By: Brandon Garner
In the world of entrepreneurship, the ability to secure funding is pivotal to having a successful startup phase. Obtaining funding can be done in many different ways, but arguably the most common way to obtain funding particularly during the startup phase of a business is through Venture Capital.
The concept of Venture Capital(VC) is, at its core, when a business seeks an investment in their company, during the startup phase in exchange for equity or stock in the company(think Shark-Tank). While risky, Venture Capital is beneficial for businesses that can’t easily access loans from banks or enter into capital markets directly. For many entrepreneurs, VC serves as a critical source of funding, but for the Black entrepreneur who already faces various challenges in the startup phase, securing VC is extremely difficult because of implicit bias in investment decisions. But what exactly is implicit bias?
Implicit Bias During the Pitch Phase
Implicit bias can be defined as a form of bias that occurs automatically and unintentionally, that nevertheless effects judgments, decisions, and behaviors. Due to its “under the radar” nature, implicit bias easily sneaks its way into society through microaggressions, seemingly normal yet veiled instances of racism that occur every day.
Unfortunately, microaggressions and implicit bias are extremely prevalent challenges faced by the black Entrepreneur in obtaining VC, particularly during the “pitch phase.” In July 2022, People Of Color In Tech, interviewed one first-time Black entrepreneur who recalled her experience with a white investor, stating he suggested she “try not to use the word minority, and instead use ‘underprivileged’ or ‘underserved,’ because if you say minority, investors will make certain assumptions.” In a separate Seattle Times article, one Black tech startup founder said a Venture Capitalist had asked them to “tone down the Black in the business.”
Impact of Implicit Bias by the Numbers
In some cases, Black entrepreneurs have become so desperate for funding that they’ve resorted to bringing along white friends to pitch meetings in order to make the investor more comfortable, even if the friend has no affiliation with the company. Sadly, even this trend does not eliminate the fact that Black entrepreneurs face almost insurmountable pressure to obtain VC in the face of implicit bias.
In 2022, out of 215.9 billion dollars in VC allocated in the U.S., Black founders raised an estimated 2.254 billion, a disgraceful 1% of funding. Additionally over the past 5 years, Black entrepreneurs have raised just 1/3 as much VC as their white counterparts have raised.
Given this blatant racial discrimination, one would believe that Black entrepreneurs would seek legal justice through the court system to correct this horrible wrong, but Venture Capitalists (who are overwhelmingly white males), are unfortunately not subject to any specific laws regarding discrimination. In fact under current legislation, Black entrepreneurs can’t file discrimination lawsuits without having concrete evidence that they were racially discriminated against.
How Did We Get Here?
This extreme burden of proof on the plaintiff stems from the 2020 decision handed down by a 9-0 majority in the Supreme Court case Comcast Corp. v. National Association of African American-Owned Media. Without getting too legalistic, here is a brief summary: In 2016, Entertainment Studios founder Byron Allen filed a suit against Comcast Corp alleging that Comcast had racially discriminated against him in refusing to carry his network channels. Allen sued under §1981 of the Civil Rights Act of 1866, which prohibits discrimination on the basis of race, color, and ethnicity when making and enforcing contracts. In siding with Comcast, the Supreme Court decided that because Allen could not concretely prove there was racial bias in Comcast’s decision to not carry his channels, he was not entitled to protection under §1981.
According to Erwin Chemerinsky, a lawyer for the National Association of African American-Owned Media, the ruling leaves far too many loopholes for Venture Capitalists, and hardly any legal protection against discrimination. In imposing a higher burden of proof, the Supreme Court has largely ignored the idea that racial conduct is a result of implicit bias rather than outright racial conduct. In fact, the Supreme Court decision has made it clear to entrepreneurs alleging racial discrimination that without a “smoking gun” of concrete evidence of racial discrimination their claim will not be supported in court. Without an improbable statement from an investor stating that “I discriminated against you and I’m not investing with you because of your race,” it’s almost impossible for a Black entrepreneur to seek justice for discrimination in courts.
Solutions Looking Forward
After Allen, is there any way to tackle implicit bias in VC? Perhaps the answer lies in increasing Black representation at the senior levels of investment firms. In a 2018 survey of the top 102 Venture Capital firms, out of 713 senior-level executives, only 7 were Black men, and 0 were Black women. Increased Black representation in investment decisions would make a major impact; it would lead to more Black entrepreneurs finding funding opportunities with those investors who look like them.
One final solution would be more challenges to the Supreme Court’s ruling in Allen, hopefully leading to a legislative overhaul that will give more protection to Black entrepreneurs trying to obtain VC. Still, two things are clear: a strong and impactful change must be made if Black entrepreneurs are to gain equality in obtaining Venture Capital and, by all accounts, this change is long overdue.
This post has been reproduced and updated with the author’s permission. It was originally authored on February 3, 2023 and can be found here.
