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CNN PRESENTS

Black in America: The New Promised Land - Silicon Valley

Aired November 24, 2011 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


MICHAEL ARRINGTON, CRUNCHFUND: You know, this is a white and Asian world here. It just is.

HANK WILLIAMS, 46, KLOUD.CO: People are minting money in Silicon Valley right now. I want a piece of it.

ANGELA BENTON, 30, GETCUED.COM: Hi.

UNIDENTIFIED MALE: It's a capitalist endeavor. You know, we're all serious adults, entrepreneurs.

BENTON: I'm determined.

WAYNE SUTTON, 36, VOUCHAPP.COM: I'm tired of playing games.

TIFFANI ASHTON BELL, 26, PENCILYOU.IN: I believe in my product. I believe in my ideas.

UNIDENTIFIED MALE: And we're building great companies, every single one of us.

UNIDENTIFIED MALE: I'm chasing success.

UNIDENTIFIED MALE: And so we want to stand out because we're just so damn good that they have to notice us.

UNIDENTIFIED MALE: Each founder is going to have two minutes to pitch their idea.

BENTON: I'm nervous. I haven't been nervous all night and I'm nervous.

UNIDENTIFIED MALE: The way we're going to make money --

UNIDENTIFIED MALE: Um.

ANTHONY FRAZIER, 25, PLAYD.IT: Um.

UNIDENTIFIED MALE: You didn't tell me a thing about what your business plan was or what you intend to do for revenue.

FRAZIER: OK.

PROF. VIVEK WADHWA, DUKE UNIVERSITY When I did raise Venture Capital my buddies here advised me was to get a white guy to be your front man. And I did that. I hired very impressive, six-foot-tall polished white guy, and let him do all the talking.

SUTTON: It's very sad. In 2011, we got a black president. And he's not putting no money in my pocket right now directly. So what do we go to do? Play the game until we're successful.

SOLEDAD O'BRIEN, CNN PRESENTS HOST (on camera): If 10 years down the road there are no more black entrepreneurs than there are today, what's at risk?

WILLIAMS: A permanent underclass.

O'BRIEN (voice-over): In this unassuming three-bedroom home in Mountain View, California, Angela Benton and Wayne Sutton hope to make history.

SUTTON: Here? Certainly doesn't look like.

BENTON: One of them is supposed to be a sofa bed.

O'BRIEN: The friends connected online. Two black Internet entrepreneurs trying to succeed in an overwhelmingly white industry.

BENTON: For whatever reason, African-Americans tend to be consumers of technology and not really creators of technology.

SUTTON: Name me one black web tech founder or start-up CEO. Where's the example of a black Mark Zuckerberg?

O'BRIEN: Last year only 1 percent of Internet start-ups that received funding were founded by African-Americans. So Angela and Wayne created the New Media Accelerator. NewME for short. A ground- breaking program designed to speed up the development and success of minority-led start-ups in Silicon Valley.

BENTON: If you're going to be an actor you go to L.A. If you're going to be in fashion, you go to New York. And if you're going to be in technology, then you come to Silicon Valley.

O'BRIEN: Modeled after similar programs, NewME offers its dot com founders immediate access to deep-pocketed investors, well-connected mentors, and opens doors to some of the most successful Internet companies in the world.

UNIDENTIFIED MALE: Welcome to Facebook.

O'BRIEN: The downside?

BENTON: Everyone will be living together.

O'BRIEN: Eight people. Nine weeks. One house. One goal. Changing the face of Silicon Valley.

BENTON: For it to be successful to me, founders have to get investment.

UNIDENTIFIED MALE: Thanks for your enthusiasm for coming to Google. O'BRIEN: The high-stakes program, backed by sponsors, culminates in demo day when each entrepreneur will have just six minutes to pitch their company to a room full of investors. Seventy-five people applied. Six were chosen by Angela and Wayne based on their start-up ideas.

BENTON: People are leaving their loved ones for the summer.

UNIDENTIFIED MALE: Ready, Kenny?

BENTON: They're leaving their spouses. They're leaving their kids. Some of them are quitting their jobs. So people are making major life changes to take a risk and be involved in this program and that's a little bit of pressure.

Hi. Right. Nice to meet you.

O'BRIEN: They include a former MIT student body president.

BENTON: Pius is really smart. Pius is really strong.

O'BRIEN: A master programmer.

BENTON: Tiffani is super sweet. She's a girl and she's also a programmer. So that's an oddity.

O'BRIEN: A former hedge fund project manager.

BENTON: Crisson is really focused.

O'BRIEN: A video game blogger.

BENTON: Anthony, I like to call him cool, because he's just laid back. He's not trying to be something he's not.

O'BRIEN: An engineer from Detroit.

BENTON: Hajj has swagger. He's a sales guy.

