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Venture capital (VC) funding is an essential source of capital for many entrepreneurs looking to start or scale their businesses.

It’s worth noting that the topic of equity distribution and VC funding can be complex and varies based on different factors such as industry, location, and individual circumstances.

However, it’s important to consider the principles of fairness, equality, and meritocracy when discussing equity distribution.

Historical disparities in Venture Capitalism continues to affect those underrepresented today

It is widely recognized that there are existing disparities in VC funding when it
comes to underrepresented groups, including BIPOC (Black, Indigenous, and
People of Color) and women entrepreneurs.

Studies have shown that these groups face significant challenges in accessing VC funding, despite demonstrating equal or greater potential for success.

Advocates for diversity and inclusion argue that the traditional VC model often
perpetuates systemic biases and can be exclusionary to underrepresented

Efforts have been made to address these disparities, such as the rise of dedicated funds that focus on investing in diverse founders and the development of programs that support underrepresented entrepreneurs.

Less equity does not equal more trust

However, suggesting that BIPOC and women entrepreneurs should give up more
equity to secure VC funding can be seen as perpetuating unequal power dynamics.

Instead, many proponents argue for a more equitable and inclusive approach to
investment, where investors actively seek out diverse founders and create fair terms
that allow for shared success.

It’s important to foster an environment that promotes equal opportunities for all
entrepreneurs, regardless of their background. By doing so, the entrepreneurial
ecosystem can benefit from a wider range of perspectives and innovative ideas,
ultimately leading to a more diverse and prosperous business landscape.

Keep in mind that opinions on this topic may vary, and it’s always valuable to
engage in a thoughtful and respectful dialogue to better understand various

Herbert Drayton is the managing partner of HI Mark Capital. Based in Charleston, HI Mark Capital is a venture capital firm that invests in BIPOC and women owned tech-enabled businesses in the Southeast....

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