Startup Funding for Black Entrepreneurs

If there is no struggle, there is no progress. And if you're a black entrepreneur who's ever tried to successfully secure startup funding for your business out here, then you probably know about that struggle all too well. But don't worry, there are plenty of solutions and I'm going to help you find them. I'm going to teach you what some of the true inequities are, give some advice from a company that found success in spite of that very struggle, and give you some sources that you can use to find funding. Now, my name is Tory and this is startup funding for Black entrepreneurs. Click the link in the description for resources that you can use to find funding after the video. If you like what you see and you want to hear more, subscribe and hit the bell to hear more. You may be watching this video and saying to yourself, hey Yotorrey, securing startup funding is hard for everyone. Why is it considered harder for black entrepreneurs and not just seen as bootstrapping? Well, for minority owned businesses with more than $500,000 in annual gross revenue, the the average loan amount is $149,000. Remember that. I'll tell you why in a bit. On top of the normal challenges of, you know, just starting a business, black business owners must also navigate a considerable funding gap between non minority and minority owned businesses. Funding gap? What's that? Well, according to a report done by the Federal Reserve on the topic of entrepreneurial inequality, it essentially states that in virtually every way that is possible to measure the there is a consistent gap between the financing that non minority small business owners receive and the financing that minority business owners receive. Now remember that number I asked you to hold on to? It was $149,000 as the average loan amount given to minority owned businesses with an annual gross revenue of $500,000. Right. Want to know the average of our white brothers and sisters, non minorities with an annual gross revenue of $500,000 report an average loan amount of $310,000 around these that the funding gap. This rears its ugly head in a bunch of ways for black entrepreneurs such as you getting more scrutiny when you're trying to apply for a loan. If you do receive support, you receive less financing less often at higher rates or you are discouraged from applying altogether because you are labeled a credit risk for these and so many other reasons. It's extremely hard for us to just walk in and secure adequate funding when we have an amazing business idea. So what do we do to start to answer that question? We're heading to McKinney Texas to check in on a business that can not only speak to the difficult journey to secure startup funding, but also how they overcame it with something that was right for them. Let's go to Texas.

Hi, My name is Dr. Ty Caldwell. I'm the CEO and co founder of Sher Share.

And I'm Courtney Caldwell, co founder and COO of beauty tech startup sheershare. We're the largest provider of on demand salon and barbershop space rentals worldwide.

Share Share is the first B2B mobile app that allows licensed beauty professionals to connect to salon and barbershop empty space. 40% of salon and barbershop space goes unused.

We help salon and barbershop owners make money on their excess capacity. And stylists all over the world get to rent professional space to work when they need it, where they need it.

Hey, Courtney, Dr. Ty. Thank you both so much for letting us drop in. I got my pencil, I got my pad. Let's jump right into it. First question, why did you start Seer Share?

They say that necessity is the mother of all invention, right? So my husband and I have been in the industry for many years.

We realized that licensed professionals didn't want to be, you know, bunkered down on a contract or a lease.

One day, out of the blue, like, completely out of the blue, a stylist called us and said, hey, I know about you guys. I've been to your website. I read about you in the community. I just need, like, a suite for Friday, Saturday. Is that even possible?

And at this particular time, I was like, who does that? Took it to my wife.

And I remember Ty came home and told me about this random phone call, and I was like, babe, that had to be a prank phone call. Like, no one ever asked to rent space by the day in our industry. Like, what was this lady thinking?

Are you sure?

Was it even a real person?

And he said, I would rather make something rather than nothing. Called the young lady back up the next day and decided to give it a shot.

And.

And, you know, in a matter of, I would say, weeks, we were helping her get into other salons and barbershops. Her friends were realizing that she was posting on social media. And we found ourselves doing this manually for three, three years before we finally.

Said, wait a minute, there's got to be an app for this, because there seems to be an app for everything else. And we couldn't find it. And so that was when Cher Share was born.

What was the hardest part of your funding journey as a black entrepreneur?

The hardest part? Not Knowing, not knowing that there are people out there that are called venture capitalists angels. We didn't know anything about that. Having my background as an entrepreneur, utilizing my own funds, making it work, I did not. We did not know anything about this VC world, this. This world of where people were able to give you money to fund your dream or fund an idea that they wanted to go on a journey with you with.

Is there anything that you learned specifically about being black on that journey to find funding?

Definitely. You have to realize that this is a uniform. This is what we wear every day. This is something we can't change. The only thing we have to do going into this is believing in ourselves. We knew how hard it was going to be. We've always known it would be difficult, even just going to banks asking for money.

Which brings us to Google Demo Day. Each year, Google brings together a group of investable companies from around the world and gives them a chance to pitch in front of a room full of investors. In 2018, share share not only got the chance to be invited, but you also received significant funding as a result. So I have to ask, Courtney, how was that experience?

I laugh at how kind of serendipitous it's all been because when we were looking for the app that that does what Share Share does, we went to Google first, right? We typed in google.com and typed in some keywords to try to figure out is there an app that does this?

Because.

Because we want to be able to share this if there is such a resource with other stylists who are going to call us to end up now being able to receive funds from Google's Black Founders fund. It's just a feeling unlike any other large of a company as Google is. They really understand that the best things kind of start small and they have startup blood running through their company culture. And so they get what the little guy, if you can call ourselves a little guy, has to go through every day. But. But to get the validation from Google, that was an immense boost to us.

Last question. What is your biggest piece of advice to potential black business owners in regards to startup funding?

You know, one thing that we did that we kind of just fell into is that we learned about pitch competitions. You know, that first referral again through relationships now led us to that very first pitch competition. And then we said, huh, well, I wonder if there are other things like this, events like this that would hear our great idea and want to give us money or if there was some kind of winning pot. And we did that. And so all along the way we built sheer share again through relationships, through referrals, but we started receiving funds through even pitch competition. So make sure that you're taking a look at all the opportunities that are around you, because they're there.

Another major shout out to Sears here for providing those thoughts and tips. Now let's combine those suggestions with my own special recipe and start to fund that startup. Get a Business Plan Together this is a basic outline of what your business is and how it'll work. But pay extra close attention to your financial summary AKA how will your business actually make money? And funding requirements AKA how much money do you need to make this thing happen and where will it go if an investor actually gives it to you? By truly hashing out those two points in an already tight business plan, it'll let whoever you're presenting this opportunity to see the value, risk and true potential of your idea look up and reach out to companies you admire and straight up ask how did you do it? Don't be shy. People love to tell you how they accomplished an impossible task. And you never know. Through that small connection you may just be adding to your network. Find Funding I know, I know. Easier said than done. But here are some resources that can help. First off, we have to get a major shout out to Google Demo Day. It's one of the big moves that Sher Share use to thrive. And if you're interested in applying to that journey, check out the link in the description. Grants if you're looking for grants, try grants.gov this database displays all the federal grant programs from every eligible U.S. agency. If you're looking for government grants, this website is the one. For loans, check out Founders First Capital Partners. They offer flexible revenue based loans loans for service companies led by minorities with a focus on preserving ownership. If none of these work for you and you require a bit more of a creative approach, try fundblackfounders.com this is the new Friends and Family round. It was started by a few black founders who were completely frustrated with the lack of funding resources afforded to black entrepreneurs. It's a crowdfunding platform doubling down on black founders resulting in the birth of more black businesses. This is a perfect fit for those looking for for non traditional funding. If you'd like more funding options, check out the link in the description for 31 funding resources you can use now. Those are my thoughts. So what are yours?

Comment below.

Let me know. Adios people. Until next time. Let's go to Texas. Let's go to Texas. Let's go to Texas. Let's go to Texas.