O'BRIEN: A former dot com millionaire.

BENTON: Hank, he's experienced. He's raised money before.

O'BRIEN: NewME cofounder and self-described country boy, Wayne Sutton.

SUTTON: It takes courage and guts to come out here, you know, and leave my son, my wife a while, and you know come out here and pursue your dreams.

PIUS UZAMERE, 28, BECOUPLY.COM: This isn't a charity. It's not a summer camp. We're capitalists. We're all trying to build great businesses. And we're trying to secure the funding needed to build those businesses.

O'BRIEN (on camera): Why is this so important? WILLIAMS: How can you have a huge and growing part of the economy with no participation from a significant demographic?

O'BRIEN: The odds of success are slim. Eighty percent of all start- ups founded by first-time entrepreneurs fail. But Angela is confident her accelerator will help the housemates beat the odds. Something she says she's done her entire life.

BENTON: I was 15, and I was in ninth grade and I was pregnant. But it was a hard time. I mean, when you're around people in society and you're also around your own family and people think they know how your life is going to end up.

O'BRIEN: Driven to prove people wrong, Angela earned a master's degree in graphic design and founded a trailblazing Web site for African-Americans interested in technology. Today, Angela is 30. A single mother of three. In addition to running the NewME accelerator with Wayne, Angela is working on her own start-up. Getcued. A mobile app that makes shopping and restaurant recommendations based on past experiences.

BENTON: People often have a lot of excuses. I hate that because I could have had every reason to have a lot of excuses. And I didn't. I mean, just how bad do you want something?

UNIDENTIFIED MALE: Six people that share one bathroom?

O'BRIEN: The eight entrepreneurs arrive in Mountain View with billion-dollar dreams. But for the next nine weeks, they'll sleep on $80 air mattresses.

WILLIAMS: It's not what I would call five-star accommodations. I'd call it scrappy.

O'BRIEN: But their first event is first-class. Welcome reception sponsored by Google.

UNIDENTIFIED MALE: How you doing?

UNIDENTIFIED FEMALE: Good, how are you doing?

UZAMERE: The first inkling that something may be a little different than we'd expected was when there was an announcement about a dragon's den and that the judges for the dragon's den should please come up to the stage.

WILLIAMS: Dragons don't sound good.

BENTON: I'm going in cold and I'm pitching. Cued is basically -- and I don't even know what I'm supposed to say next.

(COMMERCIAL BREAK)

O'BRIEN (voice-over): By the end of the first day, the NewME entrepreneurs find themselves inside the headquarters of Google. An Internet start-up founded in 1998, today worth close to $200 billion. UNIDENTIFIED FEMALE: How you doing?

UNIDENTIFIED MALE: People respond positively and negatively.

UNIDENTIFIED MALE: This place is amazing.

UNIDENTIFIED MALE: Hello. Welcome to Google.

O'BRIEN: But quickly, their excitement is replaced by concern.

UNIDENTIFIED MALE: If anyone who's involved in judging the dragon's den, please come up to the front.

UZAMERE: We're kind of all wondering what is the dragon's den? It's essentially slang for a panel of judges where they, you know, throw you and your company in and, you know, they essentially rip you to shreds after you pitch. And it's really the antithesis of an unstressful environment.

BENTON: The founders felt kind of ambushed in a way.

UNIDENTIFIED MALE: First founder to come up is Tiffani Bell for the company Pencil You In.

BELL: So, yes. I'm Tiffani.

O'BRIEN: Tiffani graduated from Howard University with a degree in computer science. She quit her job as a Web developer in Fayetteville, North Carolina, to join the accelerator.

(On camera): How many black female programmers do you know?

BELL: So before I went to Howard, I would say none. Historically, black people -- whether we're talking about, like, you know, buffalo soldiers or the Tuskegee airmen have not traditionally been thought of as being capable of things. And so I think that's kind of how it is for me as a black woman in technology.

Pencil You In is my start-up. And I'm -- right now I'm allowing beauticians to accept appointments online. At this point I have a functional product.

FRAZIER: By the time she was done and the judges started critiquing her, they were critiquing her on everything that they told us we have to worry about.

UNIDENTIFIED MALE: You need to do your darnedest to differentiate what you're doing.

UNIDENTIFIED MALE: It was serious.

UNIDENTIFIED MALE: Our next entrepreneur is Anthony Frazier. His start-up is Played.

FRAZIER: We want to give gamers a chance to recommend games and also have the app recommend games to them based off what they've played. UNIDENTIFIED MALE: You didn't tell me a thing about what your business plan was and what you want -- what you intend to do for revenue.

FRAZIER: It was definitely a dragon's lair.

UNIDENTIFIED FEMALE: What are your launch plans?

FRAZIER: Some people got chewed up more than others.

