Women and people of color have no part in Silicon Valley’s favorite myth

Ofo Ezeugwu, co-founder and CEO of apartment discovery service Whose Your Landlord, vividly remembers his first experience seeking investment funds. In 2016, a group of investors had approached him and his team and put them through a multi-step vetting process, which required multiple interviews. The night before the final meeting, Ezeugwu received a phone call from one of the investors saying not to bother coming in — they wouldn’t be funding his project.

“It didn’t make sense,” said Ezeugwu, who says he was 24 at the time. “Usually if you had gotten to this point, you were basically set.”

Ezeugwu stayed on the phone to vouch for Whose Your Landlord and eventually swayed the investor to go through with the final meeting. The next morning he showed up with two of his team members: his co-founder, a fellow black man, and their white sales director who has since left the company. Ezeugwu kept details of the late-night call to himself, so his colleagues could go in unbiased.

The young CEO noted that the meeting felt off, and not just because the investors didn’t start on time. “When the [white] sales director would ask a question, there was a calmer response, and a more willing ear to listen,” Ezeugwu recalls. This wasn’t the case when he spoke. “Whenever I talked, I could see the director’s face turn red and he would roll his neck,” he said. “There was a physiological change in his being.”

The final part of the meeting consisted of a 10-minute portion where Whose Your Landlord would talk specific strategy. Ezeugwu noted the investors’ reluctance to continue.

The investors reacted to the final part of the meeting with doubt: “Is this even going to change anyone’s opinion?”

Ezeugwu was defiant in the face of this question. “You started our meeting late. The least you can do is give us five minutes.”

After the interview, Whose Your Landlord’s sales director was puzzled by the two-facedness. “Was it just me or was something off about that meeting?” he asked.

Ezeugwu sees the disconnection clearly. “We’re young and we’re black, so we get underestimated,” he told Mic. “Folks on that investor board said this person had a history of doing this, but went unchecked.”

Months later, Whose Your Landlord received a tip that the same investor group saw a change in leadership — their doubter had stepped down. Ezeugwu’s startup soon after received $50,000 from the group.

There’s a dichotomy in tech

The tech industry has created a modern-day gold rush. Phones and apps drive a $88 billion industry, not to mention the businesses that spawn from them, such as app-powered lodging and ride hailing. But in many ways this money is closed off to underrepresented groups. The opposite is true for those who are both white and male — they can even drop out of college, or skip it altogether, to embark on their Silicon Valley fairy tale. We see this in some of tech’s most famous founders and CEOs (such as Bill Gates, Steve Jobs, Mark Zuckerberg, Jack Dorsey and Evan Spiegel) and even the non-celebrities (such as Travis Kalanick, David Karp, Biz Stone, Ev Williams, Michael Dell, Sean Parker, Daniel Ek). It illustrates a curious dichotomy in tech: A white man can skip school and make millions, women and people of color can’t. This isn’t always the case, but it’s clear that the rest of the world doesn’t have the same welcome mat into tech that white men do.

For women and people of color, higher education is mandatory. In the CEO set, Microsoft’s CEO Satya Nadella, who is Indian-American, has his master’s degree in computer science. Google’s CEO, Sundar Pichai, also an Indian-American, has two master’s degrees, in engineering and business administration. YouTube CEO Susan Wojcicki, a white woman, also has two master’s degrees in economics. This pattern extends to smaller tech businesses such as TaskRabbit, whose CEO, Stacy Brown Philpot, a black woman, received her master’s degree from Stanford.

Tech company founders follow a similar trend. Whitney Wolfe-Herd of the dating app Bumble and Christina d’Avignon of wearable tech company Ringly are both white women who graduated from college before launching their respective companies. Tristan Walker, the black founder of Walker and Company, who also co-founded Code2040, received his bachelor’s degree from Stony Brook University and master’s from Stanford. Think of the numerous women of color founders in tech: If any come to mind, what are their backstories?

Investors are more eager to give money to white men.

The ability to initially impress potential investors, of course, plays a huge role in the success of a startup. And for women and people of color, an advanced degree is likely to give investors, who are generally white men, fewer reasons to be skeptical.

“I could never walk into an investment meeting like, ‘Yo, I just dropped out,’” Ezeugwu noted in a video call with Mic. The Temple University grad co-founded the startup Whose Your Landlord in 2013. (The “whose” in their name is on purpose: “We use the possessive form of the word because we’re giving renters ownership of their living situation,” Ezeugwu said.)

“If I walked right in there after having dropped out, they’d ask, ‘What are your credentials? Who do you know? What’s your last name?’”

Raising money is hard for any young company founder. And it becomes even harder for non-white-male founders when many investors are specifically matching you against previous tech successes.

