A non-profit in Silicon Valley is helping minority start-up founders succeed

As we shine a spotlight on the lack of diversity in Silicon Valley, it’s worth highlighting some of the people who have been working to bring more diversity to the tech scene for years.

One prime example is James Norman, now CEO of Pilotly, a focus group company. He also co-founded and runs an organization called the Transparent Collective, a non-profit that aims to help early-stage minority founders.

The organization hosts groups of entrepreneurs from around the country for a four-day program of coaching and panels to help them hone their strategy, improve their pitch, have one-on-one meetings with potential investors and ultimately present to a group of potential backers at a demo day. Over the last four years, Norman said that 40 companies from this program have raised over $35 million in early-stage funding,

“We’re pulling people from around the country that had some great ideas and passion for what they were doing,” said Norman. “The main thing I want to do is get these people out here and have them interface with the right people to expand their network and their horizon for their vision … getting people in position to actually raise the capital they need.”

Norman said he and his fellow co-founders, including Clayton Bryan and Rohini Pandhi, bring perspectives that are different than many other programs trying to help bring in new voices to Silicon Valley.

“The people who run those programs haven’t been on the journey of a Black founder, or haven’t been on a journey of a woman founder…. There are nuances to each one of those situations that we can specifically speak to, that allows us to be more effective in what we do,” Norman said.

Norman was inspired to create Transparent Collective because of his own experience coming to Silicon Valley as part of an accelerator program called NewME, which he joined after leaving Detroit, where he had been working on his digital video start-up Ubi, and trying, unsuccessfully, to raise funding.

“Almost instantly, you’re immersed into an environment that’s unlike any other,” Norman said. “I had been around Michigan and Chicago and other places, thinking about what does it mean to raise money, trying to reach out to a few VCs in the Bay Area, but not really understanding the game.”

Norman said within days of being at this program in Silicon Valley he realized there was more investment capital to be put into start-ups than in all of Michigan.

Within days of arriving in Silicon Valley, Norman knew he couldn’t go back to Detroit.

“I already felt like I’m getting more information. I’m getting closer to what I need,” Norman said.

And the experience of staying in a house with other people of color while learning about the start-up world created a community and network that Norman is still close with today. But then it was Norman’s own challenges raising money that inspired him to help other entrepreneurs.

“When I was five years into living here, and I had a very wide network of some of the most successful and powerful people in Silicon Valley, I still didn’t have access to the money that I needed,” Norman says. His current company, which provides digital focus group services to Netflix, Amazon, NBC Universal and other media companies, has raised less than $1M and is profitable, in part because of access to additional funds.

Norman said he realized NewMe “didn’t get everybody the resources they needed to run a successful company.” So he teamed up with Bryan, who was a program director at NewME, and put transparency at the program’s core. “We’re going to very quickly tell you, ‘now that’s wrong you have to change this as soon as possible because we only have a short period of time with you.'”

At Transparent Collective’s pitch day and in his conversations in Silicon Valley, Norman said he’s focused on showing investors the financial opportunity of investing in Black founders. Based on the data collated for The Black Founder List, which includes nearly 250 people who work at 209 companies, 15% of Black-founded, VC-backed start-ups find an exit with a greater than two times return. He also reported that 72% of Black-founded companies receive less funding than they intended to raise, slowing their ability to create rapid growth.

And Norman isn’t just working to help rising entrepreneurs, but also to help the investor community. Norman wrote this Medium post, “The Definitive guide to investing in black founders,” which includes challenges white investors need to overcome around communication and culture, as well as the threat of unconscious bias.

He also lays out the argument for investing in Black founders — including the need for economic inclusion and the opportunity for higher returns — and a guide for sourcing Black-led startups. Now Norman has been flooded with applications for his next cohort at Transparent Collective. While the program usually only takes about 10 entrepreneurs at a time, he’s hoping that holding the program virtually (because of the Covid-19 pandemic) will enable his organization to reach more people.

Source: CNBC