Three prominent players in the Canadian startup ecosystem share insights on the challenges faced by Black founders.
Organizations that encourage diversity in the workplace reap benefits ranging from more innovation and employee engagement to a larger talent pool, and even a healthier bottom line. To expand its reach, the Black founder community is rallying to foster the same level of inclusion in the broader startup ecosystem to ensure all entrepreneurs have equitable access to the capital, networks, and opportunities essential to their companies’ success.
While there are signs the entrepreneurial landscape for Black founders is improving, systemic barriers still exist. According to a study by the Canadian Black Chamber of Commerce (CBCC) personal development and mentorship are among the most pressing needs facing Black business owners, as well as securing and qualifying for capital. Lack of access to such important resources is a clear hindrance to entrepreneurial success. Additionally, second-generation Black Canadians continue to earn significantly less than their counterparts, despite having the same university attainment rates.
To delve into the challenges facing Black founders, RBCx spoke to three prominent players in the Canadian startup ecosystem. Lise Birikundavyi is the co-founder and managing partner of BKR Capital, the first institutionally backed Black-led VC fund in Canada. Sean Green is the co-founder and CEO of ARTERNAL, a fast-growing B2B vertically integrated SaaS platform for the art world. Alfred Burgesson is the founder and CEO of Tribe Network, a community of Black, Indigenous, and People of Colour pursuing technology, entrepreneurship and innovation in Canada, based out of Halifax, Nova Scotia. The panel was led by David Eboh, AVP Relationship Management, Venture Capital, RBCx.
They shared their perspectives on what it takes to succeed as a Black founder in the Canadian tech ecosystem and where change is needed to tear down barriers to success.
“Conversations have a different tone now, more hope, more drive.”
Birikundavyi has seen the entrepreneurial landscape for Black-owned startups evolve for the better. “Conversations have a different tone now, more hope, more drive,” she says, noting Black communities are coming together more and more to leverage one another’s strengths and drive their collective success.
Green, whose company, ARTERNAL, is part of BKR’s portfolio of startups, has also noticed a positive shift since he founded his company. “It’s promising to see how the landscape of Venture is changing. I’m a Black founder with a Black VC firm as lead investor, something that I would not have been able to see when I started” he says. “It’s a start, but how do we do more?”
Black founders need better access to capital
As any founder will attest, one of the keys to building and scaling a tech startup is access to capital. For cash-burning early-stage startups, raising funds is often one of the biggest challenges a founder faces. Potential funding sources include family and friends, angel investors, accelerators, government grants or tax incentives, and venture capital.
“We do friends and friends, not friends and family. Most of us don’t have generational wealth.”
“For us, it’s so hard to figure out how to raise capital,” he says. “We do friends and friends, not friends and family. Most of us don’t have generational wealth.” This is often compounded by the systemic barriers faced in raising funds. In 2023, Black founders in the U.S. raised less than one-half per cent of all venture dollars allocated that year.
“People ask me, how did I save up to be a founder,” says Green. “I’m like ‘save what?’ My serial entrepreneurship journey began with lint in my pocket. The only savings I had was the memory bank of my mom’s hustle that inspired mine. With little education and a lot of determination, she worked and saved her hard earned dollars to put us through school.” He attributes his entrepreneurial drive to his mother who started and ran a small maid service business in Toronto.
A compelling story for your startup is key to raising
When it came time to raise for his company, Green had no warm introductions to venture capitalists nor access to valuable networks. “It’s a very gated environment,” he says, advising Black tech founders to leverage every room they can get into and share a vision for their business that compels people to invest in it.
When BKR assesses whether to invest in a startup, Lise says it’s the people leading the business that make the difference.
“We invest in founders who are fearless, know what they want to build, and have the hunger and the hustle to figure out how to get where they want to get.”
“We invest in founders who are fearless, know what they want to build, and have the hunger and the hustle to figure out how to get where they want to get.” She was impressed with how well ARTERNAL understood the art space. From working next to entry level employees to co-building with its first customers, Green went above and beyond to understand his clients’ needs. “That’s how we, at BKR, were sold.”
“It’s difficult to raise no matter what your skin colour is,” says Green. “You need to create that story arc and narrative, like a blockbuster summer film to draw people in.” However, he concedes there are challenges unique to Black founders. “I want to figure out how to decrease the friction for other Black founders…accelerate their journey more than mine.”
Bringing diversity to networks
Through Tribe Network, Burgesson is determined to help set BIPOC founders up for success. Key to the mission is getting them access to a community, coaches and capital. “We need to find more ‘Seans’ to mentor and coach them,” he says. “Someone who has done this already…We’re not giving founders time with a case manager, we’re giving them access to people who can help them.”
As more rooms are created by BIPOC communities, themselves, the amount of diversity in the ecosystem is increasing, along with the ability to stay authentic to one’s roots.
“If people can’t look past me wearing braids, I don’t want to work with them. We can’t hide ourselves.”
“I always wear something that showcases African heritage, such as earrings or pieces of clothing,” says Birikundavyi. This past year, Burgesson embraced his culture fully by deciding to get braids, despite his father’s protestations to ‘fit in.’ “I said ‘if people can’t look past me wearing braids, I don’t want to work with them.’ We can’t hide ourselves.”
Ecosystem building is equally important to Birikundavyi. As the first Black led fund in Canada, BKR understands its responsibility. “Most of our portfolio companies are raising smaller amounts than their peers in the broader ecosystem but are doing miracles with the money they have,” she says. “We want to change that and support more talented entrepreneurs with enough capital to build stable and successful businesses.”
Building a diverse ecosystem is a collaborative endeavour
With the emergence of more funds and communities that support Black owned startups, such as Black Opportunity Fund (in which Burgesson is a board member), the Black Innovation Programs (BIP), the Black Entrepreneur Alliance (BEA), and Black Founders Network (BFN), opportunities for Black entrepreneurs are slowly, but surely, expanding.
“We need to ensure we have funding at all levels, not just non-dilutive,” says Burgesson. It’s exciting to see more funds support Black startups. At Tribe, we are launching a fund to support early stage racialized founders, and Black Opportunity is also setting up a fund to support Black communities.” He insists financial institutions can also play an important role by better understanding the plight of Black founders.
“Getting more of your staff that are racialized, Black, or newcomers into community workshops will instil a lot of trust among our community in your institution,” says Burgesson. He adds, the importance of building a Black founder-friendly ecosystem with partners to combine their resources is key, and encourages these partners to invest in those organizations and funds closest to the community.
“When empowered, people in the (BIPOC) communities have the resources and connections to execute programs really well,” says Burgesson.
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