Courtne Smith, CEO and Co-Founder of NewNew
When a trend starts the numbers are small. Perhaps even infinitesimally, like the number of black women who receive venture capital. According to ProjectDiane 2020, black and Latin American women received only 0.64% of VC investments since 2018. According to the American Express 2019 State of Women-Owned Businesses, black women make up 42% of new women-owned businesses. * The percentage is three times their share in the female population (14%).
But keen observers like those who have invested in NewNew – the firm Courtne Smith co-founded – recognize that black women are sparking a wave of innovative startups with the potential to become unicorns. Tech Unicorns are privately held startup companies valued at over $ 1 billion. NewNew investors include Andreessen Horowitz, Will Smiths Dreamers VC, Canaan, Founders Fund, and Shrug Capital, as well as Engel, who have been top executives on Facebook, Google, Netflix, and Twitter.
Smith raised venture capital to turn Suprize into a social discovery platform based on ranking, sharing, and connecting things that users think are cool. Suprize used gamification techniques to give away products. NewNew focuses on using polls and polls to make decisions.
NewNew is a social decision-making platform where users can join groups, share content, chat, poll, and vote up or down. Unlike its competition, NewNew doesn’t focus on creating content, but rather on those who share content and how it’s shared. During the beta phase, UCLA and Stanford students used the app to find out what was happening on campus, what cool events were happening, what courses were interesting, and who were the best professors.
Like Steve Jobs, Smith dropped out of college and is a non-technical co-founder and CEO of the company. “I come from the school of hard knocks,” she exclaimed. Prior to NewNew, Smith worked for rapper Drake for more than 10 years. She started out as an assistant and eventually made her way onto his management team. She later co-founded Diarra Tharen, a hair extension brand with her friend Filip, and then Suprize. “Life is my teacher!” She said. Being a serial entrepreneur taught her a lot.
While Smith and Diarra are Canadians, the US seemed like a better place to have their tech company headquartered. Since her time at Drake, she had an extensive network in Los Angeles. Smith felt that the entrepreneurial ecosystem for Surprize and NewNew in Los Angeles was more resilient compared to San Francisco. LA also has a younger vibe with a hub for creatives and influencers. What she didn’t know is that female CEOs in Los Angeles have a better chance of raising venture capital (17.1%) than in New York (15.3%), Silicon Valley (12.1%), and Boston (Jan. , 7%) All In: Women in the VC ecosystem of Pitchbook and All Raise.
This may sound counterintuitive given their network, but “I made a conscious decision not to even go to anyone on my network to invest in us,” said Smith. “I felt that if the vision for the company and the product were good, people would want to invest in our business.” She didn’t want it to be about investments she knew about. “We have increased [our round] through cold email to hundreds of investors. “Not the way most experts would recommend.
Smith and Diarra met 50 times a week. They didn’t sleep much then. “We heard a lot of ‘no’,” she said. You didn’t focus on the naysayers. They focused on people they had a connection with who seemed ready to give them a chance. “Little did I know at the time that it was so difficult to raise capital as a black woman,” said Smith. “Raising venture capital as a black woman is like climbing Mount Everest backwards, blindfolded and with ankle weights.”
The importance of female investors should not be underestimated: According to All In, female VCs invest in female founders twice as often. “Almost 85% of our funding comes from female investors,” said Smith.
In the current environment, there could be a slight increase in investments in black female founders. She fears that this could happen. The coronavirus pandemic and Black Lives Matters focused people on racial inequalities related to health, economy and social justice. VC’s interest in funding multicultural founders is growing: 43% say this is a top priority – a 10% jump from 2019, according to VC and Racial Equality: How Attitudes and Actions Develop and What the Industry Continues to Hold Back from Morgan Stanley.
“BLM has a moment like this, but then people will just forget about it and move on and things will go back to how they were,” she sighed. For example, while the media focused on the #MeToo movement, progress was being made with female founders raising venture capital. Now that media interest has waned, the numbers are pulling back. According to Q3 2020 Pitchbook-NVCA Venture Monitor, investments in startups with women in the founding teams decreased from 17.8% in 2017 to 13.0% in the first to third quarters of 2020. “VCs fall back on what is convenient for them and their best known referral networks,” said Trish Costello, Founder and CEO of Portfolia, in a previous Forbes article.
Pete Seeger mocked the suburban housing and sang in the 1960s.
“Small boxes on the slope
Small boxes made from Ticky Tacky
Small boxes on the slope
Small boxes anyway “
Will VCs continue their conformist funding method? Or are they breaking their pattern matching techniques and looking beyond their traditional networks to make sure people who don’t look like them get a fair chance of getting funding?
How do you make sure women, especially colored ones, get the same shot as white men?