Black female entrepreneurs have particular difficulty accessing funding, although many are highly educated and their ventures are growing, a national survey has found.

The FoundHERs survey, conducted by market research firm Pitch Better Canada, analyzed the investment and financing options for Black female founders. The research found that 59 percent of Black women entrepreneurs hold a bachelor's degree or higher; 45 percent identified their business as in a growth phase and 62 percent were actively seeking investment, but most have not secured funding or have secured less than $50,000 in external funding. 

The survey of entrepreneurs, businesses, social enterprises, non-profits and charities interviewed more than 1,500 Black women.

Organizers said the ventures of Black women founders face significantly more barriers to success.

“In addition to being marginalized on the basis of race and gender, many FoundHers respondents were also immigrants, newcomers, refugees and/or identified as 2SLGBTQI+,” they said in a statement.

“Black women continue to report wages significantly lower than Black men and white women...according to Drover (2004), Black women are said to make 79 percent of what Black men earn and 57 percent of what all Canadian men earn…”

Organizers said that although Black women have the human capital, in terms of education, work experience, skills and training needed to start good businesses, the observed gaps are more closely tied to social capital and such things as personal development, mentorship, and finding capital.

The barriers to finding capital are particularly significant since many founders said their venture is in a growth phase.

The researchers have also created a FoundHers dashboard that locates the businesses founded by Black women in the hopes of linking them with investors, mentors and others.

Research by Entrevestor has revealed that female founders of all races are under-represented and underfunded in the Atlantic region.

Entrevestor’s 2020 Startup Data Report showed that just 14 percent of Atlantic Canadian startups are female-led, and they raised just 3 percent of equity funding. And that figure is overly optimistic because it omits stock market funding, which accounted for more than a quarter of the $206.2 million raised by startups and went exclusively to men.

Rhiannon Davies, a co-founder and managing partner at the female-focused venture capital fund Sandpiper Ventures, said research from venture capital funds and consulting groups shows that companies with women in senior roles significantly outperform their male-dominated counterparts.

“I think it's really important to recognize this as an opportunity and not as a social construct issue,” she told Entrevestor in an earlier interview. “Because if we all start to change our mindset and realize that... money and growth can be found while also doing good, I think it's only then that we'll actually start to crack this nut and start to make a change.”

In their concluding comments, the organizers of the new survey said that, among other measures, they recommend that the Government of Canada support and fund the creation of a Black Women’s Ecosystem Knowledge Institute led by and for Black women. The group’s future research will drill down into the data to provide deeper cross-sectional insights by business, they said.

The report was supported by the Canadian Women's Foundation, the Business Development Bank of Canada, and the Investment Readiness Program. Mentoring was supplied by Sandpiper Ventures.