It's challenging to be a Black business owner nowadays. In recent years, some Black entrepreneurs have built imposing firms with enormous valuations. However, there are still a startlingly small number of large venture capital-backed startups with Black leaders. Moreover, the recent turmoil in the venture capital (VC) industry has disproportionately negatively impacted their businesses, wiping out diversity gains in financing.

Following the Black Lives Matter movement, Black business owners raised unprecedented levels of venture capital. According data from Crunchbase, they made $866 million in the second quarter last year, nearly double the U.S. amount from the previous year. But Black-owned businesses only raised $324 million in the second quarter of this year, a 63 per cent decrease. In contrast, the overall VC industry's collapse was not as severe: According to PitchBook data, total VC funding in the U.S. decreased by 23 per cent during that time.

Fewer opportunities exist for entrepreneurs to break through in a sector with a history of diversity issues due to the sharp fall in funding for Black founders—they have only raised 1.2 per cent of venture capital dollars thus far this year. In addition, only a small percentage of the more than 1,000 unicorn firms with valuations of at least $1 billion have at least one Black founder or senior executive featured on their website, according to a study of businesses conducted by CB Insights, as reported by Bloomberg.

Source: Bloomberg