Lola Adeyemi, a Nigerian entrepreneur, poses with a few of her African soup products, which are now sold in Sobeys and other Canadian grocery retailers, in Toronto on Friday, February 5, 2021. THE CANADIAN PRESS/Nathan Denette

Lola Adeyemi, a Nigerian entrepreneur, poses with a few of her African soup products, which are now sold in Sobeys and other Canadian grocery retailers, in Toronto on Friday, February 5, 2021. THE CANADIAN PRESS/Nathan Denette

‘I don’t want to be a unicorn’: Black founders struggle to raise venture capital

Quantifying how much less funding Black business owners get is tough because it’s seldom tracked in Canada

When Lola Adeyemi started a company making chickpea stews and roasted carrot soups like the ones she grew up eating in Africa, she was expecting an uphill battle.

The food industry has notoriously low margins and fighting for grocery store space alongside longtime household brands can be difficult — and that’s before one factors in Adeyemi’s race.

The Toronto woman, who was raised in Nigeria, dipped into savings, landed loans and grants and turned to her husband’s small consulting business to start It’s Souper.

Her products can be found on shelves at Sobeys, McEwan and Foodland Ontario, but Adeyemi wishes it was easier for entrepreneurs like her to find support.

“I don’t want to be a unicorn. I don’t want to be the only Black female and immigrant entrepreneur here,” said Adeyemi, as she drove around dropping off samples to potential customers.

“I want others to be here too.”

Her experience is common for Black entrepreneurs in Canada. They often find themselves underfunded and unsupported by venture capitalists, who pour money into companies run by people in their existing networks, which are predominantly white and male.

Quantifying how much less funding Black business owners are receiving is tough because such metrics are seldom tracked in Canada, but entrepreneurs and investors estimate it to be on par with — or even worse than — the U.S.

Less than one per cent of the US$543 billion in venture capital offered in the U.S. between 2015 and 2019 was given to Black and African American founders, according to business information platform Crunchbase. That’s just US$4.9 billion.

Meanwhile, only two of 300 grants the Canadian government offered women-owned businesses went to Black-run companies in 2018, said Amoye Henry, the co-founder of Pitch Better Canada, which helps under-represented communities access capital.

Pitch Better has so far offered pitching advice to 306 Canadian companies and helped 50 find funding.

“People want to give money to and invest in people and things they’re very comfortable with, that look like them and that they can trust will get their money back,” she said.

Black business owners without university or Ivy League educations lack connections with wealthy alumni networks that offer ties to Bay Street or Silicon Valley.

The few that secure some funding are often resistant to taking it because they can’t rely on family, friends or banks if they run into trouble, she added.

“They just feel like they won’t be able to pay the debt back … white people will just take on the debt and try anyways,” Henry said.

She and Pitch Better Canada co-founder Adeela Carter have had to plead with Black founders to take sums as low as $150,000.

“I remember saying I will help you find the money (if it comes to that), just take the money,” said Henry, of one situation.

“(The founder) was just like ‘I don’t want to ruin the opportunity for future black founders, if I take it and I can’t pay it back.’”

Isaac Olowolafe Jr. has worked with early-stage financing since 2015, when he noticed a dearth of Black founders in Canada and started Dream Maker Ventures, an investment arm for his real estate-focused asset management firm.

By 2019, he was also running the Black Innovation Fellowship, a Ryerson University-backed initiative to support Black-led startups.

However, he’s an anomaly. A 2019 study from the Canadian Venture Capital Association showed that only eight partners at the 145 private equity firms surveyed were “visible minorities.”

Black people made up 3.5 per cent of Canada’s population in 2016, according to the latest figures from Statistics Canada. Visible minorities made up 15.6 per cent of the population that year.

Of the 132 partners at surveyed venture capital firms, the association found only 24 partners or 18 per cent were visible minorities.

The survey did not specify how many of those partners were Black, but Henry and Olowolafe Jr. said there are few in Canada and that’s part of the problem.

Many of the Black entrepreneurs behind funds keep a low profile, said Henry, because they only have so much money to disperse and they worry that advertising their willingness to invest in the community will make them a magnet for too many pitches they can’t support.

But even getting to that point is tough, Olowolafe Jr. pointed out.

Olowolafe Jr. believes raising venture capital for Black entrepreneurs relies on relationships because investors will write cheques for people they know and trust.

“It’s not about recreating the wheel, but basically doubling down on what works for other communities and bringing it back to the Black community,” he said.

Addressing unconscious bias is also part of the solution, said Ariel Gough, the co-founder of Nova Scotia-based fragrance company Bailly.