WILLIAMS: A material entrepreneur. Our first product is called Kloud.co Organizer. We let you organize information.

UNIDENTIFIED MALE: I don't know who your customer is.

UNIDENTIFIED MALE: Don't ever give vague numbers. Give specific numbers.

UNIDENTIFIED MALE: My way of impressing my girlfriend is building a Web app so --

(LAUGHTER)

UNIDENTIFIED MALE: There are things you said that kind of backed me off.

UNIDENTIFIED MALE: You're a chief salesperson. You have to figure out how to relate to your audience.

UNIDENTIFIED MALE: I don't know what you built, what you're aspiring to built.

UNIDENTIFIED MALE: Last but certainly not least we have Angela Benton.

BENTON: Cued is basically a mobile application.

When I was giving my pitch, I literally just -- my mind kind of blanked.

I'm nervous. I haven't been nervous all night, and I'm nervous.

I was just like, wait, I'm at Google, and I'm pitching, and I don't even know what I'm supposed to say next. That's it.

UNIDENTIFIED MALE: Your nervousness I think cut you a little bit short so.

O'BRIEN: The Google event is over. And the impression left is not good.

WRIGHT: I kind of felt bad for them because any time you -- you know, give a good pitch it's a missed opportunity.

O'BRIEN: Yet the house mates feel it went OK.

BENTON: The presentations across the board were really strong.

FRAZIER: I would probably give myself a seven.

WILLIAMS: I thought people did really well, though, considering that there -- that there was no preparation.

O'BRIEN: Housemate Hank Williams has pitched to Silicon Valley investors before.

(On camera): Are you the oldest person in the house?

WILLIAMS: By far.

O'BRIEN: Really?

WILLIAMS: I think, yes.

O'BRIEN (voice-over): Hank grew up in Harlem. The son of a judge. He left the University of Pennsylvania after his junior year and in 2000 founded an Internet radio start-up that raised $40 million. Two years later, it folded.

WILLIAMS: Emotionally it was very difficult. I really for a couple of years didn't want anything to do with technology at all.

O'BRIEN: Hank has spent the last four years full time developing Kloud.co, a Web platform to help people organize their e-mail and personal documents online.

(On camera): What are you looking for moneywise?

WILLIAMS: Over the course of the next several years of the company, $5 to $10 million.

O'BRIEN: Are you competing with the people in the house?

WILLIAMS: No. Not at all. We're eight companies out of thousands seeking funding.

O'BRIEN (voice-over): Silicon Valley is a long way from Newark, New Jersey, where NewME entrepreneur Anthony Frazier grew up.

FRAZIER: I didn't grow up with a lot of money. When I was living in Newark, the only time I would see a person of a different color, you know, a white person would be like the missionaries walking around trying to convert people.

O'BRIEN: After dropping out of community college, he worked the overnight shift at K-Mart.

FRAZIER: The people I worked with, that was their life. But I've realized that a lot of those people didn't really have many options. I don't want to work like that. I kind of want to make my own way.

O'BRIEN: A video game fanatic, Anthony created a video game Web site which led to his start-up idea. (On camera): So tell me about Playd.

FRAZIER: Playd is a social network for gamers. I got passion. I got determination. I got heart. I may not have the paper to say I know what I know, but I know what I know.

O'BRIEN (voice-over): For NewME entrepreneur Pius Uzamere, the summer in Silicon Valley is about going all in on his dot com idea. An MIT grad and former student body president, Pius quit his consulting business last year to work with his co-founder and girlfriend Becky, developing BeCouply, a social network for couples.

UZAMERE: For me this isn't a summer project. This isn't -- it's not a hobby.

O'BRIEN: Living off their savings, the couple bought one-way tickets to the West Coast. Becky will live close to the NewME house during the nine-week program.

UZAMERE: Definitely for us the stakes are very high.

O'BRIEN: The housemates know the road to demo day won't be easy.

WILLIAMS: If you're going to take something personal when someone says, I didn't think that was very good at all, and is very blunt and straightforward, and that hurts your feelings, go home now. Go home now.

UZAMERE: There are lots of people who, you know, they hear about the program like this and they assume that it's more or less a handout. You know? And that we aren't serious entrepreneurs. And all they're doing is charity for -- for minorities.

It's a capitalist endeavor. We're all serious adults, entrepreneurs who -- you know, we're building great companies, every single one of us. And so we want to stand out because we're just so damn good that they have to notice us.

O'BRIEN (on camera): Why do you think there are so few African- American tech entrepreneurs?

RON CONWAY, ANGEL INVESTOR: I think that they probably think that it is an uphill battle.

O'BRIEN: Is it?

CONWAY: It is an uphill battle for --

O'BRIEN: For everyone or for African-Americans specifically?

CONWAY: Oh, for everyone.

