InvestFest inspires Black entrepreneurs who often face seed funding obstacles
Even with a good product, finding seed money and investments to scale a business can be an uphill battle for Black entrepreneurs.
Only 1.2% of venture capital is funding Black entrepreneurs, according to Crunchbase, which collects data on early-stage startups, with Black women founders receiving just 0.27% of funding.
"Understanding the financials and scalability is important to build and grow," Monique Rodriguez, CEO of Mielle Organics, told Yahoo Finance. "Getting the business off the ground there was a lot of bootstrapping with no initial seed money because we don't have the same access, opportunity, resources, or funding to even get started."
That is the importance of Rashad Bilal and Troy Millings's InvestFest, a financial festival in its third year. Attendees heard from entrepreneurs like Rodriguez on how she scaled her company, empowering aspiring Black entrepreneurs with the financial tools and knowledge with a message of collective economics to build generational wealth.
"Witnessing over 20,000 individuals come together underscores the urgency to create platforms that uplift and educate, which is why InvestFest was created — to transform lives, spark conversations, and drive change," Millings said.
Starting small and scaling up
Rodriguez’s journey to entrepreneurship was an outgrowth of grief. After the loss of a child, she posted hair and beauty recipes on social media as a creative outlet and distraction.
When people asked to buy the products, Rodriguez hired a chemist because she needed a healthy preservative to make her products shelf stable. That’s how her journey into entrepreneurship began.
"I did not make any money off the business for probably the first year because everything that we sold, we invested that back into inventory, marketing, packaging, back into the business," Rodriguez said. "In 2015, we had an opportunity to get into retail and a family friend invested an initial seed of $250,000. In 2020, we needed to scale up and Rich Dennis from Shea Moisture was our first initial C investment raise that we did."
Dennis’s investment is an example of collective economics — of Black businesses investing in other Black businesses. When Dennis sold Shea Moisture, he purchased Essence magazine and invested in other Black businesses.
This year, Procter & Gamble (PG) acquired Mielle Organics with Rodriguez staying on as CEO and COO of the brand.
"In the Black community, we think that we have to own it, but scaling your company requires a lot more money that we don't have access to, so we have to take on acquisitions and partnerships to create longevity and legacy," Rodriguez said. "Because we had a very healthy company, I was able to negotiate the terms to stay onboard as CEO and COO, operating as a standalone independent subsidiary under Procter & Gamble."
Generational wealth and community investment
Creating access and opportunities for the community is also part of the origin story for Jomaree Pinkard, co-founder of Hella Cocktails, who received a capital investment from Pronghorn — a business dedicated to cultivating Black entrepreneurs in the spirits industry. Pinkard is now the CEO and managing director of Pronghorn.
"For the longest time, I've been working on community access to knowledge, but I never had access to a lot of capital until Pronghorn," Pinkard told Yahoo Finance. "In my role, I'm able to lead the team to unlock access for Black ownership in the spirits industry, building a template to diversify any industry economically and commercially. It’s not charity because investing in the underrepresented equals dollars and cents."
The spirits industry generates $353 billion in retail sales and the Black community consumes its proportion of $50 billion, but without ownership, Pinkard said.
"Pronghorn is here to create $2.4 billion of impact in the Black community in 10 years by investing in 57 Black-owned brands," Pinkard said. "It is an accelerator that invests in companies — identifying great founders with good liquidity — then we do a supercharger, getting in a shock position with them and helping them think through their playbook."
Pronghorn has invested $10 million in 20 Black-owned spirits brands, an investment that helps these businesses build generational wealth.
"When you think about creating generational wealth, you're able to do that by exiting and being acquired for large sums of money that can set your family up for generations to have the freedom and the flexibility to do what they want," Rodriguez said. "It's not for me to expect them to have the same drive and passion that I had for building Mielle because Mielle is my dream. But I can create an opportunity for them to follow their dreams."
Learning how Rodriguez and Pinkard scaled their business for growth and generational wealth is part of InvestFest’s motto of "assets over liabilities."
"My great-grandmother crushed sugar cane with machetes in St. Croix on a rum distillery that she wasn't able to accumulate wealth based on all that hard work," Pinkard said. "When we think about assets over liabilities, my great-grandmother is saying, you're the most precious asset and liabilities ain't got nothing on us."
Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda.
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