Sources:
https://bleumag.com/2020/07/27/venture-capitalists-implicit-biases-cannot-be-challenged-in-court/
https://diversity.nih.gov/sociocultural-factors/implicit-bias
https://www.svb.com/startup-insights/vc-relations/what-is-venture-capital
https://www.washingtonpost.com/technology/2020/06/10/racial-gap-vc-firms/
For many nascent entrepreneurs caught up in the many layers of starting their business, building an intellectual property portfolio is not at the top of their priority list. In light of fundraising capital, navigating the real estate market for the ideal property, and building initial inventory, thinking about intellectual property filings might stay on the back burner. However common this scenario may be, it is a mistake—one of the most critical elements of any business is its name (and subsequent branding!), and ensuring that your preferred name is both available and enforceable should be a main prerogative.
When you think about the marketplace giants that we interact with every day—like Apple, Amazon, and Google—you will notice that their names are concise, unique, and recognizable. Entrepreneurs brainstorming a name for their product or business should try to emulate this blueprint, and not just because it is a smart marketing strategy, but because these names are likely to be more easily trademarked.
These nuances are important to keep in mind as an entrepreneur selecting a name for their new business. If you would like to explore what options might be taken already but have not yet retained an attorney to assist with your start-up, you can go to the USPTO website and use their 
To properly address hazards and risks in the workplace, they must first be correctly identified. The goal of risk identification is to identify what, where, when, why, and how a situation can hinder a company’s ability to function. For example, a business located near the Gulf of Mexico would list “the potential for hurricanes” as an occurrence that could interfere with normal business operations. This will enable you to minimize harmful risks before they arise.
For example, risks may:
Jaiden Moore, at the time of this post, is a second-year law student at Penn State Dickinson Law. He has a B.A. in Liberal Studies from North Carolina A&T State University, and is interested in civil litigation. Jaiden is Treasurer of the International law society and is a member of the Black Law Students Association as well as the Business Law Society at Dickinson Law.
In January 2023, Meta abandoned its San Francisco office, an office space with 400,000 square feet in downtown San Francisco.1 Meta had rented out the space five years earlier to make space for the employees behind Instagram. The lease termination was eight years early, as Meta’s lease was set to expire in March 2031.
Your commercial lease is likely to have a clause that addresses your surrender obligations. In general, the tenant must return the commercial property, such as an office space, to a broom-clean state. A broom-clean state means all of the tenant’s personal property is removed from the premises. Alternatively, some commercial leases will allow the tenant to return the space as-is. An as-is return is favorable for the departing tenant because it allows the tenant to leave the property in its current condition and with any existing faults. If your commercial lease already demands a broom-clean return, it might be worthwhile to negotiate with the landlord for an as-is return.
Instead, the amount and the return of the security deposit are up for negotiations in Pennsylvania. Thus, landlords and tenants in Pennsylvania must be intentional when reserving their rights to the security deposit when they enter a commercial lease. Lack of a security deposit provision in the commercial lease may limit a tenant’s rights if she decides to terminate early.
Small business and start-up companies incur a variety of costs to operate their businesses. However, no matter the size of a business, energy consumption ranks among the top five business expenses. The primary use of energy includes operating vehicles, heating and cooling, and operating equipment. The ability to cut down on fixed costs such as utilities may significantly improve cash flow. According to the U.S. Energy Information Administration (EIA), the average monthly utility bill for commercial buildings is $650 per month with the northeast region averaging a higher cost of $727 per month. The cost of electricity and natural gas is only expected to rise in the coming years and remain volatile. Whether your company has been in operation for years or is beginning to get off the ground, managing and saving on energy costs is not only beneficial for the business but also for the environment. With the recent enactment of the Inflation Reduction Act (IRA), small businesses are incentivized to deploy clean energy technology to reap significant cost-saving benefits.
Under the IRA, the ITC enables business owners to receive a one-time 30% tax credit for PV system installation. In contrast, the solar PTC can be claimed every year over the 10-year credit period at the current rate of 2.6 cents/kWh for commercial projects (adjusted for inflation). The size of the system must be under 1 megawatt (MW) to claim an ITC or PTC, and project owners cannot claim both credits for the same property. Projects may qualify for additional bonus credits of 10% if located in a low-income area.
For Darrick Rizzo, everything is an opportunity. He has turned pain into purpose and no’s into yes’s. Rizzo is an entrepreneur, motivational speaker, and author from Pennsylvania. He owns his own video production company and is the executive producer for Master P and Snoop Dogg. However, Rizzo’s success was not a result of luck. Rizzo saw a plan, he stuck to that plan, and his plan expanded.