O'BRIEN (voice-over): Perhaps the most influential investor in Silicon Valley is Ron Conway. An early investor in Google, PayPal, and Twitter, Conway invests about $10 million a year in start-ups. CONWAY: But we only invest in one out of 30 companies that we see. So it's a very -- it's a whittling down process that's pretty brutal. I have to admit that a lot of it is who you know. If they're well known to us, we will tend to see that entrepreneur before an entrepreneur who's just coming in blind.

O'BRIEN: Is that particularly hard if you're African-American?

CONWAY: I would -- I would say yes. It's disappointing, but, you know, we don't know how to go recruit those people.

WRIGHT: So right now all you should be thinking about is how do I execute on my idea.

O'BRIEN: One week after the Google event, the entrepreneurs have dinner with one of their mentors, Navarrow Wright, the chief technology officer for the Internet company Interactive One. Navarrow was also one of the four dragons during the Google event.

(On camera): What was your take? Describe for me that moment.

WRIGHT: I said to myself that they weren't ready. Everyone here is kind of looking at this environment of this incubator, and saying, I don't want to be the first person to tell this black person that hey, they're not doing a good job. Right? So I guess to a certain degree that role is kind of fallen on me because --

O'BRIEN: On the black guy.

WRIGHT: On the black guy. Yes.

Show of hands. Who thinks they did well? So nobody thinks they did well?

UNIDENTIFIED MALE: I did OK.

WRIGHT: I think you guys need to be a little bit harder on yourselves. And let's be clear. My goal to say that is to not to belittle anybody in this room. My goal to say that is that I need you guys and want you guys to understand the vastness of this opportunity. Right? You guys walked through Palo Alto to get here. This is probably the most black people who are in the town right now. Let's be honest, right? So you need to understand the reality that you're in.

WILLIAMS: No one that walked into that room knew they were about to pitch.

WRIGHT: Let's say you walked in there and Mark Zuckerberg was in there and said, hey, I want to hear your idea. So you're going to tell me that it's OK to say, oh, well, I didn't know I was going to pitch to him and I shouldn't be ready? You're going to make those excuses and at the end of the nine weeks not be where you need to be?

But you got to recognize the only person that was in control of that was yourself. It wasn't the Valley. It wasn't the investors. It was you. Because you guys made the decision to come out here and it's bigger than you. If an investor is only seeing one African-American a year to give a pitch, right, and you don't do well, you not only affected you, you affected other people. It's that important.

I joke with Angela. There's a tag line. No whack demos on demo day.

O'BRIEN (voice-over): There are still eight weeks till demo day. And every day the challenge seems greater.

ARRINGTON: This is a white and Asian world here. It just is.

WADHWA: When I did raise venture capital, my buddy here's advice to me was, get a white guy to be your front man.

(COMMERCIAL BREAK)

O'BRIEN (voice-over): The NewME entrepreneurs start their journey humbled. They have eight weeks left to develop their dot com companies and refine their pitches before demo day.

UZAMERE: This is anything but the real world. This is anything but "Jersey Shore." You know we're all here to work. I don't know if there's even any alcohol in this house. There are a lot of computers. A lot of people coding late at night.

WILLIAMS: I wake up at 6:00, there's already one or two people that have taken a shower. So I think everyone is pretty focused and pretty intense. And, you know, there's not a lot of play time.

MITCH KAPOR, KAPOR CAPITAL: Start-ups are hard. You have to go through suffering. Most of the time in unexpected ways that will really test and challenge.

Are you also trying to do an actual raise of capital?

O'BRIEN: Noted tech entrepreneur Mitch Kapor is a sponsor and mentor of the NewME program.

KAPOR: They're going to want to know what your plan is.

O'BRIEN: In 1982 Kapor founded the Lotus Development Corporation which developed the popular Lotus 123 spreadsheet. The company was later sold for $3.5 billion. Today Kapor invests in start-ups.

KAPOR: I'm incredibly excited about NewME.

O'BRIEN (on camera): Why do you care about a bunch of black entrepreneurs who've come to Silicon Valley to try to be successful?

KAPOR: We have serious problems being economically competitive in the world. And we have to have everybody, absolutely everybody, who can contribute making their maximum contribution.

You can't tell the whole story.

WRIGHT: OK. KAPOR: Is it really true that every entrepreneur with an idea gets an equal shot? That's absolutely not true.

ARRINGTON: There are so few women and minorities asking money from VCs, I'm not sure if there's enough data to really know if there's some sort of built-in bias.

O'BRIEN (voice-over): Michael Arrington is the founder of the influential Silicon Valley Web site, techcrunch. Today a venture capitalist, Arrington is outspoken in his belief that success in the Valley is more merit-based than any other place in the world.

(On camera): Why do you think there are so few African-American tech entrepreneurs here?

