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Financial Innovation for the Forgotten Demographics

At the eighth Annual State of Entrepreneurship Address, the Kauffman Foundation launched the "Zero Barriers to Startup" initiative and urged entrepreneurs and policymakers to help break down barriers to new business creation. While the US is becoming more racially diverse, the makeup of entrepreneurs does not reflect the changing demographics.

A similar theme was echoed by this year's South by Southwest Festival, an annual event in Austin, Texas that brought people from around the globe to meet, learn, and share ideas. Almost every entrepreneur I have met has a personal story with a conviction propelled by the needs of a family member or close friend. Those inspirations are what make the startup world so exciting to watch and to be a part of.

One of my key takeaways was the topic of diversity in tech, and how we must make a conscious effort to seek out people from more diverse backgrounds in the innovation lifecycle, from founders to funders and board members. Here are some of the startling figures cited by Jean Case and Steve Case of the Case Foundation:

  1. Only 10% of venture-backed companies had a female founder, 1% had an African American founder.
  2. An overwhelming 78% of all venture capital investment went to companies in Silicon Valley, New York, and Massachusetts.
  3. 93% of the investing partners at the top 100 venture firms were men.

According to a recent McKinsey study, companies in the top quartile for racial and ethnic diversity are 35% m ...

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