Venture funding for Black-founded startups hit a historic low last year, with only $942 million allocated to these firms. This represents a mere 0.32% of total U.S. venture capital, a drop of more than two-thirds over three years. This funding gap forces many entrepreneurs to seek alternative paths to secure growth capital.

Clarence Bethea, who raised $30 million for his startup Upsie before its acquisition by Akko, now uses his experience to demystify the industry. He launched What VCs Won’t Say, an educational platform that teaches early-stage founders the actual mechanics of fundraising. Bethea argues that the current system ignores those without specific pedigrees.

Cortney Woodruff, CEO of Assemble, notes that investors rely heavily on pattern recognition, which often penalizes minority founders. He observed that these entrepreneurs must provide significantly more evidence of success to gain the same conviction as others. This disparity creates a higher barrier for those who do not fit traditional investor profiles.

These founders are transitioning into investing roles to challenge institutional bias from the inside. By becoming angel investors or venture partners, they aim to broaden the narrow signals used to judge success. This shift transforms their lived experience into a tool for leveling the playing field for underrepresented builders.