The cultural influence of this year’s Academy Awards is bound to have longer-lasting effects than years past.
Ever since the all-white nominations were revealed, Hollywood has been engrossed in dialogue after dialogue about inclusivity, diversity, and visibility for people of color.
They’re important conversations to have, and unfortunately, the issues minorities face in the entertainment industry are just as prevalent in technology.
This month, Project Diane published a report called “The Real Unicorns of Tech” that found black female-run companies account for virtually none (0.2 percent) of venture capital deals made from 2012 to 2014. Of the 66,000-plus startups studied for the report, a mere 88 were run by black women. And tech companies founded by black women, the study found, averaged only $36,000 in venture capital.
One Chicago-based startup is breaking free of those molds.
Today, Chicago’s 4D Healthware announced the close of a $610,000 seed round. For seed rounds, it’s as standard as they come, but for CEO and founder Star Cunningham — an African American entrepreneur herself — it’s an achievement that’s 16,000 percent larger than average for startups run by black women.
If her business proves viable, she could be well on her way to securing a million dollars in capital.
That milestone, as sweet as it is for many entrepreneurs, would make Cunningham only the 12th African American woman to secure more than a million dollars in funding for her tech startup.
“There’s a better chance of hitting the lotto or getting struck by lightning,” she said. “It can be very easy to say, ‘Why even bother? Why even try?’”
The MATTER-based company, an online personal health portal that partners with care providers to better manage chronic conditions, develops a software that connects with about 250 various devices (like bluetooth-enabled glucometers and wireless activity trackers) to corral the data care teams need to best manage chronic diseases.
4D’s pivoted approach is in response to a new Medicare value-based payment model launched in January of 2015 that reimburses healthcare providers $40 per patient per month for every 20 minutes spent managing care outside a doctor’s office. 4D’s artificial intelligence software and machine learning algorithms use the data it collects to send SMS and email messages to the patient to help nudge them towards proper disease management.
Cunningham said the new model created a $16 billion market overnight.
“Every month, billions of dollars are being left on the table because this is so new, and providers are challenged with selecting innovate companies to work with in innovate ways,” Cunningham said.
It’s a smart idea in a complex industry, one that won over investors despite unsavory statistics.
When asked why it might be harder for black women with big ideas to land VC capital, Cunningham said investors are likely to keep investments within a degree or two of their network in order to minimize risk. Because there are fewer minorities at the tables within those circles, it’s hard for people of color — and particularly women — to land VC investments.
Another hurdle, recently explored by the Chicago Tribune, is a shortage of venture capitalist that come from a diverse background. The lion’s share are white (87 percent) and men (89 percent).
“I don’t think Chicago is unique in any way in terms of this challenge,” Cunningham said.”It is a national challenge; it is a VC challenge.”
Cunningham said the funds will be used to invest in the technology and grow the company’s sales and service teams. Along the way, Cunningham said she’s focused on effecting change by example.
“I hope to be part of the change as an example of a minority woman who raised money — who was able to get investors to see past that and look at the business opportunity instead,” she said. “I’m looking forward to growing a great company.”
Photo via 4D Healthware