Presentation Abstracts

Anthonia Carter, Cornell University

How race and gender stereotypes impact crowdfunding outcomes

While crowdfunding is expected to democratize access to capital, evidence shows disparate crowdfunding outcomes for historically marginalized communities. Prior studies have explored the role of demographics, such as race or gender, individually on crowdfunding outcomes, but not the role of race and gender intersectionality. We aim to understand whether crowdfunding improves access to funding across race and gender more comprehensively. We explore factors such as founder-market fit (whether the founder is perceived as technically or culturally competent to lead the project) and production complexity (project feasibility due to regulatory or technological obstacles) that may exacerbate or mitigate discrimination against Black female

founders.

We first analyze projects on Kickstarter between May 2019 and June 2021. For each project, we label the gender and race of the founder. Evidence suggests a complicated relationship between project success, race, and gender roles. Black founders exhibit a much lower funding success rate than non-Black founders. While for non-Black founders, funding success rates are similar between male and female entrepreneurs, among Black founders, female entrepreneurs appear to have a higher success rate than male founders. However, this pattern may be misleading. Looking into Kickstarter’s most popular project categories, such as games and

technology, we find meager participation by Black female founders and abysmally low success rates. Instead, Black female founders seem to focus on less popular and arguably less complex project categories.

We complement our empirical analysis of archival Kickstarter data with a forthcoming experimental study where we ask participants to evaluate campaigns in terms of market potential, project quality, and founder competency to establish a basis for causal inference. We vary the product’s complexity level and target market for the projects shown. To explore the role of race and gender on backers’ decisions, we manipulate the race and the gender of the project creator.

April Burrage, University of Massachusetts Amherst

Examining State R&D Policies and Federal Grant Opportunities: Analyzing the Effect on Small High-Tech Businesses from Underrepresented Groups

This paper examines how state R&D policy affects federal grant opportunities for high-tech startups from socially disadvantaged groups. I examine how state research

and development (R&D) tax credits for startups affect interest and participation in the federal Small Business Innovation Research (SBIR) program, which is explicitly charged with encouraging minority and disadvantaged participation in technological innovation. Employing a doubly robust, staggered difference-in-differences estimator, the study utilizes variations in the implementation of state R&D tax credit programs to examine the impact on all startups, as well as the differential effects by race and gender. The results suggest that the impact of R&D policies on SBIR success for both underrepresented and non-underrepresented businesses varies by state, with underrepresented entrepreneurs showing post-implementation trends similar to non-underrepresented entrepreneurs.  However, state R&D support does not help socially disadvantaged startups close the gap in receipt of federal support for technological innovation.

Ini Umosen, UC Berkeley

Racial Wage Gaps in the Gig Economy: Evidence from an Online Tutoring Platform

This paper investigates to what extent the racial disparities observed in traditional labor markets extend to online freelance marketplaces. Several characteristics of these marketplaces make them a compelling setting for studying such disparities. Freelancers can freely set their own rates and availability, and the rates charged by other freelancers are clearly visible. Both subjective information, like student reviews, and objective statistics, like number of projects completed and years on the platform, are also easily observed by all marketplace participants. Thus, the upshot of the online platform setting is that several potential mechanisms for wage gaps; bargaining,lack of pay transparency, wage penalties for job flexibility, and statistical discrimination, are greatly weakened. I use a sample of 6,000 freelancer profiles from Italki.com, a platform for freelance foreign language tutoring. After controlling for much of the information available on a tutor’s profile page I find that Black and Hispanic tutors charge 9 and 7.4 percent lower rates compared to White tutors. Furthermore, the racial gap among female tutors is twice the size of the male racial gap. It is striking that such large racial gaps persist in digital marketplaces that are especially transparent in the information marketplace participants have access to.

Job Mwaura, University of Witwatersrand

Bridging the Digital Divide: A Study of Technology Entrepreneurship and Equity in Pastoralist Regions of Kenya

The digital revolution has brought about significant economic transformations globally, including Kenya, which has been hailed as the "Silicon Savannah" due to its technological advancements. This research interrogates the equity implications of these developments by investigating the participation of various socio-economic groups in Kenya's tech entrepreneurship scene. Despite the government's substantial digitisation efforts spanning government payments, land registrations, tax collection, and procurement services, this study reveals a concerning underrepresentation and marginalisation of certain populations, such as Kenya's pastoralist communities. These groups, despite their significant contributions to Kenya's GDP, are often sidelined in the nation's digital projects due to their socio-economic, cultural, and political contexts. This research thus seeks to understand how government digitisation projects inadvertently perpetuate such marginalisation and how the Kenyan government can actively promote inclusivity in its digitisation initiatives. The study involves interviews with individuals from pastoralist communities and a thorough examination of Kenyan government digitisation projects, policies, and strategies. It aims to offer insights into the promotion of equity in the Kenyan tech entrepreneurship space, particularly benefiting communities historically underrepresented in the digital landscape.

