According to a report by Digital Undivided’s Project Diane, firms started by black women received only .0006% of VC funding raised by startups between 2009 and 2017. While this number is offensively low, the reality is that VC funding is often later stage funding for a business. Black women have far less access to friends and family funds, personal wealth or angel investments that often precede VC investment stages.

The gap in wealth described above, alongside discriminatory practices in lending, and overall distrust in the lending industry perpetuate deep racial disparities in funding. These factors often mean that Black women-owned businesses bootstrap and go without critical services and support such as hiring bookkeepers, business coaches, or contractors. Negative differences between funding and business outcomes for Black- and White-owned businesses persist and even worsen over time. Overall, Black women-owned businesses tend to have lower sales, fewer employees, smaller payrolls, lower profits, and higher closure rates.

While capital is critical, it must accompany solid leadership and capacity in order for the business to succeed. The Sistahbiz loan fund is one prong in a three-pronged approach to serving entrepreneurs.