Even with these developments, blacks still are not plugged into prime capital sources in Silicon Valley, birthplace of the semiconductor and home to leading tech giants Apple, Intel, and Google, among others. To position their companies for financing and create a platform to grow into industry leaders, black entrepreneurs must take a number of steps: develop a strong concept; build a top-flight, technical team; create an infrastructure to protect ideas and fully execute business models; and cultivate a powerful business network.
Says Stanley T. Smith Jr., a principal at Syncom Venture Partners (No. 7 on the be private equity firms list with $410 million in capital under management): “Venture capitalists are skilled at pattern recognition and tend to invest based on identified patterns that have resulted in successful investments. One of the most common patterns employed by investors is investing in entrepreneurs from their ecosystems—people they know or people that have been referred from trusted sources. If you are not a member of an investors extended ‘trust’ network then it is proportionally more difficult to earn their trust and investment dollars. Often, but not always, investment decisions are made based on access and familiarity rather than color or ethnicity.”
Company Black Web 2.0
Description A technology and new media
site targeting African Americans.
Rewiring The Tech Business
Angela Benton, founder and CEO of Black Web Media L.L.C., which produces the popular tech blog Black Web 2.0, and creator of mobile location-based app Cued, was inspired to help start the NewMe accelerator after organizing a conference last year in which approximately 100 entrepreneurs and policymakers reviewed barriers that kept minority firms from evolving to the level of Twitter and Facebook. “Those entrepreneurs felt like they weren’t ingrained in the industry and it has hindered their success, not necessarily because of race but because of location,” says Benton, who left Charlotte, North Carolina, to join the seven other NewMe participants. “It’s hard to get in the Silicon Valley network if you’re not vetted by somebody who is already very successful.”
(Continued on next page)