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

A health worker holds a vial of AstraZeneca vaccine to be administered to members of the police at a COVID-19 vaccination center in Mainz, Germany, Thursday, Feb. 25, 2021. (Andreas Arnold/dpa via AP)
43 new COVID-19 cases in Interior Health

368 cases in the region remain active

The Williams Lake Trail Riders Arena is slated to have a new roof installed this spring after funding from the province’s Community Economic Recovery Infrastructure Program. (Greg Sabatino photo - Williams Lake Tribune)
Trail Riders Arena, stable stalls, to get new roof at Stampede Grounds

Some of the stalls currently aren’t able to be rented out due to leaks in the roof

A sign is seen this past summer outside Yunesit’in Government office west of Williams Lake reminding visitors and members to stay safe amid the COVID-19 pandemic. (Rebecca Dyok photo)
Yunesit’in First Nation completes second round of vaccinations

A total of 26 people have since recovered from COVID-19 after having tested positive

A 100 Mile RCMP officer stands watch at the intersction of Highway 97 and Horse Lake Road. (Patrick Davies photo - 100 Mile Free Press)
Volunteers, police search Highway 97 for articles related to high-speed chase

Search will stretch from Canco Gas Station in Lac La Hache to 150 Mile House.

An aerial photograph captures snowmobile tracks in the Cameron Ridge area earlier this year, which is closed to snowmobilers. The closures are in place to protect sensitive caribou herds. (Conservation Officer Service photo)
Snowmobilers fined for operating in closed caribou habitat near Likely, B.C.

The investigation revealed they had spent several hours in the closure leaving extensive tracks

Health Minister Adrian Dix looks on as Dr. Bonnie Henry pauses for a moment as she gives her daily media briefing regarding COVID-19 for British Columbia in Victoria, B.C. THE CANADIAN PRESS/Jonathan Hayward
7 additional deaths and 542 new COVID-19 cases in B.C.

Provincial health officials reported 18 new COVID-19 cases linked to variants of concern

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The City of Vancouver estimates there are 3,500 Canada geese in the city right now, and that number is growing. (Bruce Hogarth)
Help tame Vancouver’s Canada goose population by reporting nests: park officials

The city is asking residents to be on the lookout so staff can remove nests or addle eggs

Chief Justice Christopher Hinkson (Office of the Chief Justice)
Judge questions whether B.C.’s top doctor appreciated right to religious freedom

Lawyer for province says Dr. Henry has outlined the reasons for her orders publicly

A sample of guns seized at the Pacific Highway border crossing from the U.S. into B.C. in 2014. Guns smuggled from the U.S. are used in criminal activity, often associated with drug gangs. (Canada Border Service Agency)
B.C. moves to seize vehicles transporting illegal firearms

Bill bans sale of imitation or BB guns to young people

BC Housing minister David Eby is concerned that Penticton council’s decision to close a local homeless shelter will result in a “tent city” similar to this one in Everett, Wa. (Olivia Vanni / Black Press file)
‘Disappointed and baffled’ B.C. housing minister warns of tent city in Penticton

Penticton council’s decision to close a local homeless shelter could create tent city, says David Eby

A recently published study out of UBC has found a link between life satisfaction levels and overall health. (Pixabay)
Satisfied with life? It’s likely you’re healthier for it: UBC study

UBC psychologists have found those more satisfied with their life have a 26% reduced risk of dying

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

A vial of Oxford-AstraZeneca COVID-19 vaccine is pictured at a family doctor office, Thursday, Feb. 25, 2021 in Paris. THE CANADIAN PRESS/AP -Christophe Ena
Trudeau ‘optimistic’ that timeline for rollout of COVID vaccines can be accelerated

Canada set to receive more than 6M COVID-19 vaccine dose than initially expected, by end of March

Most Read