Tribe Network Launches Venture Capital Program for Racialized Business Founders
HALIFAX–The statistics are clear: in Canada, it is extremely challenging to get investment for startups owned by racialized people. According to the Tribe Network, in 2022, Black business owners received less than one per cent of all the venture capital available in Canada.
Tribe is a Halifax-based organization that helps entrepreneurs who are Black, Indigenous, and People of Colour. It has launched a program to level the playing field, called Tribe Ventures. The goal is to raise $20 million from investors to support pre-seed and seed-stage businesses so they can grow and thrive. Eighty-five per cent of the funding will go to racialized entrepreneurs across Canada. The other 15 per cent will go to businesses in Africa.
“We have a pipeline of entrepreneurs who we support today,” says Alfred Burgesson, the founder and CEO of Tribe Ventures. “We support them with coaching; we support them with mentorship. So, from an early stage, we’re able to identify high-potential founders and companies.”
“We’ve had success in the last year alone, referring three entrepreneurs to venture capital investment. We’re noticing that we have a pipeline that is strong and we want to put ourselves in a position where we can back these founders early.”
When asked why it is so difficult for racialized founders to receive venture capital money, Burgesson noted the systemic issues inside the investment world.
“This is similar to the thesis around why we need more women-led firms too,” said Burgesson. “People invest in what they know. People invest in what they believe in. People invest in what they can relate to. So if the venture capital ecosystem is just a homogenous group of, let’s say, white men, then the likelihood of them investing in a female founder or racialized founder is much lower.”
“It takes leadership at the fund level that is inclusive and diverse for this ecosystem to also invest in founders that are diverse.”
“Specifically, to Black people, we have not gotten the support we need from financial institutions historically. There are communities of Black people that were promised land and they never got the deeds. There are various examples of Black communities that were literally bulldozed.”
To raise the $20 million, Tribe will seek out investment from major financial institutions but also funds from the provincial and federal levels of government. Burgesson says that they will look into the newly-created Social Finance Fund. It’s a $755 million pot of money set up by the feds earlier this year.
“Racialized founders deserve investment because they have a lot to offer to our society,” states Burgesson. “Canada’s becoming a more racially diverse population. Atlantic Canada is becoming a more racially diverse population. And in order for us to reap the benefits of that diversity, we need to invest in these racialized founders. They are underserved. They’re underfunded. And they are underestimated.”
Tribe has already created a list of more than 100 business founders across Canada who may be eligible for funding once the money is raised. Burgesson sees a lot of opportunity for startups in the science and technology sector.
“We see opportunity in places like ocean tech, clean energy, and life sciences,” he said. However, we don’t want to limit our investment to just those sectors.”
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].