According to Inc, Tracey Pickett left her legal career in 2016 to start Hairbrella, creating rain-protective headwear after experiencing ruined salon hairstyles. After failing to secure funding from white male angel investors, she connected with Jewel Burks Solomon, who provided a $30,000 personal loan and mentorship. Solomon, who had sold her company Partpic to Amazon, co-founded Collab Capital in 2019 specifically to invest in founders of color. The firm made its first investment of $500,000 into Hairbrella in 2020, helping the company become profitable and double revenue over three years with projected 2025 revenue of $14 million. Meanwhile, Black founders received just 0.4% ($730 million) of the $314 billion total U.S. venture funding in 2024, a two-thirds drop from the 2021 peak of $4.9 billion.
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The brutal funding gap
That 0.4% statistic is just staggering when you really think about it. We’re talking about Black founders getting less than half a percent of all venture capital money in 2024. And this isn’t some gradual decline – it’s a massive two-thirds drop from just three years earlier. According to Crunchbase data, that $730 million represents the smallest slice Black entrepreneurs have seen in years.
Here’s the thing: this collapse in funding comes exactly when we’re seeing DEI initiatives getting rolled back across corporate America. It’s like the perfect storm against Black entrepreneurship. But the research from Columbia Business School shows something really important – when Black people lead investment teams, the funding gap narrows by nearly 50%. That’s not a small difference. It’s basically cutting the problem in half.
How Collab’s approach works differently
Jewel Burks Solomon’s journey with Collab Capital is fascinating because she’s building the support system she wishes she’d had. After selling Partpic to Amazon, she could have just taken her money and run. Instead, she’s creating a pipeline that starts with personal investment (like that $30,000 loan to Tracey) and scales up to serious venture funding.
What’s really smart about Collab Capital’s model is they’re not just writing checks. They’re providing the mentorship and industry connections that first-time founders desperately need. Tracey Pickett’s story shows this perfectly – she went from struggling to find any investors to building a company on track for $14 million in revenue. That transformation happened because someone who understood her market and her challenges actually believed in her vision.
Beyond the numbers
So why does this matter beyond just fairness? Because we’re missing out on huge market opportunities. Hairbrella solved a very real problem that millions of women face – protecting expensive hairstyles from rain. That’s not some niche concern. It’s a massive market that traditional investors completely overlooked because they didn’t understand the problem.
Think about how many other products and services we’re missing because the people who understand those problems can’t get funding. The current VC system is basically leaving money on the table by ignoring entire segments of the population. Firms like Collab aren’t just doing social good – they’re spotting opportunities that everyone else is blind to.
What comes next
The scary part is that 2024’s numbers suggest we’re moving backward, not forward. With the DEI backlash in full swing, the pressure is on funds like Collab to prove that investing in diverse founders isn’t just the right thing to do – it’s smart business.
But here’s the hopeful part: companies like Hairbrella show that when Black founders do get proper support, they can build profitable, growing businesses. The template exists. The question is whether more investors will recognize that backing diverse teams isn’t charity – it’s just good investing. And in a competitive market, overlooking 99.6% of the entrepreneurial talent seems like a pretty bad strategy.
