A new study with research support from Brock University has found 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.
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, FoundHers is the inaugural report in a series.
Released Wednesday, June 23 by Pitch Better Canada, the study found that almost 60 per cent of Black women entrepreneurs have a bachelor’s degree or higher. However, 43 per cent of for-profit and 37 per cent of not-for-profit founders have never secured external funding. More than 60 per cent of for-profit businesses have self-funded their organizations up to $100,000.
“This data is telling us that many brilliant Black women entrepreneurs and social impact organizations have been held back from success,” said Paulette Senior, President and CEO of the Canadian Women’s Foundation. “The economic cost of this reality and its human toll can’t be overstated. The way to break the systemic barriers is to listen carefully to these entrepreneurs and move forward with the right changes and resources.”
When asked about ecosystem support available to them through accelerators and community-based programs, more than 90 per cent indicated 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 importance and need for data and research on Black women founders is very clear,” said Brock President Gervan Fearon. “This study significantly contributes to this gap and without question opens new avenues for continuous research and engagement. The key findings show the economic contributions and potential of Black women-led businesses as a vital component of the Canadian economy, which are advanced when appropriate support mechanisms are also provided.”
The need for immediate government and institutional attention and support is critical because 45 per cent of Black women entrepreneurs identify their business lifecycle at a growth phase. However, 41 per cent of respondents reported that the global pandemic has significantly impacted their revenue and/or profit, seriously impeding their growth prospects.
Pitch Better co-founder Amoye Henry said “support mechanisms should go beyond financing to scale up these businesses because about 70 per cent 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,” said Minister of Families, Children and Social Development 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.”
One of the unique features of the study is the concurrent launch of the FoundHers interactive dashboard featuring more than 1,000 Black women-owned businesses and non-profit organizations across Canada as the groundwork for a sustainable networking and knowledge sharing hub. In addition, the dashboard will provide investors and venture capital institutions with insights into these businesses to better facilitate investment partnerships. It provides a simple, searchable way to find and connect with businesses within a specific industry or region who are actively looking to raise capital.
FoundHers reinforces Pitch Better’s commitment to support diverse women entrepreneurs across Canada in scaling, building capacity and raising capital. The dashboard in particular will give Black women founders the opportunity to put their businesses in front of potential advisors and investors who can help scale-up their businesses.
To view the findings in detail, visit foundhers.ca