1)After having pitched 100s of investors, I’ve heard this one too many time: “This would make a great impact investment.”

Now let’s talk about that phrase “impact investment” for a bit.

2) I’ve come to believe that this phrase gives away far more than it would seem on its face. I now find it deeply offensive and troubling. Let me explain.

3) It’s the equivalent of saying to a black person who is wanting to attend a college like Harvard, “oh, I heard they have a diversity quota they have to meet, you should apply.”

4) Its the kind of help that seems good on the surface, but comes as a backhanded assessment of you and your business.

They are telling you that you aren’t building a “real business”.

5) And by “real business” they mean, something that can be successful as a business on its own merits.

You become an “impact investment” when your business is perceived as a societal good, or you are an underrepresented founder.

“Impact investments” are not the next TikTok.

6) So guess what black and brown founders get told all the time no matter what they’re building.

“You should talk to impact investors”

Basically,

“you’re business isn’t a real one, but there are investors who will invest in someone like you no matter what, isn’t that great?”

7) Now this is doubly so if you’re building something that is “world changing”. You get slotted into “impact investment” so fast. Now of course every founder is pitching that they will “change the world” but for black founders it’s not real somehow if you actually are.

8) Your business becomes like a cute side project, a charity, something folks will be cheering you on to succeed in.

But will they write you a check? No.

It’s “impact” not “venture”.

9) But such a small percentage of venture dollars go to black and brown founders, that we’re honestly happy to get money from like literally ANYWHERE.

So we don’t often see the slight for what it is.

10) We can ride the bus, but only in the back. We can drink, but only from this fountain. And we can raise, but from impact funds, not venture.

11) Now look, I’m actually not ragging on impact investors. They’re actually doing great work and making smart investments in underrepresented founders.

I’m taking issue with every other investor who sees a black founder and immediately thinks, “impact!”

12) White founders get to have an idea that can expand overtime. Start small and then take on more of the market. Pivot and be hailed as a genius. “Disrupt” in a category where there is traditionally no economics. They get to scale.

13) Black founders though... the market has to be huge from day one, the ability to execute 100% immediately, work in a proven category, and then to top it all off... have experience having done it already.

14) and even then... speaking from experience here... we get told “have you talked to any impact investors?”