Diversity issues bedevil startup communities across the world, but in Buffalo’s emerging technology ecosystem, there is a sense that now is the time to build solutions into the overall sense of growth.
In the past year and a half, about 55 companies headquartered or with significant presences in the Buffalo region raised about $670 million in growth-stage financing, according to Business First data. About seven of them (12.7%) had Black founders or CEOs.
“We have significant gaps here in offering consistent programming and support for scalable businesses led by underrepresented founders,” Launch NY CEO Marnie LaVigne said. “The numbers will continue to be spotty until there is a determined effort toward systemic change.”
Lavigne’s group, a nonprofit which supports startups through investments and mentorship, is preparing a white paper on this very issue. She said one of the challenges in Buffalo is the distinction between high-growth tech startups and small businesses. The infrastructure is in place to support minorities in the latter, just as there have been major workforce initiatives around manufacturing and the trades.
But she said the process of finding, introducing and ultimately convincing underprivileged communities to participate in high-growth, high-risk tech startups is underdeveloped.
"I feel like we're gaining some traction, but we have to stay at it," she said. "We have to be ready for the long game, and we have to accept that this issue requires more resources."
There are some resources dedicated to entrepreneurs of color who are working on scalable projects. Launch NY’s Founders Go Big initiative launched in 2020 specifically to find, support and ultimately invest in founders from underrepresented communities. Bitwise, itself a startup that seeks to connect underserved neighborhoods to opportunities in tech, announced this year that it would come to Buffalo after receiving backing from a consortium of major corporate, philanthropic and government partners. The EforAll Buffalo chapter, which launched last year, holds a robust set of events and accelerator programs. M&T Bank has partnered with other local organizations to train underrepresented workers for a career in tech.
Business First spoke with three Black or Latino founders of high-growth startups in Buffalo about their experience.
Tye and Courtney Caldwell, founders and CEO/COO, respectively, ShearShare
The annual 43North business competition welcomes a collection of startups to Buffalo each year, giving winners cash investments and other forms of support in the hope that they build their business here.
Over the years, a number of women- and minority-led companies have won. Speaking specifically of Black founders, barbershop software platform Squire has established a significant operations hub here, though founders Songe LaRon and Dave Salvant live elsewhere; electric charging startup SparkCharge maintained its manufacturing operations here, though the company is now headquartered in Massachusetts; and landlord-tenant relationship platform WhoseYourLandlord has maintained strong ties to the city, with founder Ofo Ezeugwu splitting his time between Buffalo and New York City.
At this October’s competition, two Black-led startups from elsewhere became 43North winners.
One of those companies was ShearShare, led by Houston entrepreneurs Tye and Courtney Caldwell. The Caldwells closed a $2.3 million seed round after winning 43North, including contributions from several local investors.
With the cachet of being a 43North winner and an enthusiasm of living in a new place, the couple said their experience in Buffalo has been positive so far.
“Coming to Buffalo, we have focused on being our unique and authentic selves and what led us to gravitate to this area,” said Tye, the company’s CEO. “We realize that we’re going to have to tackle some things that Buffalo hasn’t seen, but this city is pregnant with opportunity, and we want to be part of that growth.”
Notably, the company's team-building strategy goes well beyond established networks and job postings. They met one recent hire, a Black woman named Jasmine Barber-Tepeyecac, at a SUNY Buffalo State career fair. They have reached out to Buffalo Prep about internship opportunities. The Caldwells, who now live in a Seneca One Tower apartment (43North’s incubator is in the same building), walk their dogs in Canalside. They make it a point to stop people of different backgrounds and talk to them about ShearShare in Buffalo.
“We could have easily handed over a couple of job descriptions and asked them to send us whomever, but instead we landed in a community and started seeking out people ourselves,” Courtney said. “We want to make sure that if this company is our legacy, we leave behind something that represents everyone.”
Andy Hakes, founder and CEO, AireXpert
After a three-decade career in the aircraft industry, Andy Hakes sold off his aircraft maintenance services company to pursue a startup.
Hakes, a Black man, has spent several years trying to unlock the potential of AireXpert, a software system that systematizes the maintenance of commercial aircraft.
Hakes has received support along the way, notably from angel investor Jack Greco (who also invested in ShearShare’s recent round). Those supporters have helped the company iron out its issues and start making fast progress this year.
But like the other founders, Hakes said it’s impossible to ignore that he’s mostly surrounded by white men.
“Buffalo absolutely is a microcosm of the venture capital ecosystem as a whole,” he said.
Hakes believes in the concept of progress locally, noting specifically Launch NY’s vocal stance about attracting more seed funding to minority entrepreneurs.
When asked if being Black has hindered his ambitious goals, Hakes said it hasn’t helped. It’s been a series of tiny cuts over the years that are often hard to pinpoint or specify.
“I believe that Buffalo is trending in the right direction, but there is a ways to go,” he said. “I’m absolutely delighted when I walk into a room or introduced to other founders who look like me, or are from any other group that is typically underrepresented. When that happens, it’s a sign that things are improving and a reminder of the work we have to do.”
David Gonzalez, founder and COO, Arbol
David Gonzalez and his co-founder, Favio Osorio, are first-generation Latino college graduates who left good jobs to found a scalable startup in Buffalo.
Arbol is their chance to build a big company that makes a positive impact on the world by helping low-income college students succeed.
In Buffalo – anywhere, really – that makes them their own kind of unicorn.
Gonzalez said there’s no ignoring the fact that very few people in Buffalo’s startup scene look like him and Osorio.
That is its own kind of barrier.
“The lingo, the way people talk and the way they dress, it can unintentionally push folks away,” he said. “It can feel like a gated community.”
Gonzalez left a rising career at M&T Bank to join startup Kangarootime while he plotted his own entrepreneurial journey. He said that was the best decision he ever made.
But he’s had to work hard to make his family understand. His grandfather left Puerto Rico for Buffalo, operating a bodega and working at Bethlehem Steel. His father spent a career at the General Motors factories in Tonawanda and Lockport.
“When you come from a community like mine, and you grow up in our households, you are encouraged to pursue security and income because that’s what is top of mind,” he said. “I don’t have established wealth, and I’ve walked away from some big opportunities to take a risk. That’s something I contend with on a daily basis.”
Arbol’s in the early innings and has some important regional backers, including Launch NY and the University at Buffalo’s Cultivator accelerator program. Gonzalez said the company is making progress after a significant pivot a few months ago.
Gonzalez said he’s grateful for the people in Buffalo who welcomed him into its circles. He and Osorio are working on hiring a diverse base of employees.
But if someone asks him about the issues, he’s going to answer.
“There’s a bias that people aren’t conscious of, and it goes back to hiring within your networks,” he said. “Higher standards are imposed on people outside of your network because you don't know them. How that works is that if you don’t know someone of color, then you raise the bar for them to join your company. It’s not something you see in job postings.”
