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Raise capital with the skin you’re in: blunt truth from Don Charlton, Founder, JazzHR

Don Charlton
How do you raise capital for your company when you’re not in the traditional social circles of the money people?  In particular, the VC industry is 76% white male and overwhelmingly straight; what if you do not fit into that bucket?

I’m speaking on a panel this afternoon on fundraising for minority founders at the Rainbow PUSH Wall Street Project.  Fundraising is always difficult for all founders; the median PE/VC fund sources and reviews 87 companies before investing in 1.  That said, minority founders have three unique challenges, which I’ve listed below in order of when a founder hits the hurdle.  I also was fortunate to gain a lot of insight on this topic from Don Charlton, Founder/CEO, JazzHR (formerly TheResumator)*, a ffVC portfolio company.


The job of a founder is to make “stone soup”: to recruit strangers to help cook your dream into reality.  That sales process is harder when strangers are biased against people like you.  According to Harvard psychology professor Dr. Mahzarin Banaji, 75% of people studied, including some African-Americans, have an implicit preference for white people over black people.  (Her analysis is based on Race Implicit Association Test (IAT) results which reveal unconscious biases.)

Don Charlton points out,

“We’re most sensitive about discussing bias when it involves African-Americans because of our history of slavery and racial segregation. If a 6’3” Asian college athlete says he’s going to be better than Lebron James, how many really believe him? There simply aren’t enough Jeremy Lins and Yao Mings around to penetrate our racial bias that Asian men can become the next ‘Lebron’. I think the same goes for startup entrepreneurialism. If a short, African-American girl with glasses and braids says she’s going to be the next Mark Zuckerberg, how inclined are you to believe her? This young, talented girl is given no chance of being the founder of the next Facebook.”

“I feel VCs have this same challenge as a NBA coach – you have be courageous to propose backing someone that is ‘anti-pattern’. I suspect many VCs, deep down inside, know they do not have really have the spine to do this – they’re lucky if they get one or two bets a year. Is that wrong? Technically yes. Does it hurt ‘anti-pattern’ entrepreneurs? Most definitely. Is it human? Again, it’s human to have bias.”

“If we would start admitting our bias comes from lack of familiarity, not always racism, we’d be able to have more honest discussions about how we look at people and their ideas. Your bias is a fog over opportunity. Admit you have biases, like we all do, then recognize you need to put steps in place to overcome that – like start an NBA development league in China.” 

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“Next, I would push ‘anti-pattern’ entrepreneurs to remove the convenient (and often true) excuses for not warranting investment. When investors lose the convenient reasons to be dismissive – any bias that’s really going on will (finally) have no place to hide.”

Don recommends:

