Detroit is a city of builders. From the assembly line to startup incubators, innovation is woven into its history. But when it comes to access to capital, not every builder starts on equal footing, especially Black entrepreneurs.
Across the country, Black founders continue to face an uphill battle when raising money for their businesses. In 2023, they received less than half a percent of all venture capital distributed in the U.S., according to data from Crunchbase. That gap has held steady for years, despite growing awareness and commitments from investors to improve racial equity in funding.
Nationally, the venture capital landscape reveals stark disparities. In 2023, Black founders secured only 0.48% of all venture capital funding in the United States, amounting to approximately $661 million out of $136 billion. This underrepresentation persists despite evidence that startups led by Black entrepreneurs are just as likely to succeed as their counterparts.
Recognizing the persistent funding gap, several Detroit-based initiatives are stepping in to provide capital and support tailored to Black entrepreneurs. Venture 313, a $10 million, three-year initiative backed by the Gilbert Family Foundation, offers investments ranging from $500 to $250,000 through a mix of grants and equity-like funding, along with business programming and networking opportunities.
Black Leaders Detroit, in partnership with Operations School, launched the Co-Operations Grant Initiative to award $5,000 grants to 20 Black-owned businesses in Wayne and Oakland Counties, pairing the funding with a one-day business education course.
Dwan Dandridge, Co-Founder and CEO of Black Leaders Detroit, emphasized that Black entrepreneurs and workers have historically created significant wealth. As of May 1st, $4,891,750 has been distributed to businesses and organizations led by Detroiters of African descent and gearing up for year 5 of the Ride for Equity to Tulsa’s Black Street.
“So we’re asking, are we there yet?” Dandridge said.
“We’re wondering where we’re trying to go, we’re trying to get to a place where,there’s equal access to capital for all entrepreneurs, right? We still know that there are huge disparities. We’re still working, trying to get to that place where we can say that Black entrepreneurs are receiving equal access to capital.”
Jacquie Munson Gaines, CEO of JMG Connects, emphasized how simple the loan process was as she was starting her own business when she started working with Black Leaders Detroit.
“As long as you have your documentation, you can move through the process quickly. I felt like I got updates timely,” Gaines said.
“Larenz was on it! So, every time I updated a document, the system would let me know if I had a question. My phone calls were always returned. If I sent an email, the response was prompt. Simple.”
Meanwhile, the TechTown Startup Fund supports Black-owned startups in Detroit by providing targeted funding tied to specific growth milestones, identified in collaboration with TechTown’s entrepreneurs-in-residence.
Despite these efforts, many Black entrepreneurs in Detroit continue to face hurdles in securing funding.
While initiatives like Venture 313 and the Co-Operations Grant Initiative represent significant strides toward funding equity, the journey is far from over. Continued investment, mentorship, and systemic change are essential to ensure that Black innovators in Detroit have the resources and support they need to thrive.
As Detroit evolves into a hub for innovation, the city’s dedication to inclusivity and equity will play a crucial role in the success of its entrepreneurial ecosystem. By addressing funding disparities and elevating the voices of Black entrepreneurs, Detroit has the potential to set a precedent for cities across the nation.
