What Black tech founders need to know before raising their first venture capital round

"For many Black tech founders, raising venture capital is often positioned as the ultimate milestone. It signals that your idea is validated, your business is taken "seriously," and opportunities begin to take shape. As the managing partner of an early stage VC firm, and a 3X Black tech founder that speaks and meets with thousands of founders a year, I can tell you the truth is far more nuanced. Venture capital can be powerful, but it's not for everyone."

"It's important for first time founders to understand the venture business model. Investors are not simply backing "good ideas"; we are seeking outsized returns within a defined time horizon. That means VCs are looking for companies that can scale rapidly, dominate large markets, and potentially return 10x, 50x, or even 100x their investment. For founders, especially those from underrepresented backgrounds, this distinction matters."

"Too often, VC is treated as a symbol of success rather than a strategic tool. Before you fundraise, ask yourself these tough questions: Is your business designed to scale quickly? Does it address a large enough market? Can it grow aggressively without breaking what makes it special? If the answer is no, that doesn't mean your business isn't valuable, it just simply means venture capital may not be the right fuel for it. And that's okay."

Venture capital operates as a business model focused on outsized returns within a defined time horizon, not as a symbol of achievement. Investors seek companies that can scale rapidly, dominate large markets, and deliver 10x–100x returns. Founders must assess whether their business is structured for aggressive growth and large addressable markets before fundraising. Fundraising requires clarity, preparation, and strategy; it involves understanding the investment system rather than only storytelling or networking. VC readiness often begins months before assembling a pitch deck, as founders need time to develop a coherent growth story and operational foundations. Venture capital can be powerful but is not universally appropriate.

Read at Fast Company