Mauricio Mercado, Iowa State University 

MINORITY ENTREPRENEURS AND VENTURE CAPITAL FUNDING

Despite minority entrepreneurs being prone to starting more businesses than their non-minority counterparts these underrepresented groups are met with limited probabilities of receiving VC funding. To date, our understanding of how entrepreneurs’ minority status influences VC decision-making is limited. The lack of access to VC capital that minority entrepreneurs face is particularly problematic as it precludes the start-up from achieving its growth potential, hinders its ability to grow at a rate that is comparable to start-ups owned by non-minority competitors, and at a broader level deprives the economy of countless potential new jobs created. To understand the inequitable funding that minority entrepreneurs receive, I analyze the VC-minority entrepreneur relationship using the stereotype content model (SCM) and Intergroup Contact Theory. Specifically, I hypothesize that entrepreneurs’ minority status, relative to non-minority entrepreneurs, negatively affects investor willingness to fund such ventures via the assessment of trustworthiness and competence of the entrepreneurs. However, I posit that VCs engaging in positive imagined intergroup contact may ameliorate the negative effects of VC stereotyping. My findings expand our systematic understanding of the investor-minority entrepreneur relationship by explaining the mechanisms through which investors make decisions about minority entrepreneurs, how dissimilarity biases influence VC decision making, and how minority entrepreneurs can potentially counteract negative subconscious investor perceptions.

Michael Neal, Urban Institute

The Causes and Consequences of Racial Disparities in Technology Adaptation Among Depository Institutions

Black credit unions have a greater focus on serving the Black community than the rest of the banking industry. By offering checking and savings accounts, Black credit unions provide an alternative to high interest checking cashing outfits. And through services such as mortgage and small business lending, Black credit unions can extend wealth-building opportunity to its members benefiting the Black community more broadly. However, our forthcoming work indicates that Black credit unions have fewer assets than the average federally insured credit union. The lack of size among Black credit unions, both in membership and in capital, limits their reach and weakens their impact.

One area of opportunity is in technology. Strengthening the technological infrastructure of Black credit unions could improve operational efficiency and potentially expand membership among the Black community. Our analysis illustrates that only 52 percent of Black credit unions offer an informational website, 50 percent offer online banking and 36 percent offer a mobile application in the fourth quarter of 2022. In contrast, 82 of all non-Black credit unions offer an informational website, 83 percent offer online banking and 73 percent offer a mobile application.

Our earlier analysis suggested at least two headwinds. First, Black people are less likely to have internet or mobile phone access which may reduce the demand on Black credit unions. Second, Black credit unions engage in relationship banking, a credit decisioning model that uses greater human interaction focused on the individualized needs of borrowers, which may limit the use of some technology.

Subsequent analysis confirms the correlation of technological adoption with the intensity of human interaction as measured by the number of credit union members per branch, and it also reveals that technological adoption is related to measures of credit union size, both assets and the number of members, as well as the share of total assets made up of consumer loans outstanding.

However, the role of race is of particular interest in this analysis. The impact of race on technological adoption could be informed by disadvantages faced by communities of color as they engage with financial institutions and those faced by minority depository institutions as they interact in the larger marketplace. Future work should appreciate these compounding factors as we better understand racial inequities at all levels.

The results to date, build on our initial work and can inform the research and policy community in several ways. First, it highlights the key barriers to technological entrepreneurship among credit unions. Second, it expands rigorous analysis from minority banks to also credit unions. And third, because the dearth of digital banking offerings by Black credit unions is occurring against the backdrop of deeper digital banking penetration across the financial services industry more generally, this research expands the discussion of financial inclusion from racial disparities on the demand side through the un- and under-banked to inequities on the supply side as well.