ARRINGTON: I don't know. And it's something that should be fixed. But I think a lot of it goes back to school. A lot of the successful people here are engineers. Because if they aren't engineers, they have to find an engineer to help them build the software or hardware or both.

O'BRIEN: So the pipeline issue.

ARRINGTON: Yes. I think that's a big problem.

O'BRIEN: Who would you say is the number one black technology entrepreneur?

ARRINGTON: You know, that's a weird question. Who would you say is the number one black --

O'BRIEN: I don't cover technology.

ARRINGTON: Yes. You know I'm trying to think of any black CEOs in Silicon Valley and I'm not even coming up with any.

O'BRIEN: So the entrepreneurs, people making companies.

ARRINGTON: I don't know a single black entrepreneur.

O'BRIEN: And you cover the industry.

ARRINGTON: I mean there --

O'BRIEN: What does that say?

ARRINGTON: It means there just aren't any. You saw the perfect meritocratic, but generally speaking it doesn't matter what your education is. It doesn't matter who your parents are here. You can become very successful based purely on your brain size and how you use it.

KAPOR: I have not been in the room recently when somebody said, oh, that's an African-American , like, company. I'm not going to invest there. But I guarantee you from personal experience, that's what people are thinking. So I would go toe to toe with Michael Arrington and wind up saying, the part that is meritocratic is great and there's a big part of it that isn't.

O'BRIEN (voice-over): Arrington says the rarity of black entrepreneurs might give them an edge.

ARRINGTON: This is a white and Asian world here. It just is. It's not a good thing. We have a conference three times in a year. It's actually launched on stage. We're looking for women and minorities all the time. There's a guy actually he was my first client when I was a lawyer, his last company just launched at our event. And he's African-American.

It's a cool start-up. His start-u is really cool. But he could have launched a clown show on stage and I would have put him up there. Absolutely. I think he's the first time we've had an African-American -- be the sole founder.

UZAMERE: Me and Becky sometimes watch that show "Down Home Cooking with the Neelies."

WILLIAMS: The burgers look almost done.

O'BRIEN: Among the 25 speakers and mentors who meet with the NewME entrepreneurs, it's Vivek Wadhwa's visit that leaves them speechless.

WADHWA: You know, I think what you're doing is fantastic.

O'BRIEN: He's a professor at Duke. Wadhwa came to the United States from India in 1980 and founded two Internet companies that raised $50 million.

WADHWA: Can I be critical about the community?

UNIDENTIFIED MALE: Yes.

WADHWA: You folks don't help each other. In some parts of America you have this entitlement attitude that we've been discriminated against. Theirs ancestors came as slaves. And that's what's held the community back.

You know my community did the exact opposite. We didn't -- we basically said, all right, there's a problem here. We'll fix it ourselves.

O'BRIEN: Professor Wadhwa says investors in the Valley practice what's known as pattern matching. They see entrepreneurs who are successful, mainly young, white males, and invest in those who fit that pattern.

WADHWA: When I did raise venture capital, my buddy's here advice to me was, he said get a white guy to be your front man. And I did that. I hired a very impressive six-foot-tall polished white guy and let him do all the talking. That's the way it is here. I'm telling you. I've done it, OK? I mean this is -- as I said, this is how I surmounted the problems. That's the way the system works here. You might as well understand it. And then use it to your advantage.

BENTON: I'm still kind of, like, speechless.

WILLIAMS: You know, there's something raw and very direct about it that's -- you know, that's a little -- it's jarring.

SUTTON: It's very sad. In 2011, it's very sad. We got a black president. And he's not putting no money in my pocket right now directly. So what do we got to do? Play the game until we successful.

WADHWA: There's so many kids in Berkeley or Stanford you can hire.

O'BRIEN: Professor Wadhwa leaves and Hank gathers the housemates to talk.

WILLIAMS: We are alone, you know. We're just us. This is it. There's not that many of us. And so it's kind of weird. We've been here a week, and no one's done a demo or showed a screenshot or anything between us. I mean it's crazy.

And I -- I guess we're all just trying to -- you know, everyone is so focused on themselves and the -- and I don't mean to offend anybody. I'm not saying that people are selfish. But I'm saying that we're -- you know, who else is going to help you? Who else?

We ought to figure out how to band together and, like, make something bigger and better and more powerful. Because there's almost none of us. Maybe this is a catalyst. I don't know.

SUTTON: That's why we have a bigger success working together than we do alone.

BENTON: We need to have something that comes out of this after nine weeks.

UNIDENTIFIED MALE: Let's get cracking.

BENTON: OK. I'm changing my clothes. I'm putting on my sweats.

O'BRIEN: They realize to have any chance of success on demo day, they'll have to work together.

