As the tech world expands across all aspects of life, there’s been an increase in young Black founders of tech startups, according to valuation software company Carta.
In their recently released 2022 annual equity report, the company reported that more Black tech workers are moving to start their own companies rather than work for executives. This was particularly found amongst the younger tech workers. According to the report, only 7.3% of employees from the ages of 21 to 30 are Black. When it came to founders, there was a greater number of Black founders in this age range, representing 9.3% of every founder in this age range.
There was a similar trend amongst Latine tech workers. Whereas 10% accounted as employees, 10.4% identified as founders in the 21 to 30-year-old age group.
With these new numbers, Carta believes that it may be symbolic of change in the technology world.
“People of color, and particularly Black and Latin people, are more represented among founders than they are among executives, possibly suggesting that people of color are seeking a seat at the table by building their own tables,” said the software company in an analysis of their report.
Despite this increase in Black founders creating their own startup companies, there’s still inequity in the technology sector that needs to be addressed.
According to the report, about 48%- nearly half- of all founders who created their own tech business in 2021 and 2022 are still white men. While there was an increase in women founders, there was mostly an increase in tech-related to health and education; there was less of a presence of women in video gaming and the percentage still remains under 25% in 2022.
Part of this lack of diversity in the tech world is due to the lack of funding for founders of businesses who aren’t white men.
According to the latest report released by Crunchbase earlier this year, Black founders in the U.S. received only one percent of venture capital funds in 2022. Out of the nearly $216 billion handed out by venture capital firms, Black companies received just $2.254 billion. This new number is a drop from that of 2021. Whereas Black-founded U.S. companies received 1.3% of funds in 2021, they now receive about 0.3% less.
Overall, according to Crunchbase, Black founders get less than two percent of venture capital funds each year. Black women typically receive less than that, earning less than one percent of funds.