Closing The Racial Wealth Gap Through Tech Startup Jobs And Entrepreneurship
It isn’t just founders of venture-backed startups who tend to be distinctly non-diverse . There also typically are few employees who are people of color. And that makes for yet another route to building wealth that usually has long long been largely closed to most members of marginalized communities.
But how do you get your foot in the door if you lack a network of connections or even an understanding of how the the tech startup world works?
With that in mind, in 2020, six founders, venture capitalists and tech and nonprofit executives co-founded Colorwave, a nonprofit with a fellowship program aimed at closing the racial wealth gap by providing professionals of color access to venture-backed startups. It’s now developing another program for alumni and others interested in becoming founders themselves.
“If you come in as an early employee and your stock options grow, that can be a transformational opportunity to build wealth,” says John Roussel, executive director and co-founder of Colorwave.
Figuring Out the Ecosystem
Colorwave was formed in November 2020, after the death of George Floyd. The eight-week, virtual program focuses on helping professionals of color understand how the tech startup world works, the better to get jobs in those companies or start one themselves. Topics include everything from equity compensation to salary negotiation. Plus there are speakers—employees and founders of high-tech growth startups, including founders of such companies as Allbirds, Nextdoor and Lexo Capital. “We help them figure out the ecosystem,” says Roussel.
The first four weeks focus on such matters as how venture-backed businesses are funded and what it’s like to work at such enterprises, often as one of a few people of color at the company. Executives and other experts speak to the group on the topic of the week.
The second half is all about making the transition, with lessons about such areas as how participants can tell their story or how to negotiate, since that process can differ from the usual approach at a big corporation, say, or a nonprofit. (Think negotiating the equity component of a compensation package or considering the tax implications of that arrangement).
At the end, the program connects participants to VCs and HR people at startups.
A Job and a Salary Increase
So far, about 200 students have participated. Around 70 of them have either found new jobs at startups or been promoted at their existing firms, according to Roussel.
Esther Leonard is one such participant. A career services professional at Boston University, she had no connections to the startup arena. But after stumbling across information about Colorwave on LinkedIn, she decided to apply and entered the cohort last fall. After graduating, a Colorwave alumnus referred her to a job as a recruiter at a tech startup. She got the job—and a substantial salary increase. “We need more Black and Brown people in this space,” says Leonard, who also joined the program because of her interest in helping people of color succeed.
A Pilot for Founders
Colorwave has another goal, as well: to help people who want to become founders themselves. To that end, they just ran a four-week pilot entrepreneurial accelerator for a cohort of two people, both of whom had participated in the first Colorwave program. “I don’t have the safety net of a big corporate job or family money,” says Alex Ocampo, who launched Ganance, a startup that turns watches into smart devices. “So it’s helpful to have a community providing resources to founders like me.”
It all started soon after George Floyd’s killing, when a group of six people, all of whom had attended the University of California, Berkeley at some point in their lives and had volunteered while there for Stiles Hall. That nonprofit provides mentors and resources to Black, Latinx and Native American high school students applying to the university, as well as helping community college students looking to transfer and coaching elementary, middle and high school students to increase their college readiness, among other programs.
Because most of the participants are working full-time at other jobs, Colorwave takes place after work hours. But it’s developing on-demand content for people who don’t have the time to attend the regular program.