of Evergreen Podcasts. Thanks to our producer and audio engineer, Dave Douglas, and co-producer, Vicki McDonald.

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