The funding gap between white-founded and Black-founded startups in the United States is well-documented across industries. In beauty specifically, the disparity is visible in the stories of the brands that did succeed despite it: Topicals raised $10 million in a Series A round and was notable precisely because it was exceptional -- a Black-founded beauty brand raising eight figures in venture capital was news, not a routine outcome.
The structural problem is not unique to beauty. Venture capital firms are predominantly white and male, and research consistently shows that investors fund founders who look like them, who went to the same schools, and who move in the same networks. Black founders are navigating a system in which those network effects systematically exclude them, and beauty -- which is not a traditional venture category to begin with -- compounds the problem.
The brands that have broken through have often done so by building substantial revenue and community traction before seeking institutional capital -- arriving at investor conversations not as an idea but as a proven business that is growing despite the funding gap, not because of access to it. Shontay Lundy built Black Girl Sunscreen into a mass retail fixture. Beatrice Dixon built The Honey Pot to a $380 million acquisition. Both did it on less external capital than white-founded brands of comparable scale would typically require.
“The market has been there. The capital has not followed it.”
The venture community has begun to shift, slowly. Dedicated funds for Black founders -- the Fearless Fund, Harlem Capital, Backstage Capital -- have emerged to fill the gap that mainstream VC has left. The New Voices Fund, which Richelieu Dennis built with proceeds from the SheaMoisture-Unilever deal, has deployed capital toward businesses owned by women of color. These are partial corrections to a structural problem, and they matter.
The broader beauty industry follows the capital. When Black-founded brands are underfunded, they grow more slowly, reach fewer consumers, and have less leverage in retail negotiations. The funding gap is not just a financial abstraction -- it shapes which products reach shelves, which brands build lasting businesses, and who benefits from a market that Black consumers have sustained for generations.
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