What Black tech founders need to know before raising their first venture capital round

For many Black tech founders, raising venture capital is often positioned as the ultimate milestone. It signals that your idea is validated, your business is taken “seriously,” and opportunities begin to take shape. As the managing partner of an early stage VC firm, and a 3X Black tech founder that speaks and meets with thousands of founders a year, I can tell you the truth is far more nuanced. Venture capital can be powerful, but it’s not for everyone. 

Before chasing your first check, founders need clarity, preparation, and strategy. Fundraising is not just about storytelling or networking; it’s about understanding the system you’re stepping into and deciding whether raising venture capital truly aligns with your long-term vision. 

Venture Capital Is a Business Model, Not a Badge of Honor

It’s important for first time founders to understand the venture business model. Investors are not simply backing “good ideas”; we are seeking outsized returns within a defined time horizon. That means VCs are looking for companies that can scale rapidly, dominate large markets, and potentially return 10x, 50x, or even 100x their investment. 

For founders, especially those from underrepresented backgrounds, this distinction matters. Too often, VC is treated as a symbol of success rather than a strategic tool. Before you fundraise, ask yourself these tough questions: Is your business designed to scale quickly? Does it address a large enough market? Can it grow aggressively without breaking what makes it special?

If the answer is no, that doesn’t mean your business isn’t valuable, it just simply means venture capital may not be the right fuel for it. And that’s okay. 

VC Readiness Starts Long Before the Pitch Deck

Many first-time founders assume fundraising begins when the pitch deck is finished. In reality, that’s often the final step. True VC readiness starts months earlier. It takes time to develop your story. Even at the earliest stages, founders should be able to clearly articulate who their customer is, what problem they’re solving, and why their solution is meaningfully different from competitors who are already in market. Part of that story are performance metrics, why your team, and why is this the right time.

Equally important is team readiness. VCs invest in people as much as products, especially first-time founders. You’re almost betting on the person more than you are the business concept. Founders with complementary skill sets, operational discipline, and the ability to execute consistently tend to inspire confidence with VCs. For solo founders, this often means building a roster of strong advisers, impressive early hires, and/or strategic partners who help de-risk the business. The more prepared you are, the better leverage you’ll have throughout the fundraising process.

Holding Your Power in VC Rooms

Venture capital, like most industries, doesn’t hold Black founders in mind, and that reality shows up in subtle and not-so-subtle ways. From biased pattern matching to lowered expectations, founders will encounter dynamics that challenge their confidence.

That’s why entering investor conversations with the right mindset is critical. You are not “lucky” to be in the room; you earned your place there. I see founders make this mistake often. Investors are evaluating an opportunity, but you need to remember that you’re also evaluating them. Not every VC is the right fit for your business. Alignment, values, and long-term partnership matter just as much as check size and valuation.

Holding your power means controlling the narrative around your business, being clear about your vision. It also means taking a collaborative approach to conversation as opposed to a subordinate one. You are supposed to answer questions to VCs but you’re not in a job interview. Confidence (not desperation), when backed by preparation and performance, can shift the entire dynamic of a fundraising conversation.

Knowing When Venture Capital Is Or Isn’t The Right Move

It’s important to remember that not every successful company needs venture capital. Bootstrapping, revenue-based financing, grants, and strategic partnerships can often provide growth capital without sacrificing equity or control. This is more possible than ever in the era of agentic AI.

Founders need to be sure that they have a massive market, directional customer demand that validates the market, and the right team at the earliest stages. Even better is true confidence in scaling the offering to $100M+ revenue in 5–7 years, given ideal conditions.

VCs are looking to accelerate something that’s already working, not serve as a lifeline. Raising money out of desperation only leads to two possible outcomes: a bad deal from a predatory partner or no deal at all. Extraordinary people with amazing opportunities know their worth in a room. 

It’s also important to consider, the larger the raise, in most cases the deeper the partnership with your investors. This is why setting up the correct relationships up front is key. You want to be in position to work with your board, not for your board.

Take the time to evaluate whether a VC truly fits your business model, personal goals, and tolerance for risk. 

The Real Work Starts After the Check Clears

Fundraising is often glamorized, but the real work begins after the money is in the bank. Scaling a team, managing burn, hitting milestones, and navigating investor expectations can be more challenging than raising the round itself. Post-funding success requires operational maturity, strong communication, and the ability to grow as an individual. You’ll quickly find that what you did to get to level one does not work to get you to level two. This is where clarity of values matters. Founders who raise with intention and choose investors who understand and respect their vision are better positioned to grow without losing themselves 

Raising venture capital is a strategic decision. Understand how VC works, prepare deeply, know how to manage your power dynamic with investors, and choose the right path to build your company (not theirs).

If you decide that venture capital is the right path for you, the goal isn’t just to get funded. It’s to build something meaningful, scalable, and sustainable on your own terms.

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