In January 2025, the newly inaugurated Trump administration dismantled federal diversity, equity, and inclusion (DEI) programs. But the shift was not confined to Washington. Within months, many of the DEI efforts and initiatives across venture capital firms and technology companies that once made public commitments to racial equity and founder diversity began to unravel.

Some of this was explicit, as evidenced by some venture funds quietly retiring dedicated funds for diverse founders. Corporate accelerators eliminated programming for underrepresented founders, and dedicated DEI heads were laid off or reassigned, while other changes were more subtle, including updates to websites, repackaging of DEI under broader “talent” or “culture” umbrellas, or simply the silent expiration of once-celebrated pledges and commitments.

This was the backdrop for All Founders Need Therapy, a Juneteenth session hosted by Goodie Nation, not to talk about startup affairs, but to hold space for something far more rare in startup culture:honest reflection. What does it feel like to build a company right now as a founder of color? How are founders coping as the venture market turns, funding focuses on AI, and many of the support systems they were promised disappear?

This session, part therapy, part community circle, made one thing painfully clear, that the underrepresented startup ecosystem is not just under pressure, it is beginning to crack both financially and emotionally, and many of its most committed builders are being left behind.

1. Founders Are Running on Fumes

Across the board, founders described what felt like a slow unraveling professionally, financially, and emotionally. Some are operating with less than 6 months of runway, and others are working full-time jobs while trying to keep their companies alive at night. Joey Womack, the founder of Goodie Nation, spoke about the emotional whiplash of watching peer support organizations close their doors:

“Some of the most impactful founder communities have shut down or are on life support. I get emails that bounce back from founders I just spoke to months ago because they’ve closed shop.”

Joey described the overwhelming sense of responsibility he feels to keep Goodie Nation running, not just as a program, but as a symbol of hope. Founders across the country, particularly Black and Brown founders, are turning to Goodie Nation as one of the few institutions that still shows up. That kind of symbolic weight is not scalable, and it is unsustainable without continued structural support from industry stakeholders.

Founders on the call echoed a similar tension: they are asked to be scrappy, optimistic, and resilient, but the emotional toll of holding their companies together, often without a safety net, is crushing. These are not isolated stories of failure. They are systemic outcomes of a shrinking early-stage ecosystem that increasingly favors capital efficiency over community.

2. The DEI Whiplash Is Personal and Structural

The fallout from the DEI rollback is not theoretical. For many founders, particularly those who identify as Black, Brown, LGBTQ+, or women, it is directly impacting their access to capital, advisory support, networks, and level of engagement from community stakeholders.

One founder, a former Big Tech company engineer, shared how much of his consulting work in recent years came not from his technical skills, but frustratingly, from his identity:

“People brought me in because I was ‘the Black software engineer.’ Now that DEI is out of fashion, I’m fighting just to prove I’m good at what I do.”

For underrepresented founders, the DEI era brought new doors, but those doors were rarely wide open. More often, they were cracked just enough to peek in. And now, even that sliver is closing. Many founders feel like they are being pushed out of the ecosystem, not because their ideas lack merit, but because the industry has quietly shifted its priorities.

Others described getting “bridge” checks that helped them survive but never allowed them to scale.

“We raised just enough to keep the lights on, but never enough to build something truly durable.”

This creates a particularly brutal cycle: founders are told to build traction without capital, and when they do, they are told the opportunity is too small or too early. Meanwhile, less diverse teams are still raising meaningful capital on vision alone.

The emotional burden of being constantly “seen” but never fully supported was evident time and again. DEI may have opened conversations, but unfortunately rarely changed outcomes for founders. And now, the conversation itself is disappearing.

3. The Middle of the Movie Is Where Most Stories Die

Founders are familiar with the hero’s journey. The narrative arc begins with a bold leap, spirals into a moment of doubt, and culminates in a triumphant return. But in startup land, we rarely acknowledge the messy middle, the part where the hero is broke, exhausted, unsure, and utterly alone.

Joey Womack likened this phase to Act II in a Star Wars film. The founder launches the company (Act I). Then comes the crash: rejection, layoffs, churn, co-founder conflict, down rounds (Act II). Only some make it to the redemption arc (Act III).

“Startup culture celebrates the beginning and the end. But no one wants to sit in the middle with you where you’re doubting everything.”

That is where All Founders Need Therapy lives. The session intentionally creates space for founders to voice grief, doubt, and vulnerability, emotions that founders are often told to suppress in favor of “grit.” But that grit can easily turn into internalized shame. Without a place to be honest, founders begin to burn out quietly. They pull back. They leave.

What was clear from this gathering is that simply being in a room (or Zoom) where people say out loud what you’re silently carrying is deeply healing. Sometimes, the greatest capital is being understood.

4. Yes, Founders Are Still Building, But the Models Are Changing

Despite all the pain, this was not a group of people giving up. If anything, it was a reminder that founders are some of the most creative and adaptive people in any economy. But what they are building and how they are building is changing..

One founder shared that they were shutting down a physical studio after a decade, but were already prototyping a new idea by the weekend. Another is transitioning from enterprise consulting to building a product-led platform that generates income through targeted niche markets.

A repeated theme was control, as founders are shifting their focus toward revenue-first models, audience-based businesses, and micro-SaaS ventures that allow for autonomy and sustainability, even without institutional capital.

This recalibration matters. Founders are rejecting traditional venture paths not out of bitterness, but out of clarity. They are designing businesses to last on their terms.

What they need is not just capital, but breathing room. Room to test, to fail, to recover, and to build again.

Final Thought for VCs and Ecosystem Leaders

If you are a fund manager, accelerator lead, or tech executive who supported DEI efforts in 2020, now is the time to look around and ask: 

What remains, and am I honoring my commitments?

The founders are still here, but are not looking for charity. They are looking for consistency. The silence from many institutional voices has been deafening, but the need for structural change and community support has never been louder.

This session reminded us that the middle of the journey is the most dangerous part. It is where most companies die. It is also where most character is built. And if we want to rebuild a truly inclusive innovation economy, we need to start by showing up, especially when things get quiet, especially when the headlines fade.

Sometimes, the most impactful thing you can offer a founder is not always a term sheet. It is a sense that they are not alone in the fight.

Let’s stay in the room.