June 5, 2020

Big business puts its money where its mouth is

Customers want more than blacked-out avatars — and some companies are stepping up.

Black entrepreneurs this week delivered a message to companies wanting to address racial inequalities: Hire and wire.

Statements of support are great, they argued, but what really counts is money. Hire black employees, or wire investments their way.

The numbers are stark: Only 1% of VC-backed startups are headed by black founders, and only 3% of VC investors are black.

Some major investors have gotten the memo:

  • SoftBank quickly put together a $100m Opportunity Fund that will invest only in companies helmed by people of color.
  • The VC firm Andreessen Horowitz is ponying up $2.2m for founders from underrepresented and underserved backgrounds.
  • Bank of America is committing $1B over the next 4 years to addressing racial and economic inequalities.
  • Goldman Sachs’ fund to back companies fighting for social justice is starting at $10m.

Customers are saying, ‘Show us the money’

While Ben & Jerry’s was widely praised for its strong statement, a lot of other brands ended up sounding the same.

Customers want more than statements. They’re flooding brand social media accounts with demands to hire black workers and support racial justice groups.

It looks like it’s starting to work: Niantic, Uber, DoorDash, and dozens of other tech companies are all pledging money toward fighting racism.

Even fast food companies are opening their purses. Twitter users made #WendysIsOverParty trend this week because of apparent confusion over a prominent Wendy’s franchisee’s political donations.

Wendy’s clarified that the company doesn’t donate to presidential campaigns. However, it pledged $500k to the Thurgood Marshall College Fund and other social justice orgs.

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