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Venture capitalists love to talk about their ability to spot patterns. They claim that by recognizing the traits of past successes, they can identify the next great startup. But this belief in “pattern matching” is more flawed than many VCs would like to admit.

The Myth of VC Pattern Recognition

Venture capitalists invest in a relatively small number of companies across their careers—far too few to develop truly reliable data-driven insights. Instead, many rely on anecdotal experience, assuming that because something worked in the past, it will work again.

But there’s a deeper issue at play: the investments VCs choose don’t just predict success—they help create it. When a VC firm backs a startup, that company gains more than Money. It receives access to influential networks, media attention, and a higher likelihood of raising future rounds. VCs also connect founders to investment banks for exits through IPOs or acquisitions.

In other words, venture-backed companies succeed in part because of the funding itself, not simply because of the founders’ foreseen talent or business model. Meanwhile, startups that don’t get VC funding struggle to compete—even if they have superior products, teams, or Technology.

Bias in Pattern Matching

This brings us to an uncomfortable truth: pattern recognition often reinforces bias.

If a VC’s early investments were in white-male-led startups, those successes would become part of the pattern they subconsciously look for in future deals. The result? Women, Black, and Latinx founders are frequently excluded—not because they lack potential but because they don’t fit the established mold.

The numbers confirm this:

• Women-founded companies receive less than 3% of VC funding.

• Black and Latinx founders receive even less.

The industry’s approach to pattern recognition doesn’t just fail to produce better results—it actively perpetuates inequality.

Some VCs have recognized the problems and are taking steps to avoid an overreliance on the gut instinct they label “pattern matching.”

The Same Risks Exist in Impact Crowdfunding

As impact Crowdfunding investors, we must recognize that we’re not immune to these biases. Like VCs, we make a limited number of investments, which means we can’t reliably identify true patterns. Yet, our brains still try to find them, leading us to favor founders who remind us of past successes—whether we realize it or not.

If we don’t actively check our biases, we risk reinforcing the same disparities that exist in venture capital.

Investing With Intention

How do we avoid falling into the same trap? By being deliberate.

• We must still perform due diligence—Investing without research is not the answer.

• But we should also actively counteract pattern bias by intentionally considering opportunities led by women, Black, and other underrepresented founders.

This month, the American Independent Business Alliance (AMIBA) is spotlighting Black Founders, making it easier for investors to support them. Each Monday, we’ll highlight new offerings featuring Black Founders to help you diversify your impact investing portfolio.

But our efforts shouldn’t end when the month does. Each of us can set personal goals to invest in diverse entrepreneurs year-round, helping to build a more equitable funding ecosystem—one that rewards potential, not just familiarity.

By doing so, we can break free from flawed pattern recognition and create a better way to invest.

Support Our Sponsors

Our generous sponsors make our work possible, serving impact investors, social entrepreneurs, community builders and diverse founders. Today’s advertisers include FundingHope, the American Independent Business Alliance (AMIBA), Solvari and Arcade Therapeutics. Learn more about advertising with us here.

Max-Impact Members

The following Max-Impact Members provide valuable financial support:

Carol Fineagan, Independent Consultant | Lory Moore, Lory Moore Law | Marcia Brinton, High Desert Gear | Paul Lovejoy, Stakeholder Enterprise | Pearl Wright, Global Changemaker | Ralf Mandt, Next Pitch | Scott Thorpe, Philanthropist | Add Your Name Here

Upcoming SuperCrowd Event Calendar

If a location is not noted, the events below are virtual.

• Impact Cherub Club Meeting hosted by The Super Crowd, Inc., a public benefit corporation, on February 18, 2024, at 1:00 PM Eastern. Each month, the Club meets to review new offerings for investment consideration and to conduct due diligence on previously screened deals. To join the Impact Cherub Club, become an Impact Member of the SuperCrowd.

• SuperCrowdHour, February 19, 2025, at 1:00 PM Eastern. Devin Thorpe will be leading a session on “Calculating Your Funding Needs,” providing essential guidance for entrepreneurs and impact-driven businesses to determine the right amount to raise for sustainable Growth. Whether you’re preparing for your first crowdfunding campaign or planning to scale, this is a must-attend! Don’t miss it!

• Superpowers for Good Live Pitch for Q1-25, March 12, 2025 at 8:00 PM ET. The application window for the 1st quarter live pitch event is now open. Apply here.

• SuperCrowdLA: we’re going to be live in Santa Monica, California, May 1-3. Plan to join us for a major, in-person event focused on scaling impact. Sponsored by Digital Niche Agency, ProActive Real Estate and others. This will be a can’t-miss event. Has your business been impacted by the recent fires? Apply now for a chance to receive one of 10 free tickets to SuperCrowdLA on May 2nd and 3rd and gain the tools to rebuild and grow!

Community Event Calendar

• Successful Funding with Karl Dakin, Tuesdays at 10:00 AM ET – Click on Events

• Igniting Community Capital to Build Outdoor Recreation Communities, Crowdfund Better, Thursdays, March 20 & 27, April 3 & 10, 2025, at 1:00 PM ET.

• Capital Raise Strategies for Purpose Driven Enterprises, hosted by PathLight Law, February 25 at 1:00 PM ET.

• NC3 Changing the Paradigm: Mobilizing Community Investment Funds, March 7, 2025

• Asheville Neighborhood Economics, April 1-2, 2-25.

• Regulated Investment Crowdfunding Summit 2025, Crowdfunding Professional Association, Washington DC, October 21-22, 2025.

Call for community action:

• Please show your support for a tax credit for investments made via Regulation Crowdfunding, benefitting both the investors and the Small Businesses that receive the investments. Learn more here.

If you would like to submit an event for us to share with the 9,000+ members of the SuperCrowd, click here.

Originally Published on https://www.superpowers4good.com/

Devin Thorpe Champion of Social Good

Devin is the CEO of The Super Crowd, Inc., a public benefit corporation helping diverse founders and social entrepreneurs raise capital via impact crowdfunding. He is also a bestselling author who calls himself a champion of social good. His most recent book, How to Make Money with Impact Crowdfunding, is an investment guide for everyone. He has produced about 1,500 episodes of his show featuring luminary change agents, including Bill Gates. His books—read over 1 million times—help people do more good. He has helped nonprofits raise millions of dollars via crowdfunding. He draws on his experience as an investment banker, CFO, treasurer and U.S. Senate staffer. He earned an MBA at Cornell. Frequently finding himself on airplanes, Devin is grateful to be middle-seat-sized.