“I do not think Silicon Valley is racist,” says entrepreneur Stephan Adams.
This is a head-scratching statement for anyone who watched Sunday’s CNN program " Black in America," which broadcast that less than one percent of all technology startups are launched by African Americans.
But Adams (pictured) is adamant. As an African American himself, he raised $12 million for a startup back in 1999. Today, he is a general partner at Valencia Ventures, an emerging fund focused on minority entrepreneurs based in Oakland, Calif. He was interviewed for the CNN special, but his parts were cut during the editing process, he says.
Adams says it is the U.S. education system that is to blame for the lack of African American-led startups.
“Everyone in Silicon Valley is highly educated. It is the repression of education that has always been the downfall of the African-American community; we are dealing with generations of people who don’t have access to education—they don’t have a community to call upon,” he says.
Silicon Valley is a haven for math and science buffs and one needs those skills to develop technology programs, Adams notes. The government can help in this effort by adding more dollars to communities in need of education funding, but this has yet to happen in many places.
“If you look at the policy fights that go on around education, a lot of them are about denying resources to communities that need them most—how can product engineers come out of schools that don’t teach those topics?” he asks.
Adams says he was fortunate to come from a supportive background. His mother, a schoolteacher, graduated from college and expected Adams to do the same. After high school, he went off to the University of California, Berkeley, where he became entrenched in tech culture.
“When I went to college, my peer network was not all black—the majority of it was white; it was around those networks that I understood how to gain access into the technology sector,” he says.
So does this mean that all African-American entrepreneurs need is to befriend white people to be successful?
"No," says Adams. "I just mean that you are not going to find your network by just talking with black people; you have to have a multicultural network—it broadens the people you can talk to."
Is Silicon Valley a meritocracy?
According to Dictionary.com, a meritocracy is "an elite group whose progress is based on ability and talent rather than on class privilege or wealth." H. Irving Grousbeck, director of the Center for Entrepreneurial Studies at the Stanford Graduate School of Business, is quick to point out that Silicon Valley is, in fact, a meritocracy.
“It absolutely is a meritocracy out here; there are inroads being made by Asians and Asian Americans,” he says.
What about African Americans?
“I’m seeing a few, but not as many,” says Grousbeck. “It mystifies me as to why there are not more people of color that are technology entrepreneurs.”
Adams says the idea that Silicon Valley is a meritocracy is “just crazy.”
“You have to know people—not only funding sources, but engineers, finance people, marketing people,” he says. “It has nothing to do with your merit; it has everything to do with who you’ve networked with.”
How to break in to Silicon Valley
While persons with a highbrow educational pedigree may have an easier time getting in front of investors, those without degrees from Harvard and Berkeley still have a shot.
First, they should start networking their butts off. According to Adams, there are several organizations to join (Keiretsu Forum, is one example) and entrepreneurs should go to any technology meet-up they can.
Second, make sure to present a phenomenal product.
“This is something the CNN special did not highlight,” Adams says. “Funding is not the biggest thing you need. You need to have a good product because money finds innovation—especially if you are networking.”
Third, approach angel investors before venture capitalists. Adams suggests starting with Band of Angels, a seed funding organization that can serve as an excellent forum for entrepreneurs.
Will Silicon Valley become more diverse in the future?
CNN’s "Black in America" highlighted NewME Accelerator, an incubator for minority-led technology startups. It is the hope that companies such as NewME will help infuse Silicon Valley with an influx of African-American entrepreneurs, but Adams is not positive when looking at the future of the region.
He says things will remain about the same, the only uptick in African-American entrepreneurs being, what he calls, "lifestyle companies."
“I think the number of minorities launching iPod and Android apps will increase, mainly because there is a low bar to entry,” he says.
And why won’t there be more minority-led startups in Silicon Valley?
“I really think the funding bar is going to become harder for both minorities and white people,” he says. “The funds are getting bigger, but they are chasing fewer deals.”