“Black hair, black future” – Anahita Thoms, a partner at law firm Baker McKenzie, gets unusually personal in a LinkedIn post in early May. She says that this saying came from her brother’s school, a humanistic grammar school in Düsseldorf, and that it still preoccupies her today.
Thoms himself, the daughter of Persian immigrants who has had a meteoric career in the legal world, reports discrimination. In an exam she was asked: “Is your father a carpet seller?”
Thom’s post is getting a lot of traction online and encouraging other users to share their stories. The lawyer, who is also on the advisory board of the “Startup Teens” association, raises a question with her contribution: To what extent is the business world still shaped by prejudices?
The start-up association’s “Migrant Founders Monitor” now sheds a statistical light on the experiences of people with a migration background who want to venture into this world and have founded a company. The figures show that a lack of access to capital and networks, but also racist experiences are still widespread among founders.
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The study is based on a special evaluation by the “German Startup Monitor”, which the start-up association publishes every year. Among the more than 2000 participants in the survey, 394 are start-ups whose founders have a migration background.
Of these, 59 percent were born abroad themselves, 41 percent are descended from parents who immigrated to Germany. However, the evaluations of the Migrant Founders Monitor relate primarily to migrants of the so-called “first generation”.
Europe is a talent magnet
Most of the respondents come from Eastern Europe (23 percent), followed by Southern Asia (14 percent) and Western Europe (12 percent). Tamaz Georgadze, founder and CEO of fintech Raisin, who was born in the Soviet Union, reports that Europe has an “incredible attraction” for open borders and freedom.
But in addition to the advantages of the European and German economic area, the migrant founders also encounter many obstacles. Access to capital, for example, is demonstrably more difficult for those who were not born in Germany, as the evaluation by the start-up association shows. Private sources of finance such as venture capital or individual “business angels” are less accessible to migrant start-ups, but there is still a large deficit in state funding.
This is probably also due to the fact that the bureaucratic hurdles before and after founding a company are so high that they often pose a major obstacle, especially for foreign founders.
>> Also read here: How Germany is wasting the tech potential of migrant children
In addition to complex bureaucratic processes that are difficult to understand, the language barrier in contact with public authorities is also a problem, according to the Migrant Founders Monitor. In most cases, the lingua franca is German – a problem for people with a different mother tongue.
“Above all, language barriers in bureaucratic tasks often lead to misunderstandings with serious consequences,” reports Ana Álvarez, founder of the start-up Migrapreneur.
However, the biggest problem for migrant start-ups is the lack of networks in the business world. Gülsah Wilke, granddaughter of Turkish immigrants and Chief Operating Officer at the health start-up Ada Health, calls the lack of contacts and role models “a key challenge”. There is often a lack of orientation to find one’s way in the German business world.
Respondents say Germany has a racism problem
Therefore, together with other migrant children, she founded a network called “two hearts”, which provides mentors to young people with an immigrant background who want to get started in the tech world.
>> Also read here: Labor shortages are getting worse – are immigration and better working conditions the solution?
Another big problem seems to be racist prejudices among authorities, banks, but also investors. Similar to Anahita Thoms, for whom her father’s profession was inferred from the color of her hair, respondents to the Migrant Founders Monitor also report racist experiences.
Results that can also be found in the Federal Government’s new Racism Monitor. According to the current survey, 90 percent of those surveyed believe that Germany has a racism problem. Almost every fifth person (22 percent) states that they have been affected by racism themselves.
There is actually great potential for start-ups in immigration, as a look at the USA shows. More than half of the start-ups valued at over one billion dollars there in 2018 were founded by people with a migration background.
Federal Education Minister Bettina Stark-Watzinger (FDP) also sees this for Germany: “Founders with a migrant background are an essential part of the German start-up ecosystem,” writes the minister in the Migrant Founders Monitor. The minister therefore promises “excellent educational opportunities and networking opportunities” in order to be able to fully exploit the potential in the future.
More: Using the tech potential of migrants: These are the start-ups from The Shift