  • Don’t just do startups “for us”.
    I know we romanticize the LGBT entrepreneur making an app for the LGBT community, but too many of our ideas are “ghettoized” and not seen as “big ideas”. You can make the next SnapChat – not just the next (blank) for African-Americans. And the “Uber of Greece” is in Greece – not exactly the next big market. Think bigger!
  • Have a BIG, likeable personality.
    No matter your color or sexual orientation, people like to back people that just are just plain likeable. You don’t have the luxury of fitting into the category of “quiet but brilliant”. You will NOT get credit for that. You have to show you have the most ambition in the room, and the smarts to outpace most people. To prevent yourself from disappearing in the room, you need to be one of the people that stands out.
  • Watch your dialect – I’m saying though!
    While people think a Southern drawl is smooth, and a Boston accent is “so Boston”, unfortunately you’re going to be judged harshly (and quietly) based on how you speak. Nobody wants to talk about this because you can get into hot water – I don’t care because there are smart people in Brooklyn who don’t realize that dialect is KILLING them in Silicon Valley. Look – when I am around my family, my dialect changes. “I be tired sometimes” REALLY comes out of my mouth – really. I know people who are very smart, but still sometimes say, “that’s mines”. There’s a dialect and lexicon in African American households that many people are unfamiliar with, so when these words creep out of your mouth during professional conversations and pitches, your intelligence is often being unfairly downgraded – it sadly is! You can wait for the world to add more words to the broader public lexicon, or you can work on sounding more like Obama, who I’m sure “cuts up” with his “homies” when he’s not addressing the nation. 
  • Feign familiarity if you must.
    Yes, you like hip-hop, “urban” clothing and “ratchet television”, but all that sinks you deeper into stereotypes.  You’re better off being more like the crowd [whom you’re targeting] and speaking from their experiences. Ask people questions about themselves and be genuinely interested, and probe to learn more. Then share personal experiences that are complementary to their stories. Remember – often the person you’re talking to doesn’t know what to say to YOU, either. When the night is over and you’ve made new friends, go home and watch Housewives of Atlanta – it’s your secret.
  • Shed the inferiority complex.
    Recognize that most people you meet have never actually started a company. You are already in an elite group. You won’t admit it, but you wonder if people are taking you seriously. The question is, are you taking yourself seriously? I used to be ashamed of growing up very poor, and now I wear it like a damn badge – I made it HERE from THERE – you try that! What are you bringing into a VC pitch or social gathering that’s setting you up to look meek, shy and nervous?
  • Avoid being labeled as startup from a “special group” program.
    Very controversial statement here! I always tried to avoid these programs or classifications. You do not want anyone to attach “African-American” or “gay” to the front of your company because instantly you’re marginalized. Taking funds from programs targeting anti-pattern entrepreneurs is both helpful and hurtful because you look like you’ve had a special crutch. And remember many people have a visceral reaction to anything that looks like, “affirmative action” (although I would strongly argue Stanford is its own “affirmative action” machine).  If you do get assistance or funds from these types of programs, take what they give quietly. Let them promote the fact that they’re helping you without your help. The best way you can help them is build a big business with their backing, and that requires you to appear self-made.  [I should mention that disclosure of participation in the Venture Capital Access Program is optional.]
  • Own your “anti-pattern”.
    What “anti-pattern” entrepreneurs fail to realize is being anti-pattern can be turned into an advantage. I used to joke I was always “integrating” startup socials (forgive me for not giving Asian people their due credit as being minorities). Then I realized that made me intriguing to people – but that intrigue would disappear immediately if I wasn’t likeable and verbose in “Startupese”. I made it a point to be more impressive than the other startup founders because I put in the work. That made my skin color a “pleasant anomaly” in the analysis of, do I fit the pattern of a backable entrepreneur? People love anti-pattern when the only thing not fitting the pattern is indeed something as trivial as race, location, or sexual orientation.



Getting a meeting is typically a hurdle if you’re not a member of the traditional American elite…like most of America.  Most investors and other members of the American elite come from a homogeneous background: white, male, straight, Christian (or Jewish, at least in the finance industry), tall, handsome, physically fit, graduate of a select university, with American parents of upper middle class or higher socio-economic status.  So how can you network in to them if you didn’t win the genetic lottery?

This is often the most challenging problem.  The good news is that there are basic steps to address this problem which most founders are not taking advantage of.  One of the reasons I wrote a book about online networks a decade ago was that I saw their power to make sales more efficient, particularly for people who were not a priori in the right networks.  Among the first heavy users of online dating sites were minorities (LBGT, Muslim, Latino, etc.), for the simple reason that online networks gave them a much larger pond to fish in than they could find locally.  Their odds of a successful match went up accordingly.  Similarly, sites like LinkedIn are effectively dating sites for businesspeople.

You may think, “But I don’t use social media, and neither do my (conservative, old-school) potential investors!”  The reality: you and your target investors are in the social media matrix whether you like it or not.   Your potential investors search for you on Google before doing business with you.   You are already a member of gated online communities, which you may or may not be fully leveraging such as your alumni network, local “Moms” or “Dads” mailing lists, and religious institutions.  You can accelerate your sales process by leveraging potential candidates’ digital footprints.  These help you to source leads, filter them, and then run a better educated sales process.

