The rising opportunity to serve diverse tech founders

By Dana L. Wilson

The ability to start an online business is becoming more common than ever before, due to the rise of no-code or low-coding boot camps that teach people how to use online tools to get their idea off the ground faster. As a result, individuals from underrepresented communities have more opportunities to create scalable companies that can receive investor backing. These individuals generate wealth, which presents opportunities for financial advisors. Financial advisors need to pay more attention to these diverse founders—especially if they want to stay relevant and connect with their current clients' children.  

Traditional wealth management service models won't necessarily resonate with this wave of potential clients. This article covers the rise of diverse tech founders, their needs, and how you can connect with them. 

The founders 

It used to be that when you had a business idea, especially an idea that would require a lot of technology, you had to wait until you found a tech-savvy co-founder. Sometimes that took months—or even years—to create a "minimum viable product" to start testing. But because of low- or no-code technology, the timing has changed. Low- or no-code technology has made it easy to go online and begin building a viable business using different existing resources. For example, you can create an app using only Google tools, without partnering with external tech vendors. And this transformation is only at its beginning.

Because of low- and no-code technology, I didn't have to wait until I found a partner who was well-versed in technology. A few years ago, I launched Changing How Individuals Prosper, a technology platform that connects Black and Latinx consumers with Black and Latinx financial professionals. I initially used a web-based hosting platform to begin the business, and later added more back-end technology and algorithms. I also launched a digital magazine called The Brief. After finding editor and co-founder Ana Limon to help bring my vision to life, we didn't wait for somebody to build us a digital platform to deliver the magazine. Instead, we put it together ourselves using Canva. 

Not every startup becomes a Facebook-like "unicorn" or starts without a meaningful scientific discovery or engineering innovation. However, the opportunity that these tools offer many founders can be life-changing. If the founders are able to pull in thousands of dollars—maybe even a couple of hundred thousand dollars—that's money that goes right into their pockets, with potentially minimal overhead.

Some diverse founders operate on a much bigger scale, raising large amounts of funding for their startups, whether they're raising their first million or going into Series A or Series B funding. For example, Esusu's founders, Samir Goel and Abbey Wemimo, raised over $144 million in January, according to TechCrunch, which also listed six other global Black-led unicorns.¹

What founders need

Successful founders present an opportunity for advisors who can decide what services they provide to clients and how to charge for them. At the onset of a founder’s journey, or even as they begin to hit their stride, they may not seem ideal clients because of their low level of investable assets or their inability to consistently increase their contributions. However, their situations can improve rapidly, especially once their companies receive funding. Still, these entrepreneurs might not be able to wrap their heads around paying a large sum of money for your services. A subscription model for services might appeal to them more. 

Some financial planning firms have recognized this opening. Facet Wealth, a virtual, subscription-based financial planning model, saw its growth double during the pandemic, according to RIA Intel, and it raised $25 million in funding in 2020.² While you can't be Facet Wealth exactly, you can learn from its success. You can start serving founders today in these three ways: 

• Offer subscription-based services. 
• Offer financial coaching for potential clients who aren't ready to leap into an entire financial advisory relationship.
• Reduce minimum investable asset requirements.

Making the connections

To connect with founders, show that you understand their unique needs. Research and understand what it's like to be a founder raising capital. Especially when working with members of diverse communities, make sure you listen and show respect and empathy for their challenges and opportunities. 

If you're looking for more diverse organizations where you can meet more founders, check out the list below and search online to find more. Also, see who is connected to tech founders from diverse backgrounds in your network. Most importantly, get out of your comfort zone. 

• Black Women Talk Tech: This platform connects Black women tech entrepreneurs.
• Blacks In Technology Foundation: This organization promotes collaboration between Black tech founders and others in the tech ecosystem.
• Goodie Nation: "Goodie Nation exists to eliminate the relationship gap that stands in the way of success for too many promising entrepreneurs, especially those who are people of color, women, or aren't located in coastal financial centers." 
• Bleeker: Bleeker is a "Public Benefit Corporation that partners with companies whose leaders are similarly dedicated to putting underrepresented professionals in the driver's seat of their careers, supporting their organizations with coaching and recruiting solutions." 
• The Suites: The group's core membership consists of "inspiring executives and entrepreneurs of color who build incredible businesses and are ready to scale."
   

Don't ignore these potential clients or let others lead you to believe they're not a good fit because they do not yet have enough assets. Establish and nurture these relationships now, so when founders build that wealth, they do it with you. 

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Dana Wilson is the founder and CEO of CHIP (Changing How Individuals Prosper), a B2B financial services marketplace that makes it easy to find Black and Latinx financial professionals.

 
1. Tage Kene-Okafor, “Esusu becomes unicorn with SoftBank Vision Fund 2-led $130M funding,” TechCrunch (Jan. 27, 2022). 
2. Michael Thrasher, “Facet Wealth Doubles Its Growth Rate, Raises $25 Million, and Introduces New Service For Employers,” RIAIntel, (Sept. 29, 2020). 

 

image credit: istock.com/Alvarez