Obama meets with Tony Aguilar of Student Loan Genius, a startup based in Austin, Texas. (AP Photo/Andrew Harnik)
On Wednesday afternoon, a group of two dozen innovators gathered for an unorthodox kind of demo day. Rather than present their companies to an audience of potential investors, they found themselves manning makeshift booths set up beneath ornate White House chandeliers, explaining their products—ranging from lithium batteries to a health-conscious teddy bear named Jerry—to the President of the United States.
The first of its kind, the White House Demo Day was not just a chance for President Obama to play with hi-tech stuffed animals. The administration held the event to call attention to inequalities within the tech sector, while announcing new public and private efforts to level the playing field for women and minorities. According to one study the White House cited, fewer than three percent of venture capital-backed companies have a woman as their CEO, and fewer than one percent have an African-American founder.
Obama with Hannah Chung and Aaron Horowitz, co-founders of Sproutel, a company that makes educational teddy bears. (AP Photo/Andrew Harnik)
“It’s always hard to get in front of the right people,” Obama said in a speech in the East Room to a crowd of about 200. “But sometimes it’s harder if you’re a woman or an underrepresented minority who all too often have to fight just to get a seat at the table.”
In his speech, Obama announced that over 40 venture capital firms had committed to increasing diversity within their investment portfolios and staff. They include Silicon Valley-based firms like Adreessen Horowitz and Kleiner Perkins Caufield Byers, the latter especially notable given the recent high-profile gender discrimination lawsuit from former employee Ellen Pao. Obama also praised companies like Intel and Pinterest, which have recently set public goals to diversify their workforces.
For Demo Day attendees, Obama’s words resonated on a personal level. Many of the women and minorities there have experienced significant challenges—sometimes directly linked to discrimination—while attempting to fund their businesses.
Obama on stage in the East Room with the entrepreneurs who attended Demo Day. (Photo by Mark Wilson/Getty Images)
“I’ve actually had an investor tell me they won’t make an investment in my firm because many aren’t comfortable with investing in women,” said a female entrepreneur who attended Demo Day and wished to remain anonymous to avoid jeopardizing funding opportunities. “I get what I’ve been calling the ‘female discount’ for everything that comes out of my mouth.”
Memphis, Tennessee resident Jerome Hardaway has felt similarly ignored as an African American. The Air Force veteran leads and personally finances a startup nonprofit called FRAGO that trains U.S. military veterans how to program. But he says he’s received little financial or moral support from his community, despite his efforts.
“I’m a combat veteran helping veterans learn web development,” he said. “If I was a Caucasian male, that would be all that is needed to raise serious funding. But as an African-American male, when it comes to donations, I’m told I need to play the game and placate the classic Caucasian male demographic of VC funders.”
In some cases, these experiences have led founders to seek financial networks with which they feel more comfortable dealing. Suma Reddy, co-founder of a friend-to-friend discovery platform named Waddle, says she’s sometimes discouraged when she researches panels or potential accelerator programs for her company.
“I look at who the judges are and who’s making the decisions, and if it’s all white men, that jumps out at me,” she told Yahoo News. “If you’re a man in his 30s who’s had a certain experience, you’re going to connect more with people like you.”
As an alternative, Reddy has searched to find funding via personal relationships and her own social circles. She’s made connections through the New York City branch of the organization Lesbians Who Tech, and with her fellow Wharton University alumni. She’s currently in talks with an interested angel investor who she met through the LGBT community.
Ultimately, it’s these personal connections that Kris Atkins—a longtime entrepreneur from Portland, Oregon who was inspired to bring her daughter to the Demo Day—says make deals happen.
“Mentorship is huge,” Atkins said. “To encourage anyone and everyone to become entrepreneurs is absolutely critical.”