UNIDENTIFIED MALE: I'm not crazy about it, but it's something.

UNIDENTIFIED MALE: The simplest feature that will differentiate you and develop that and try to make that your demo day prototype.

(COMMERCIAL BREAK)

WILLIAMS: I'm trying to get one thing clear, which is that I can't be the front man. I can't even talk about this. You've got to do it. That's all I'm saying.

UZAMERE: We're about a month out from tem demo day, and the pressure's on. FRAZIER: The stakes are really high. I think if the stakes aren't high enough, maybe you aren't taking that much of a risk. I definitely took a huge risk coming out here, you know. Excuse me. I'm trying to get some information on where exactly this is going to take place.

My state of mind is just focused on the product. Get as many big people and big places excited about what I'm doing. You know, they thought we were volunteers. I guess that comes with it. You know? So I started a brand-new start-up called Playd. It's called Playd. And it's going to be a gamer -- thank you. You got a card?

UNIDENTIFIED MALE: I do, yes.

FRAZIER: Yes?

Yes that's when I realized this whole thing is about relationships. Playd is a good idea, you know. I'm thinking this one is going to be the big one. It'll be interesting to see how it all folds out.

O'BRIEN: With less than two weeks until demo day, the stress level inside the house is rising. Pius's girlfriend, Becky, doesn't live in the house. But she's a constant presence.

UNIDENTIFIED FEMALE: See you guys tomorrow.

O'BRIEN: Pius doesn't drive, so Becky must walk several miles to take the bus to get to the NewME house. Unless one of the housemates drives her.

BENTON: What's annoying is the expectation that we are supposed to take care of them. So it's not my obligation to make sure that you get home at 1:00 in the morning.

UZAMERE: It's been very interesting seeing how resistant certain people have been about, you know, giving her a ride or anything else. It's kind of odd.

O'BRIEN (on camera): Are people hostile to Becky?

WRIGHT: I think people are honest. And how that is internalized, that's a totally different question.

UZAMERE: My name's Pius.

BECKY CRUZE, BECOUPLY.COM: And I'm Becky. And we are the co-founders of BeCouply.

UZAMERE: I think that some people have definitely had some kind of latent hostility towards her. For what reasons, I can't speculate.

O'BRIEN: Is race an issue?

UNIDENTIFIED FEMALE: I do think that there seems to be some element, unconscious or not, that seems like this is a program for black entrepreneurs and you're not a black entrepreneur. And I certainly would not dispute that. I am not a black entrepreneur.

BENTON: If no one can pick you up or no one can drop you off, then you got to take the train or bus. It had nothing to do with Becky being white. I like Becky a lot.

O'BRIEN (voice-over): It's just another problem for Angela to deal with.

(On camera): You seem very stressed to me. Are you?

BENTON: Yes. I mean, I am. It's a lot going on. It's a lot happening.

You need to know what you're going to pitch.

O'BRIEN (voice-over): She's away from her three daughters, running the accelerator, developing her own dot com company. And it's become clear. The best way to make the accelerator a long-term success is to move to Silicon Valley with her kids.

BENTON: If I do it, I want to do it right so that they can start the new school season out here. I mean, that's --

O'BRIEN (on camera): That's in three weeks.

BENTON: Yes. That's crazy. So we'll see.

O'BRIEN (voice-over): For weeks, the entrepreneurs have worked day and night, developing business plans, building their websites, refining their pitches. But for Wayne Sutton, the hardest part is missing his 7-month-old son.

SUTTON: I'm happy. It's emotional, too. Because you want to play with him, hold him and stuff. And I'm across the country and just, you know, dealing with stuff and I could be playing with him.

I know I'm not doing this, making this sacrifice so I can get rich. I want my little boy to be successful. I want to learn so I can teach him to be successful.

O'BRIEN: Most nights Wayne works until 11:00 p.m. at a neighborhood yogurt shop. He walks home to clear his head. On a Monday night, he's walking home when he's stopped by police.

SUTTON: I saw two cops, hands on their hips, ready to pull out a gun, a baton or something to take me down if necessary.

O'BRIEN: The officers run a background check. Wayne doesn't have a criminal record. He's told he can go.

SUTTON: 11:00, 2:00, 1:00 in the afternoon, 11:00 at night. If I'm walking down the street, just trying to get home, I shouldn't get stopped by police.

O'BRIEN: Mountain View Police tell us they stopped Wayne because he was an unfamiliar face in the neighborhood. SUTTON: It don't look good for me to be stopped by the police. I'm not trying to sell a rap album. I'm trying to launch a company here. I don't need no street credibility. I need start-up credibility. That's what I need.

UZAMERE: Apparently he was walking while black.

