Creating the Runway for Under-Resourced Founders

Kathryn Finney
3 min readOct 6, 2022

As a VC, I often wonder what amazing opportunities we are missing out on because the runway just isn’t there for diverse founders.

The recent raise in August of over $350 million dollars by the ethically-challenged founder and former CEO of WeWork, Adam Neumann, for a yet-to-be-launched venture, has already outstripped the amount of funding that all U.S. startups with Black founders raised in the entirety of Q2 of 2022. This stark reality highlights the challenges that under-resourced founders face as they seek out investment for their ideas.

In defense of the investment, several investors highlighted that the lessons learned by Neumann as he led WeWork to, at one point, a $3.5 billion dollar valuation, would serve him well in Flow, the name of his current real-estate focused enterprise. However, how much of Neumann’s stated success is based on his own ingenuity versus the resources that he (and other white male founders) are given to “figure it out.” This is an especially poignant question as recent market challenges have caused a significant disruption in the amount of capital flowing to startups in general- and particularly women and BIPOC-led startups. CrunchBase reported in June that investment to Black founders has been significantly below the quarterly average since the first quarter of 2021. This is no new phenomenon, but one that is especially concerning given the diversity theater that many investors and funds touted in the wake of George Floyd’s murder. Promises were made to “diversify” their portfolios, but it has left many in the industry asking for them to show some receipts. Meanwhile, investment in female founders slowed in the first quarter of 2022, according to PitchBook.

Neumann’s failures at WeWork, though well-documented and even recently given the Apple TV treatment, have not prevented him from getting a second chance. And there’s little question that his gender and race is a big reason for that. Rebekah Bastian’s piece in Forbes this month analyzes ten articles on CEO takedowns and finds gender disparities in how the media discusses founders and failure. In short, women founders get criticized dearly for making people feel bad or being assertive leaders, while male founders get the benefit of the doubt right up until they’re ousted for major misconduct like accused sexual abuse or fostering a disciminatory, violent work culture.

I’m not saying that the Neumann investment is a bad investment. Failure, and what you learn from going through the process, is a necessary part of the path to success for any startup founder. Many of today’s biggest successes, from Apple to Uber to even Tesla, were met with well-documented failures early on in their development. And that’s the point, isn’t it? Each was given the runway to figure it out, a luxury seldomly afforded to BIPOC and women founders. While these under-resourced founders develop their businesses in markets with high margins, significant MOAT, and low customer acquisition costs, they grapple with the immense pressure to produce results as quickly as possible.

A perfect example is the decades of underinvestment in Black hair markets. The current valuation for the U.S. haircare industry is $12.91 billion, and Nielsen reported in 2021 that African Americans were 2.4 times more likely to buy hair treatments than the average beauty shopper. And this undervaluing isn’t limited to haircare — a 2021 McKinsey report estimated that expanding business offerings to meet the needs of the Black community could add $300 billion of value to the economy every year.

Startups are rushing to fill this void in diverse areas, including support for minority creators; increasing the ranks of BIPOC involved in clean tech; retrofitting buildings in disadvantaged communities to help them weather the effects of climate change; and providing support to child care providers, many of them of color, to improve and scale their services.

At Genius Guild, as we think about portfolio construction and future funds, we see a real opportunity to get in on the ground floor in markets like health care in underserved communities, clean tech that serves the needs of urban communities, and solving the child care crisis, where both individual and enterprise customers are actively seeking — and paying top dollar — for solutions. These solutions aren’t only good business, but good community. Companies like Incredible Health and Cityblock, newly-minted unicorn ($1 Billion valuation) health-tech companies led by Black women founders, clearly demonstrate the investment opportunities. We continue to support founders building BOLD solutions in this overlooked market (and if you know of any — please have them pitch us).



Kathryn Finney

Builder of Awesome Things | CEO & Founder Genius Guild. More info: