Saturday, September 30, 2023

Closing the Gap Between Racial Wealth through Tech Startup Jobs and Entrepreneurship

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Shreya Christina
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It’s not just the founders of venture capital-backed startups who are clearly not diverse in general. There are also usually few employees who are people of color. And that opens up yet another avenue to wealth-building that has usually been largely closed to most members of marginalized communities for a long time.

But how do you get a foot in the door if you don’t have a network of connections or even an understanding of how the tech startup world works?

With that in mind, in 2020, six founders, venture capitalists, and tech and nonprofit executives are co-founders color wave, a nonprofit with a fellowship program aimed at closing the racial wealth gap by providing professionals of color access to venture-backed startups. It is now developing another program for alumni and others interested in becoming founders themselves.

“When you come in as an early employee and your stock options grow, that can be a transformative opportunity to build wealth,” said John Roussel, executive director and co-founder of Colorwave.

Figuring out the ecosystem

Colorwave was founded in November 2020, after the death of George Floyd. The eight-week virtual program aims to help professionals of color understand how the world of tech startups works, the better they can get jobs in those companies or start their own. Topics include everything from stock compensation to salary negotiation. Plus, there are speakers: employees and founders of high-tech growth startups, including founders of companies like Allbirds, Nextdoor, and Lexo Capital. “We’re helping them figure out the ecosystem,” Roussel says.

The first four weeks focus on things like how venture-backed companies are funded and what it’s like to work for such companies, often as one of the 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 about making the transition, with lessons on, for example, how participants can tell their story or how to negotiate, as that process may differ from the usual approach at a large company or a non-profit organization, for example. (Think about negotiating the equity component of a compensation package or considering the tax implications of that arrangement).

At the end, the program connects participants with VCs and HR people at startups.

A job and a salary increase

About 200 students have participated so far. About 70 of them have found new jobs at startups or have been promoted at their existing companies, Roussel said.

Esther Leonard is one such participant. As a career professional at Boston University, she had no connections to the startup arena. But after coming across information about Colorwave on LinkedIn, she decided to apply and joined 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 significant pay raise. “We need more black and brown people in this space,” said Leonard, who also joined the program because of her interest in helping people of color succeed.

A pilot for founders

Colorwave also has another goal: to help people who want to become founders themselves. To that end, they just ran a four-week trial entrepreneur 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,” said Alex Ocampo, who launched Ganance, a startup that turns watches into smart devices. “So it’s helpful to have a community that provides resources for founders like me.”

It all started shortly after George Floyd’s murder, when a group of six people, all of whom were the… University of California, Berkeley at some point in their lives and had volunteered for it Stiles Hall† That nonprofit provides mentors and resources to black, Latinx, and Native American high school students who are applying to college, and also assists community college students who want to transfer and coach elementary, middle, and high school students to increase their school readiness, among others. programs.

Since most participants work full-time at other jobs, Colorwave takes place after working hours. But it develops on-demand content for people who don’t have time to attend the regular program.


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