Mujtaba Ahsan, San Diego State University

Navigating Challenges and Achieving Venture Goals: The Role of Mentors in Ghanaian Tech Startups

Entrepreneurial mentoring has attracted scholarly attention over the last decade. Not surprisingly, this growing academic interest in mentoring parallels the growth in number of accelerators and incubators globally as it is a core component of these programs (Assenova, 2020; Cohen, 2013). This emerging literature reveals several benefits of mentoring for entrepreneurs, including enhancing entrepreneurs’ ability to recognize opportunities and develop necessary competencies to pursue the opportunities (Ahsan, Zheng, DeNoble, & Musteen, 2018; Ozgen & Baron, 2007; St-Jean and Tremblay, 2011). For instance, St-Jean and Audet (2012) found that mentoring provides cognitive and affective learning advantages, such as enhanced knowledge, increased self-efficacy, and reduced feelings of isolation. Similarly, Ahsan and colleagues (2018) found that effective mentoring and positive affect empower student entrepreneurs to cultivate their entrepreneurial identity, enabling them to gather resources and take decisive action to advance their ventures.

While this emerging literature provides interesting insights on the benefits of mentoring, studies have primarily focused on entrepreneurs in well-developed contexts. The challenges that technology entrepreneurs in Africa, particularly in sub-Sharan countries such as Ghana, experience is significantly different compared to entrepreneurs in countries such as U.S. and U.K. due to institutional voids that give rise to pronounced disparities.  Although the number of accelerators and incubators in Africa have increased over the last few year, it is unclear how these programs are assisting entrepreneurs to overcome deeply entrenched resource inequities prevalent in this context (Ahsan, Adomako, & Mole, 2021).  To address this crucial issue, we ask how mentoring shapes founders framing of the issues amidst institutional challenges. To examine this question, we conduct a qualitative study of technology entrepreneurs in a Ghanian incubator.  Our study uses interviews with 16 founders to gain an understanding of the challenges technology entrepreneurs in Ghana experience and how mentoring shapes their strategies to overcome these challenges. Our findings show that founders face three main challenges: access to funding, access to human capital, and market acceptance.  Mentors’ feedback (i.e., business, technical, and emotional) had a substantial influence on the approaches that founders adopted to surmount these challenges. Specifically, mentors’ input influenced how founders frame these challenges as knowledge gaps, prioritize their relevance, and develop strategies to overcome them.  

Our study contributes to the growing literature on mentorship and learning in incubators in several ways. First, our focus on Ghana complements previous studies that has mostly focused on incubators in developed contexts.  Second, our study builds on prior findings that show cognitive learning benefits by zooming in on the content of mentors’ feedback and its influence on founders framing of knowledge gaps and strategies to overcome them. Third, our focus on content compliment recent research findings in the African context that focused on mentors’ ability as measured by mentees’ performance (Assenova, 2020). Our study enable us to tease out the challenges Ghanian technology entrepreneurs experience and the support they need to overcome them. 

Nicolas Silva, The University of Texas at El Paso 

Latine Bioentrepreneurship

Environmental and human health are pressing and salient issues of our time. Diversity, technology, innovation, and entrepreneurship are poised to help close the gap on equity, quality of care, and the future of biomedical research, climate science and medical care in the United States and beyond. People from all backgrounds, from gender, sexuality, race, class, religion, and more are equipped to solve problems and collaborate for a more just and healthy future. 

Latine/a/o people are underrepresented in the academy, in venture capital, in clinical trials, but their contributions to business and society are important to highlight. According to Stanford’s State of Latino Entrepreneurship 2022, “the U.S. is home to more than 62.5 million Latinos […] With an economic output of $2.8 trillion and nearly 5 million businesses across the country generating more than $800 billion in annual revenue.” Also, according to Stanford, “ Latino-owned businesses seeking loans from national banks have stronger business metrics than White-owned businesses, yet have lower approval rates for loans above $50,000.” Therefore, it can be theorized and supported that, Latine/a/o Entrepreneurship can be transformative for many sectors including medicine and environmental science. Further, more needs to be done systemically and individually to level the playing field and support Latine/a/o entrepreneurs and businesses to address environmental and human health, especially for challenges close to the community such as aging, cancer, and food insecurity. 

Tessa Pijnaker, University of Birmingham

From ‘sustainable developers’ to new gatekeepers: race-making as extraversion among technology hub and incubator managers in Accra, Ghana.

Since the 2010s, the celebration of digitalization and entrepreneurship as the new way to develop Africa, has gone hand-in-hand with the expansion of technology hubs and incubators across the continent. In 2014, managers of technology hubs and incubators in Accra, Ghana, imagined that their institutions would produce ‘sustainable development’. By offering technology entrepreneurs training, networks and resources, they imagined that their technology start-ups would rapidly grow.

Managers aimed to extract value from this growth in the form of rent and profiting from holding start-up shares. They imagined the revenue thus created would be enough to fund their institutions, making them ‘sustainable’. Yet, for various reasons, this future did not materialize.