“People try to pattern match,” said Patreon’s senior engineering manager Erica Baker in a phone interview. Baker took classes at the University of Alaska and took part in a system administrator internship there. The internship offered her a $40,000-per-year system administrator job, so she dropped out of the school to take the full-time gig. She’s since worked at Kickstarter, Slack and Google, where she famously polled colleagues about their salaries and revealed wage disparity problems within the company.

Ezeugwu mentioned how not lining up with these exact attributes could lead to less funding, and hold a company back. “You’re measured as a CEO by your ability to encourage people and get them excited about your vision,” he said. “You can do that part. But what they don’t tell you is the real-life part of how do you convince that person to work with you for two to three years and get paid half as much as they would somewhere else. People have real-life bills and responsibilities.”

Since Whose Your Landlord was founded in April 2015, the service has raised $300,000 in funding. Compare this to a startup like the infamous Juicero — a startup that brought users a $700, Wi-Fi-connected juicer that turned out to do nothing. The company was founded by Doug Evans in 2013 and, in four years, raised $118 million in capital from numerous funders.

The struggle to raise money affects many types of underrepresented groups. Dawoon Kang, the Asian-American co-founder of dating and social networking application Coffee Meets Bagel, told Mic in a video call why this may happen. “When you don’t have metrics and numbers to evaluate a company, a lot of times you go by your gut feeling,” she said. “That’s just a breeding ground for biases.”

For many female tech entrepreneurs, it can seem like a no-win situation. “The questions that female entrepreneurs get asked and male entrepreneurs get asked are so different,” Kang says. She cited a Harvard Business Review study that explains why women business owners lead 38% of companies, yet receive 2% of the funding.

“The fundraising environment is very much dominated by men,” Kang said, noting how this can hold back an app like Coffee Meets Bagel. “A lot of men don’t understand what it’s like to online date as a woman,” Kang said. “It’s challenging to get that point across.”

The privilege of generational wealth and safety nets

While venture investment is a major source of funding, another is bootstrapping — putting your own funds or family money toward a business. Here the odds are also stacked against nonwhites.

The wealth gap between white families and those of color is wide, with white families, on average, having nearly 10 times the wealth a black family has. Data from the Federal Reserve, presented in the Washington Post, shows that white families had a median net worth of $171,000 in 2016. For black families, that number was $17,600, and for Latino families, $20,700. It would take Latino families 84 years and black families over 200 years to catch up to the wealth white families currently hold, according to the progressive think tank Institute for Policy Studies.

“White people have safety nets,” said Baker. “They know that they’re going to get funded, and if it doesn’t work out, they can rely on their parents to help out.” Generational wealth can provide a bungee cord for white founders, letting them take a leap and bounce back if it doesn’t work out. For black founders, the leap is closer to a free fall.

“As an entrepreneur of color, it’s like a race that we start 30 seconds after — but the entire race lasts one minute,” said Jacques Bastien, founder of the marketing agency Boogie and more recently the management agency Shade, in a video interview. “The way you make it is to duplicate yourself in some way, shape or form. Working 24 hours with no sleep, for example,” he added.

Bastien also noted how the generational head start many white families inherit involves more than just commas in one’s bank account. “The connections I’ve made, those will be my kids’ connections and their kids’ connections. But really, we haven’t had as much time to build those networks.”

For people of color in tech, the lack of family money to fall back on has an additional downside.

“Some people have a safety net,” points out Baker, “For my family, I am the safety net. In the black community when you’re successful, you’re the one that holds the whole family up.”

Bastien, who was raised in the projects of Brooklyn by a family without disposable income, echoes this sentiment. “There was never enough money to ‘save,’ so even that concept was new to me,” said Bastien. After making money, Bastien notes that if a family member needed help, that was that. “Certain times, it was a percentage of the little that I had, other times it was all of it.”

This can negatively affect a burgeoning company’s bottom line. According to Bastien, “We’re working backwards. The little money that we’re making from our startups is going back home. So we can’t save money or invest it or really try to build. That little extra $200 you have has to go back to mom and dad.”

Aside from raising money, Kang noted another obstacle for those not in the majority. “Part of the reason I didn’t start something earlier is because I didn’t think I could. As a minority you do grow up with a set of stories about yourself. I’ve had to work a lot to shatter that story.”

To Baker, the obstacles she’s encountered are baffling. As a college dropout who’s proven proficiency in tech, she admits she’s essentially the prototype for a tech founder — that is, if she weren’t both a woman and black.

“If I were a white dude I’d probably be running a company at this point,” said Baker. “But I’m not.”

And it isn’t just Baker. Ezeugwu knows Juicero-like funding could have been his if circumstances were different. Even though he started the one-minute race 30 seconds in, he’s ultimately in no rush.

“If you want to build something sustainable that ends up impacting humanity, it’s going to take time. And we’re here for it,” he said. “So we’ll keep on working.”

Correction: Dec. 11, 2017