HAJJ, 39, GOKIT.ME: You would think in Silicon Valley where you're supposedly judged based on talent alone and great ideas that you would be judged the same way. Whether you're walking down the street or whether you're pitching an idea. It just truly reinforces that that's not the reality that we as African-Americans live in.

I want to get back to my computer --

O'BRIEN: With just 24 hours left until demo day, the housemates hold one final practice session.

WRIGHT: Show how your product solves the problem.

WILLIAMS: OK.

I've been writing software a long time and thinking about data.

Standing in front of a podium is always a little bit nerve-racking.

UNIDENTIFIED MALE: How is everyone doing today?

I feel pretty good. But I also realize that there's a difference between practice and game day, you know. I mean, it's totally different when the lights are on.

My heart is still beating weird.

BELL: I'm Tiffani Ashton Bell, CEO and founder of Pencil You In. We it come to salons -- hold on. Hold on. Stop.

O'BRIEN: Tiffani, a programmer, is nervous.

BELL: It's probably the most high-profile thing that I've done in my life as far as a speaking event. Mostly just because I feel like it could be one thing that determines the course of the rest of my life.

SUTTON: It's something you can't remember word for word. I don't know. But just tell the story.

WRIGHT: You need to make a statement, just keep going if you wanted. But if you stop and pause --

BELL: Right.

WRIGHT: -- they'll know you're making a mistake.

O'BRIEN: There's no more time to practice. Tomorrow is demo day.

(COMMERCIAL BREAK) FRAZIER: Keep a cool head. Focus.

KAPOR: It's like opening night on Broadway. And now it's show time.

BELL: Going to make it happen today.

WILLIAMS: I'm a little nervous.

KAPOR: Of course you're going to be scared. It's only human.

UZAMERE: Let's do it again.

O'BRIEN (voice-over): Less than an hour to go, and the entrepreneurs run through their demo day pitches one last time.

WRIGHT: Now let's take a quick look at some of the features that separate --

KAPOR: The counsel that I try to give is, be real, be substantive, but just say enough to get a serious investor interested and hungry for more.

UNIDENTIFIED FEMALE: Thank you. All the way to the back.

UZAMERE: When we walk in, we see it's standing room only. Investors. Venture capitalists. Angels. Members of the press were there. It was a big deal. Really high stakes.

O'BRIEN: For Anthony Frazier, demo day is much more than an opportunity to pitch.

FRAZIER: For a large part of the first half of my life, you know, you know, me and my mother and my brother had to go to different houses and stay with different family members. We never had a place to call our own. And one day my mother told me, like, you're going to get me a house. I just think about her wanting a house. I'm going to get her a house.

WRIGHT: Father God, thank you for allowing us to take this journey together. Let us recognize that our talents have brought us here. I thank (INAUDIBLE) to bring our ideas to fruition, to ignore the fact that we haven't been done before, we've done great things, we thank you in Jesus' name, (INAUDIBLE) our demos. Amen.

O'BRIEN: Demo day begins. Each entrepreneur gets six minutes to pitch.

WRIGHT: I'm going to ask everyone to take their seats, please. One last call to take your seats.

Good morning, everyone. Less than 1 percent of technology start-ups are founded by African-Americans. And in a place where opportunities and challenges are overcome every day, that's a significant one. So without further ado, Pius Uzamere and Becky Cruze from BeCouply. UZAMERE: We kind of just launched into it.

My name is Pius. I'm the product designer and hacker behind BeCouply. Well, we focus on three things. Discovering new date ideas and date spots. Everything starts to fade away. The crowd disappears. And there's nothing but the material.

We're not just building an app here, but we're really on a mission. And that mission is to help every couple in the world have an epic social life. Thanks.

WRIGHT: If you guys work with them, you might want to put them not breaking up in your liquidation preference.

UNIDENTIFIED MALE: I personally feel a responsibility to make sure that I leave everything on the court. That I leave everything out there. In life, you always want to be able to say, you know what? I have no regrets.

BELL: Barbershops and salons just in the United States alone made $37 billion in revenue.

BENTON: Standing off to the side and watching everyone present was -- I was just on cloud nine. It was like going to your kid's graduation.

WILLIAMS: There's no way I could have expected things to turn out as well as they did.

Today what we're going to focus on is specific features that we have that relate to collaborations.

FRAZIER: I was a little nervous, of course. But, you know, got to shake it off when it's time to go.

The cool thing about it is, when people see this --

O'BRIEN (on camera): What was going through your head?

FRAZIER: I just thought about what I don't want to be doing next year.

O'BRIEN: What do you mean?

FRAZIER: I don't want to work at K-Mart. So, you know. It's either this or nothing, so.

O'BRIEN: So you had to hit it?

FRAZIER: Yes.

We will be giving gamers digital rewards when you go out and buy it the first day.

