What to get your favorite Founder of Color this Holiday Season? New Customers.
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In the spirit of the holiday season I discuss the Social Capital gap challenge faced by Founders of Color looking to grow revenue through new customers, and share 5 steps you can take extend your own social capital to your favorite founder to connect them to new business.
I recently began collaborating with a B2B automotive tech startup to supercharge their business development, acting as a support to their CEO to help them sell to new customers. I connected with this black-led startup through a venture capital firm I invest in which primarily supports black founders. I love working with this startup because they have a standout team, with agile and visionary leaders who pivoted successfully to a product that resonates deeply with their B2B users. They're customer-centric, primed for scale, and venture-backed. They’re firing on all cylinders when it comes to their growth.
Well almost all cylinders. Their VC has called on me because they need more customers to fuel their growth. Why bring in the help? It’s because this holiday season, the one thing founders of color need even more than Venture Capital is Social Capital.
No shock: most startups fail because the money simply dries up. Funding for startups is generated through venture capital, private equity or loans, and then ultimately and most sustainably through its paying customers. In our current fiscal climate Venture funding is drying up quick, and VCs are beginning to demand faster revenue accountability from startups in their portfolio. Founders and their teams are compelled to devote more resources to achieving customer growth.
For founders of color, who on average are less well-funded, customer growth is an even more urgent need. Earlier in my career in this space the Venture Capital world was rocked by the data popularized on Soledad O’Brien’s 2011 special Black in America that Black founders received less than 1 % of US venture capital. Unfortunately not much progress has been made – TechCrunch reported in 2023 that that number stood at just 1%, with only 1.9% of venture funds going to women-founded teams, and a shocking .1% (I’m compelled to spell out that that’s one tenth of one hundredth of a share!) of funds going to Black and Latino women founders. I will state plainly that this must change – Venture Capital must grow to be more equitably distributed in order to back the most talented founders. But to offer a reality check: if it has taken 12 years to move just decimal points of a percentage point of funding, then founders of color can’t afford to wait for a sea change here – they must look to revenue growth for sustained growth, perhaps sooner than the average white male-founded, VC-backed startup. This means that black founders, latino founders, asian founders, women founders, many others and those at the intersections, are compelled to hit the pavement and sell.
This brings me back to Social Capital. Beyond the hard tools used to find and sell to those customers – industry intelligence, analytics, good marketing and lead generation – the soft tools of Social Capital can be even more critical when selling a corporate customer on a large B2B contract. Social capital accounts for the trust and credibility extended to people through the strength of their network of relationships. Social Capital yields access to decision-makers and reduced resistance to objections and barriers, and to the fear of the unknown of doing business with a new partner.
For founders of color Social Capital can be scarce as that 1% / .1% of venture capital. Where they have been less likely to be privileged travelers of the corridors of top corporations and universities, the pipelines of corporate procurement, and the informal spaces of connection through shared interests, founders of color can find themselves locked out of the critical connections needed to land their next big customer.
And then there’s bias (or as we just like to call it in this blog Racism, Sexism, Ageism, etc). Likeness biases can plague founders of color who might connect based on actual business and industry knowledge, skills and talent, or even shared schools, professional and personal networks – but are seen as different along lines of race, ethnicity, gender and other differences.
Oh by the way, these founders are incredibly busy, maybe flying solo or with an incredibly small team, and they are building product, the operations of service delivery, and servicing their current customers. They are still the Chief Sales, Marketing and Revenue Officers, among other fundamental hats. Like any startup they’re straight stretched thin – and being less well capitalized their team is growing slower.
It’s these biases and a lack of real and Social Capital that put founders of color at a systemic disadvantage when it comes to growing their customer revenue.
So, what can you do, this holiday season and into the New Year, to disrupt this pattern? Well, the gift that will keep giving to your favorite founder of color in your network is to introduce them to their next big customer. You can do this because 1. You have a deep network, 2. You know a founder at this stage, 3. It’s the holiday season and you’re feeling extra generous. I’m going to let you in on the 5 simple steps I take to support startups’ business development acceleration in hopes that you’ll open your Rolo– um, LinkedIn networks and play Santa’s helper this holiday season:
5 steps to introduce a founder of color to their next big customer:
Confirm Startup Readiness: Ensure the startup is prepared for customer expansion by understanding their product / service, the problem they’re solving, and verify that it’s working for their existing customers;
Identify Relevant Relationships: Get the startup to identify their top customers targets and tap into your network to identify potential people targets. This is your valuable network: stay focused only on the 1 or 2 companies you think would most benefit from a relationship and to whom you are comfortable extending your own social capital;
Warm Up Top Targets: Approach your top customer prospects, gauge their likelihood of engaging and their top objections. Identify and likely relationship bridges – what do they have in common with the founder? And critically, identify any likely biases – will it be safe and productive to introduce this founder? At this stage you can uncover and pre-empt potential biases, and make them more ready to have a productive connection with the startup;
Warm Up The Startup: Prepare your startup to pitch effectively by helping them understand the customer's needs and objections. Strengthen their presentation by emphasizing their strengths and addressing any gaps in their offering;
Make the Connection: Facilitate an intimate and friendly meeting, acting as the bridge between your startup and potential customers and, ensuring both parties feel comfortable. In this way you transfer the strength of your social capital. Once the connection is established, gracefully step back as the sparks fly between the startup and their newfound customer relationships.
While doing this work, remember that the founder and their team have done all the hard work to build the business and make it customer-ready. Your connecting work is based on the strength of your relationships, and while it must be done intentionally, it need not be a significant effort for you. With a customer-ready business you can pursue this entire process in weeks or days. With your closest partners and allies and the right customer fit this process can happen in a day.
And know that when you take this step you are making a commitment to advancing equity. That’s a pretty great and generous gift to give this holiday season.
Happy Holidays,
– Chris Genteel
If you manage a fund and are looking to help your portfolio companies’ business development pipelines contact Glidelane to see how we can help., and;
If you have independent automotive dealers and fleet owners in your network please DM me – my favorite startup is looking for its next big customer!