Rizzo was meeting people constantly as a result of his video business, and his great personality scored him another business. One day, a man asked Rizzo to teach his team defense since he shut Kobe down. Rizzo thought that this was another avenue, which he was going to focus on now. He started “D’em Up,” another LLC, in which he would go to schools all over the country and host basketball clinics focused strictly on defense. Rizzo’s training videos eventually ended up on Championship Productions, an internationally recognized industry leader in instructional videos featuring top coaches and athletes. However, Rizzo received a call one day from Kobe’s lawyer because Kobe’s father said that no one ever shut Kobe down, and Rizzo’s video was only an edited highlight. Rizzo was determined to prove Kobe’s father wrong. He found the box score and called Kobe’s lawyer apologizing. Rizzo didn’t hold Kobe to eight points; he held him to seven.
Rizzo embodies strength and persistence. Since he was a young boy, he turned negatives into positives; that’s just who he is. After experiencing the death of his sister and other loved ones, Rizzo started writing music and developed a CD. His cousin, a consultant and mediator in Los Angeles, told Rizzo to come out for an event to show his CD to celebrities. According to Rizzo, “When someone gives you an opportunity in life, you have to run with it.” Or, in basketball terms, “If someone throws you an alley oop, you dunk it.” Rizzo was not scared. He confidently approached Snoop Dogg at this event telling him about his CD, but Snoop Dogg said no. Rizzo was not offended; he did not care. Instead, he replied, “One day I am going to work with you Snoop.” Rizzo’s statement proved true 25 years later.
According to Rizzo, “You are who you surround yourself with, so if you surround yourself with entrepreneurs, then you are going to come up with ideas. If you surround yourself with someone who is not doing anything, then you are going to be stuck.”
Sarah Donley, at the time of this post, is a 3L at Penn State Dickinson Law. She has a BBA in Economics & Finance with minors in Entrepreneurship and Psychology from Shenandoah University. Sarah currently serves as an Articles Editor on the Dickinson Law Review. In May 2023, Sarah will be receiving her J.D. from Penn State Dickinson Law and her LL.M. in European Business Law from Radboud University.
When people think of Delaware … let’s face it, people don’t think of Delaware. But it is the business world’s best-kept secret. About 65% of Fortune 500 companies are incorporated in Delaware (e.g., Amazon, Google, Tesla, etc.). This is no mere fluke. The state boasts a business-friendly climate and extensive body of corporate law. And here’s the kicker: no corporate income tax. Setting up a company in Delaware is so streamlined, that it is home to more than 1.8 million companies—more than the number of Delaware residents! Which is surprising, considering the state has no sales tax, investment income taxes, inheritance taxes, or personal property taxes. A nondescript office building that spans less than a city block in Wilmington, Delaware, is the official incorporation address of more than 285,000 global companies! Notably, you do not have to live in Delaware to incorporate a company in Delaware. Also, a Delaware physical address is not required as long as you retain a Delaware registered agent for your Delaware corporation or LLC.
The predictability of the Delaware court system is a boon for companies—business issues are predictable because of the Delaware Court of Chancery. This forum is the nation’s preeminent corporate court. It is responsible for developing the case law on corporate matters because its judges are experts in corporate law (no juries in this court!). The Court of Chancery handles matters in equity, and focuses on corporate issues, trusts, estates, other fiduciary matters, disputes involving the purchase of land and questions of title to real estate, as well as commercial and contractual matters. The average civil lawsuit can span several years, but with judges who specialize in corporate law and the lack of juries, along with primacy of corporate-related cases, means that similar cases can be decided 
Delaware is considered a tax haven because of its unparalleled tax savings. If your company is incorporated in Delaware, but you conduct business out of state, there is no state income tax. There is also no inheritance tax on stock held by non-Delaware residents. Additionally, there is no state sales tax on intangible personal property (like royalty payments). Also, non-residents who own shares of stock in Delaware corporations are not subject to Delaware taxes. Some companies, however, avoid their in-state income tax by establishing subsidiary or shell companies that hold various intangible assets but do not directly run business operations.
Did you know that you can conduct same-day business filings in Delaware? The incorporation process can take less than an hour! You can find filing forms and fees 
Size matters. Small businesses do not get significant tax savings—you do not get to avoid taxes outright. Delaware does not tax companies incorporated in the state that do not do business there, but you are still responsible for taxes imposed by your home state. Your company will also have to pay the Delaware franchise tax on its shares’ value, but this could be minimal compared to the income taxes your home state may charge. Albeit minimal for small businesses, franchise taxes are subject to increases based on the number of shares and improved value. You may also need to pay a franchise tax in your home state. If you plan on conducting business in another state, you still need to satisfy your state’s filing and licensing requirements for conducting business there (Delaware registered agent 
In sum, the key advantages to incorporating in Delaware are tax benefits, privacy, expediency, simplified structure, and predictability in corporate law. Delaware offers convenience to companies who incorporate within the state, but said benefits are primarily geared towards large corporations. If you have a small business, you should carefully weigh the additional costs involved against the benefits of incorporating in Delaware. But if you structure your company properly, you will reap the privileges of being a Delaware corporation.