“Everybody has unconscious bias based on their experience, how they grew up and who they were around, but it’s important we recognize that we may not be judging entrepreneurs solely on their ideas or their objectives or their potential,” she said.

ALSO READ: Reclaiming Hogan’s Alley: Society pitches new life for historic Black Vancouver area

Venture capitalists, she said, want to see traction, but getting there takes money most Black founders don’t have.

“It can be very discouraging coming out of those meetings,” Gough said. “You often feel like all the hard work you have put into your business has not got you anywhere.”

Adeyemi noticed funding opportunities have slowly cropped up for Black entrepreneurs after the death of George Floyd in police custody last year.

As companies pledged to help Black communities more, she found a $75,000 grant, but she’s always conscious that the momentum incidents like Floyd’s death created can easily dissipate.

That would be a shame, she said, because the benefits of investing in Black entrepreneurs are widespread.

“When you empower people that are marginalized or even just a black community, you’re empowering the whole country.”

Tara Deschamps, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Black History Month

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

file photo
County Council discusses new tax incentives for non-residential properties

County of Wetaskiwin Council discussed new tax incentives for non-residential properties at… Continue reading

Screen grab/ Government of Alberta COVID-19 aggregate data map
City of Wetaskiwin down to just five active cases

Active COVID-19 cases in the City of Wetaskiwin continue to decline.

Alberta's chief medical officer of health Dr. Deena Hinshaw says Albertans need to keep making safe choices to start bending the curve back down. (Photo by Chris Schwarz/Government of Alberta)
One new COVID-19 death in Red Deer, 257 additional cases province-wide

Red Deer sits at 459 active cases of the virus

File photo
Norris Beach Road Tender Approved

County of Wetaskiwin Council awarded the tender for Range Road 11 to Crow Enterprises Ltd.

A health-care worker looks at a dose of the COVID-19 vaccine at the Palais de Congress site as Quebec begins mass vaccinations based on age across the province, Monday, March 1, 2021 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
Nearly 1 million COVID-19 vaccine doses arriving in Canada this week: Anand

Anita Anand says she’s received assurances from the vaccine manufacturer

A vial of some of the first 500,000 of the two million AstraZeneca COVID-19 vaccine doses that Canada has secured through a deal with the Serum Institute of India in partnership with Verity Pharma at a facility in Milton, Ont., on Wednesday, March 3, 2021. THE CANADIAN PRESS/Carlos Osorio - POOL
Federal panel recommends 4-month gap between COVID vaccine doses due to limited supply

The recommendation applies to all COVID-19 vaccines currently approved in Canada

Maskwacis virtual job fair
MEC goes virtual with job fair and services during pandemic

By Chevi Rabbit For Ponoka News Maskwacis Employment Center’s (MEC’s) semi-annual job… Continue reading

hands
The call is out in Rimbey to sign on with a group that is all about building connections

‘Already, we are building a network where we can rely on each other and help each other out’

FILE - Dolly Parton arrives at the 61st annual Grammy Awards on Feb. 10, 2019, in Los Angeles. The Grammy-winning singer, actor and humanitarian posted a video on Tuesday, March 2, 2021, of her singing just before getting her COVID-19 vaccine shot. Parton donated $1 million to Vanderbilt University Medical Center in Nashville, Tennessee for coronavirus research. (Photo by Jordan Strauss/Invision/AP, File)
‘Vaccine, vaccine’: Dolly sings ‘Jolene’ rewrite before shot

The Grammy-winning legend turned 75 this year

Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks about the Fiscal update during a news conference in Ottawa, Monday November 30, 2020. THE CANADIAN PRESS/Adrian Wyld
COVID-19: Wage and rent subsidies, lockdown support to be extended until June

Chrystia Freeland says now is not time to lower levels of support

Many rural seniors are having to travel a long way to get vaccinated against COVID-19. Stettler residents are being told to go to Red Deer, Drumheller or Camrose. (Black Press file photo).
Rural central Alberta seniors have to travel far to get vaccines

Stettler residents are being directed to Red Deer, Drumheller or Camrose clinics

Samantha Sharpe, 25, was stabbed to death at Sunchild First Nation on Dec. 12, 2018. Chelsey Lagrelle was sentenced to 4.5 years in prison for manslaughter in a Red Deer courtroom on Tuesday. Photo contributed
Central Alberta woman sentenced to 4 1/2 years for stabbing friend to death in 2018

Chelsey Lagrelle earlier pleaded guilty to stabbing Samantha Sharpe during argument

Calgary police say they received 80 hate crime complaints between January and November 2020. (Pixabay)
‘Racism is a real problem:’ Muslim women fearful following attacks in Edmonton

So far in 2021, three of seven hate-crime-related investigations have involved Somali-Muslim women

Most Read