The first step to jump the network hurdle is to figure out the investors with whom you have maximum affinity.  So I suggest figure out all of your possible affinities: your school, your neighborhood religious institution, your sports team, etc.  We live in a radically transparent world, where you can easily zoom in on the investors with whom you have the highest likelihood of getting capital.  Linkedin and Zoominfo are the most powerful broad-purpose tools.  For early-stage founders, I suggest AngelList and Crunchbase.  For later-stage companies, I suggest the Association for Corporate Growth online community, Axial, and Preqin.

Dr. Banaji and her coauthor Anthony Greenwald propose that most of the impact of racism today stems not from proactive attempts to harm, but from our natural tendency to help people like ourselves.  We’re each part of several groups, marked by race, gender, religion, family, alma mater, etc., and we all preferentially help people in those groups.   However, that reinforces the status quo; the 1% get richer.

Your job as a founder is to take advantage of this behavior pattern.  Target investors who are at least one step removed from you.  A potential investor may be interested in your industry, but be based in a different city.  He may have gone to your business school, but he (appears) heterosexual and you’re LBGT.  That point of differentiation is a plus not a minus, because it means that he has access to networks you don’t.  As long as you have some attributes in common, then you have a better shot at getting a meeting and then getting capital.

I also recommend trying to bring investors to you, not the other way around. It can take you 4-6 months to get meetings with 50 investors.  Instead, why not organize a panel/event geared to investors in your industry, and meet 50 people in one room at one time?  This gives potential investors a chance to see you in a leadership role and can dramatically accelerate your fundraising process.  They may not meet you one-on-one in part because of their biases, but they’ll come to your event when you have more brands/credible people in the room.  When I was running an Israel-based company in 1999-2001, my location was a significant barrier.  I used events as a vehicle to connect efficiently with investors when traveling outside of Israel.  Similarly, I worked with Karen Bantuveris, CEO of Volunteerspot*, to organize an “Angel Investing 101event with a particular focus on female investors.

If you haven’t yet left your job to launch your new firm, Mari Zoller, CEO, SNAZZ, observes that you can use your current employer as a launchpad.  Start to build your name and brand and get the right investors to take notice even before becoming a founder.  Speak at a conference, (co)-author articles, build awesome products that get press, ink standout deals – all under your current employer’s umbrella and scope of professional responsibilities.

Jeanne Sullivan, co-founder, StarVest Partners, strongly recommends creating an advisory board, especially in the early days.  “This allows the CEO to gather people with domain experience around him/her and also gives the CEO a reference point for investors. That advisory board would be able to say, ‘Don really knows what to do and how to do it: organized, smart, and more.’”

Don Charlton observes,

“In many cases anti-pattern entrepreneurs have few ‘non-startup’ things in common with the VCs, so it makes it much harder for deeper personal relationships to develop.  I’ve seen people bond over discussing where they grew up and what they like to do today.  That’s harder for me, as I assume most people won’t bond with me over discussing the “rough” childhood I had – one that many African-Americans have experienced. And I have different hobbies and interests [than the modal VC], so that’s often off the table for small talk as well. That means I need to work harder to build real connections so someone feels I’m familiar.”

“Since I’ve raised nearly $20 million in venture capital, it’d be very hard for me to claim bias, which I feel puts the onus on me to explain how I got here. So if I were to be totally, brutally honest, it comes down to this:

  • Get people that “fit the pattern” to support you.
    Social proof – the validation of individuals through social endorsements – is critical to getting everything from angel investment to solid introductions to VCs. No matter what you look like, you’re an outsider until connected people start endorsing what you’re doing. I don’t mean you need someone like Marc Andreessen to endorse you, but you do need someone he’s or she’s invested in to think you’re working on something interesting. You MUST network and gain friends who are “definitely the pattern” and connected to the capital ecosystem. It takes just one of these endorsements to open up many doors for you, plus these people can help you improve your deck and your pitch. Ask them to be brutally honest with you, and even mention you’re concerned that you’re anti-pattern, so you need help fitting the investment pattern.
  • Recognize you must persevere through some painful “gut” feelings.
    Even with all these tactics, sometimes you’re going to feel like you’re not being taken seriously. You’re going to “sense” something is wrong – that someone isn’t comfortable around you, or dismissive of you. You’re an adult – you’re probably right – and you just have to deal with that. But what many people don’t realize is most VCs and startup people are VERY open, not stuffy and a great network of people to be part of. The challenge comes when checks are being written. We anti-pattern people get less checks written to us, and we’re all trying to figure out why – but first we need to remove the convenient excuses.”

“My mother gave me the perfect thought to protect me from being discouraged because of my race: ‘Don, you need to put yourself in a position where you know you’re the best, leaving nothing for people to point to as a reason you’re not. That way the ONLY thing people can use against you if they choose IS your race – and you don’t want to work with those people anyway.’”



If you are targeting an opportunity in the emerging domestic market, some investors will not fully appreciate its importance.  For example, Volunteerspot is targeting online “power moms”, a market which most VCs don’t relate to.  Clearpath Immigration* helps immigrants (mostly Latino) to immigrate to the US.

 All founders selling to new markets have this challenge.  The good news is that the most successful startups are precisely those selling to the newest markets which are most opaque to VCs.  Similarly, Whisk* is providing the backend for mobile-enabled ground transport, a brand new sector.  They’ve faced a similar challenge in talking with some investors who do not understand the dynamics of this new and explosively growing industry, which is why they’ve invested effort in publicly articulating their thesis.

I think a founder can most readily address this challenge by upping the quality of their communications to investors.  Most fundraising decks I review do a poor job of even hitting the basic checklist of information that investors require.  In addition, certain investors (e.g., ff Venture Capital, 645 Ventures, Andreessen Horowitz) have publicly said that they’re especially interested in companies selling to the emerging domestic market; those are among the ones to target.

Don Charlton recommends,

  • Don’t make the typical startup entrepreneur mistakes.
    What’s hilarious is that many anti-pattern entrepreneurs don’t realize their single biggest hurdle is not making the typical startup fundraising mistakes that all new entrepreneurs make – especially me. These are written about everywhere and are easy to avoid. How about you make sure you’re in a big market, with real traction and a solid plan for using new capital, before you start blaming “the man”?
  • Prove more through metrics.
    I truly believe in the meritocracy of Silicon Valley – when you have solid metrics. However, the ground floor to capital is extremely biased towards funding pattern matchers. Look – anti-pattern entrepreneurs are not going to get $1 million for ideas like “Yo”. If you sit across from a VC and say you’re going to build a billion-dollar business, you’re not going to get as much credit as a [white or Asian] Stanford-educated CompSci kid. You’re NOT GOING TO. Accept that you need to prove more to be taken seriously. You might need to bootstrap longer.
  • Recognize these historic times and accept the unfair pressure.
    Anti-pattern entrepreneurs not only need to use these techniques to knock down the doors to opportunity – but DELIVER on that opportunity. Recognize that we are indeed trailblazing.  If Jackie Robinson wasn’t one of the best ball players, the history of Major League Baseball would be very different. Unfortunately, the startup belief that “failure is good” does not apply for us. Failure reinforces the belief there are no black Larry Pages or lesbian Larry Ellisons.  Each one of us that makes into the small group of companies that gets investment needs to take on the added burden of becoming a role model and dedicate themselves to proving that “anti-pattern” is the new pattern. 

Aggressiveness and creativity are the keys.  Own your anti-pattern, and you can jump these three hurdles and win both investors and clients to your company.


* ff Venture Capital portfolio company.  We also use TheResumator to power the ffVC jobs page


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