INSTITUTE FOR ENTREPRENEURIAL LEADERSHIP SHARES THE TOP FIVE STRATEGIES FOR MORE EFFECTIVE COMMUNICATION BETWEEN BLACK FOUNDERS & INVESTORS
Investors Can Make A Stronger Impact With Honest, Direct Feedback
By Lori Anne Oliwa
According to the latest census data, there are over 3.12 million Black-owned business enterprises in the U.S. Black women are the fastest growing demographic of entrepreneurs. Despite their growing participation in the entrepreneurial ecosystem, access to capital has remained a significant barrier for Black founders. In 2021, startups raised a record $330 billion, but only 1.3% went to Black founders.
The Institute for Entrepreneurial Leadership (IFEL) is a non-profit organization which supports economic development through entrepreneurship and seeks to eradicate systemic barriers that prevent people of color from being able to access the knowledge, networks, and capital required for entrepreneurial success and wealth creation. IFEL takes a unique approach to the issue of capital constraint through its innovative program, The Making of Black Angels, a movement designed to create a more inclusive investor ecosystem and to increase the amount of Black angel investors through financial education. While the organization provides several signature programs, a key focus area includes preparing Black founders to be ‘capital ready’ as they move into the early stages of the financing life cycle for their businesses.
In working with both investors and entrepreneurs, IFEL reiterates the importance of sharing valuable feedback for entrepreneurs’ pitches enabling them to achieve successful results. The pitch is an essential step in the founder’s capital access journey.
IFEL’s Making of Black Angels community recommends the following suggestions when sharing feedback for a founder’s pitch presentation:
1) Focus on facts and cite specific examples of ways the founder can improve.
2) Be courteous and objective, but be willing to engage in difficult conversations. Honesty is after all, a gift.
3) Rejection of the pitch can be a motivator. Provide a critique of the presentation, the method of delivery, the overall effectiveness of the content, and the key selling points of the opportunity. Did the founder emphasize important points and substantially differentiate his or her products or services?
4) Truly supporting founders may include the following: - Offering a listing of resources which can help
- Opening doors through personal connections
- Providing an additional review of the pitch after revision
5) If there is strong consensus that the business is not feasible, do communicate that and exactly why. Framing the opinion or advice through a lens of experience and why there is no interest can be helpful. Reference other companies in the industry and examples of failure or success.
Volunteers can heed the call to action and assist Black-owned businesses through IFEL’S Small Businesses Need Us & Women of Color Connecting initiatives. For more information, visit www.weareifel.org.
ABOUT THE INSTITUTE FOR ENTREPRENEURIAL LEADERSHIP
The Institute for Entrepreneurial Leadership (IFEL) is an independent, not–for–profit organization that leverages the power of relationship capital to create pathways to success for Black and Latinx entrepreneurs and small business owners. Founded in 2002, IFEL’s mission is to eradicate the systemic barriers that prevent people from historically excluded populations from being able to access the knowledge, networks, and capital required for entrepreneurial success and wealth creation. Learn more at www.weareifel.org.