BENTON: What Cued does, it actually brings the suggestions and the recommendations into you. So Cued really connects what you like online with what you like in real life. That's what Cued is. Thanks. WRIGHT: Can I ask all the founders to come up, please? I think you guys can agree you give us some great ideas today and some great products. Can you join me and welcome the first class of the NewME accelerated program.

HAJJ: I think the group did amazing. Every single person I thought represented the accelerator, represented the race.

WRIGHT: If you think about where we came from at the first Google event and what you saw today, what was encouraging is a lot of people in the audience said they were good pitches. I mean there was a writer from techcrunch who sent out a tweet saying this was one of the best start-up she's been to.

KAPOR: Hands down, nothing to apologize for, no adjustment in standards. And I go on record about that.

O'BRIEN (voice-over): But a strong pitch is just a first step.

BENTON: It's not demo day and somebody -- you just get a check one day. Ends up in the mail. Ends up in your bank account. It doesn't really happen like that. There is follow-up that has to be done. There are series of meetings that have to be done.

FRAZIER: It's not like we can go home and sleep. No. You know, then again, I'm going to go home and work harder, you know? It gets harder from here. It doesn't get easier.

O'BRIEN (on camera): So if we look three months from now and nobody has received funding, did you fail?

BENTON: That's not going to happen.

O'BRIEN (voice-over): If getting funded is a measure of success, who's succeeded? The answer might surprise you.

(COMMERCIAL BREAK)

O'BRIEN (voice-over): After delivering their pitches on demo day, it's time for the NewME entrepreneurs to chat with potential investors.

FRAZIER: I want to show you how our --

UZAMERE: We got to kind of take the temperature of the crowd, see which investors were really interested.

O'BRIEN (on camera): Is success getting funded?

KAPOR: I think a few companies getting funded should be part of the score of whether it was successful or not.

O'BRIEN: Will some of the companies that were presenting get funded?

KAPOR: I think so.

O'BRIEN (voice-over): Nine weeks after arriving in Silicon Valley, the first NewME accelerator ends.

BENTON: So what's next?

FRAZIER: Everything's next, you know. If I didn't come out here and do the accelerator, I probably wouldn't have had the opportunity to meet a lot of key people and bond with other entrepreneurs that look just like me.

O'BRIEN (on camera): Why is that important?

FRAZIER: There's probably somebody just like me, you know, want to do something with computers. If I had that example early on, maybe I would have done it. If I had myself now go to my younger self and say, look, you need to do this, this, this, this and you can be, like, right here, oh, man, I'd be different. Yes. I would love that.

UZAMERE: If no one were funded, I would be extremely surprised.

WILLIAMS: It has been very real.

UZAMERE: Yes, it has.

Having been out here, it's clear that people -- a lot of them have great intentions. But I think a lot of the people we met throughout the program and on demo day were, you know, utterly surprised just how good everyone was. And why is that a surprise?

O'BRIEN: Do you think you've changed the world? Do you think you've changed Silicon Valley?

SUTTON: No.

O'BRIEN: What did you do, then?

SUTTON: What we have done is that other entrepreneurs who look like us, they'd be like, if you guys can do it, we can do it.

WILLIAMS: Then the black community, we're starting to understand how important technology is and we're starting to want to participate. On the other side, we have to demonstrate success. We have to get some points on the board. And in a visible way. That's why this is really significant.

O'BRIEN (voice-over): When the accelerator ended in August, Tiffani returned home to Fayetteville, North Carolina. She hasn't received any funding yet, but Tiffani says her start-up is adding customers. And early next year, she plans to move back to Silicon Valley.

Crisson, Hajj and Wayne also returned home. They haven't received funding either. But say they remain committed to building their start-ups into successful companies.

SUTTON: I want success so bad that it hurts.

O'BRIEN: In October, Hank received an undisclosed investment in Kloud.co. He continues to talk to investors from his home base in Harlem, New York.

Anthony is back in New Jersey. He's also seeking funding and says his Playd app will be available in the Apple app store by the end of the year.

After the accelerator ended, Pius and Becky moved to San Francisco. This fall, two funders invested an undisclosed amount in their start- up, BeCouply. One of those investors, Mitch Kapor.

And in September, Angela Benton moved to Silicon Valley with her three daughters. She put her start-up on hold and is planning the second edition of the NewME accelerator program set to start in early 2012. This time, she says, she wants to include more women and other underrepresented minorities.

(On camera): A lot of people have complained about the issues of a lack of diversity in Silicon Valley. But nobody else created an accelerator to fix it.

BENTON: When I think about my life, being pregnant at 15, all of the circumstances that I've had in my life are really just similar to what I did with the accelerator. Like, literally, it's just problem and solution. And the solution is thinking of things creatively. Not the same way that, you know, anyone else would think about it.

I think a lot of people talk. It's easy to talk. It's hard to do.