This paper explores how hub and incubator managers, in response to ‘sustainable development’ not materializing, engaged in a racial economy of extraversion. It is based on fieldnotes, interviews and photographs collected during twelve months of ethnographic fieldwork conducted in 2014-2015 and 2018-2019 in four tech hubs and incubators in Accra. I show that hub and incubator managers, through racialized self-fashioning and entrepreneur and hub/incubator design, tried to position themselves as new gatekeepers: by positioning themselves as reducers of an imagined African difference (Mudimbe 1994), and only making certain digital African ‘realities’ visible for foreign approval (Cooper 2019; Bayart and Ellis 2000), they intended to acquire resources from foreign NGOs, businesses and government organisations. Some managers claimed this strategy helped them ‘shift the balance of power (…) in how aid works away from the Ghanaian government’, as it allowed them to interact with foreign governments directly. Others felt they were stuck in political and economic relationships with European and American funders that were designed to keep the ‘ecosystem’ ‘dependent’, ‘unsustainable’ and racialized. All of them used various strategies to improve their situation.

At the same time, technology entrepreneurs accused hubs and incubators of using their position to increase difference within the ‘ecosystem’, by allocating most funding to their own efforts to ‘develop’ ‘entrepreneurs’, instead of directly to the people they were supposed to ‘develop’. By looking beyond the hype about digitalization and entrepreneurship in Africa, this ethnographic study of race-making as extraversion and strategies of subversion explores how digital ‘development’ institutions both reshape, reproduce and challenge older racial and socio-economic inequalities on the African continent.  Discussing the transformation and reproduction of older inequalities, allows us to explore what is actually necessary to make technology. 

Thema Monroe-White, Berry College and Ebony Mcgee, Vanderbilt University 

Racial Justice as “Social”: Evidence from Black, Indigenous and Latino STEM Founders 

Introduction: In the U.S., entrepreneurship continues to gain attention as a tool to foster economic,  political, business, equity-centric, and social development for racially marginalized people. However,  unlike conventional profit-maximizing firms, social enterprises are founded by individuals with equity minded, racially conscious principles. Despite overwhelming evidence to suggest linkages between social  enterprise and racial/social justice orientation of racially minoritized founders, there remains a dearth of  scholarship at this intersection. The overarching framing for this study adopts both critical perspectives in  race/ethnicity in science and technology, engineering, and mathematics (STEM) and entrepreneurship. By  critical, we mean a commitment to critique for advancing the unique principles of entrepreneurship  research as pertains to minoritized groups. These theoretical perspectives are important because they help  to reveal the racialized experiences, discrimination, and other forms of bias in STEM entrepreneurship  and the responses of racially minoritized entrepreneurs. In doing so, we advance, as well as critique, the  current STEM entrepreneurial landscape that is mostly White and male, by introducing Black, Indigenous  and Latino perspectives into the entrepreneurship lexicon.  

Theoretical Framing: The social entrepreneurship literature does note a codependence between an  entrepreneur’s conviction towards social justice and their principled concern or compassion for those who  suffer from the results of social injustice (Novicevic et al., 2020, p. 38). That said, the theoretical and  empirical social enterprise literature on minoritized founders and/or race-based social justice seeking is surprisingly limited. Compared to business owners of other races and ethnicities, African Americans are  more likely to found start-ups; more optimistic about entrepreneurship; motivated by giving back to their  communities; while seeking financial security and work autonomy promised via business ownership (Liu,  2012). More recently, research has demonstrated that URMs in engineering and computer science are also  unique in their desire to apply their skills to address racial equity concerns (McGee & Bentley, 2017;  Naphan-Kingery, et al, 2019). The concept of equity ethic (defined as a “principled concern for social  justice and for the well-being of people who are suffering from various inequities,” (McGee & Bentley,  2017, p. 6), reflects underrepresented and minoritized (URM) Science, Technology, Engineering and  Mathematics (STEM) student and alumni racialized identities and manifests as intentions to use their  scientific and technical skills to address racial equity concerns (McGee & Bentley, 2017; Naphan Kingery, et al., 2019). Thus, minoritized founders may be motivated by racial justice (defined here as the dual focus on social justice and racial activism) and equity ethic motivations. Subsequently, racially  minoritized founders may be less likely to gravitate towards profit maximizing entrepreneurship due to  plausible misalignment with their intrinsic social change, and racial justice orientations. It is against this  empirical backdrop that we conducted our analysis which was driven by the following overarching  research question: What are the differences in psychosocial factors (i.e., attitudes, motivations) and/or  business intentions and outcomes (i.e., products/services, social value orientation) between URM and  nonURM founders?