January. On Sept. 11, Monique Rodriguez, founder and CEO of multimillion-dollar natural hair care brand Mielle Organics, announced she had sold her company to Procter & Gamble Beauty, pushing Black Twitter into the crazy. While Rodriguez and her husband will continue as CEO and COO of the brand, some Consumers were upset to see that it was no longer owned by black people.
One Twitter user said: “I don’t want to hear anything about supporting black businesses because the second batch of black companies get all the support they need from black dollars and they give everything to whoever gets the most checks. “
For black founders, business success can be a double-edged sword. Some would consider selling your company (often for millions of dollars) a major achievement, but Black founders are constantly scrutinized by peers and clients for making this choice.
Another Black entrepreneur faced a similar backlash in 2017. Richelieu Dennis is the co-founder of Sundial Brands, which revolutionized the natural hair care business when his product Shea Moisture hit store shelves in 2008. However, when Dennis sold the brand to Unilever for an estimated $1.6 billion, he was dubbed a sellout.
Rodriguez dismissed her and Denise’s move as a “sellout” — not a sellout — and said the backlash was due to a lack of general knowledge about building a business.
“People don’t understand how hard we work as business owners,” Rodriguez told CNBC Make It. “People don’t understand what it takes to scale… When we’re on the shelves at retailers, we have to fight for our territory when we’re going up against these big corporations. Our community doesn’t know what we’ve been through as business owners .”
“We were nervous when we talked about our deal.”
Rodriguez and many other black founders followed a similar path to entrepreneurship — draining their savings and reinvesting the money they earned back into the company.
“As a black woman starting a company, the banks don’t believe in you. You don’t prove yourself, so investors don’t really believe in you [either]. so I have to fend for myself, using my paycheck and my husband’s bank account…everything will go to the business. “
While Rodriguez is making it work, she knows it’s not sustainable in the long run. But with the success of the product, she started to get the attention of investors, and in 2021, she won her first ““Historic” deal: $100 million in funding from private equity firm Berkshire Partners — a feat she won’t share.
“When we talked about the Berkshire deal, we were nervous because we were worried that the community would see us like, well, they’re working with this so-called white company, but people make that assumption because they don’t understand business”
sell and sell
Many black consumers loosely use the term when black entrepreneurs partner with large businesses (often white-owned) or sell their companies to large conglomerates. However, black-owned conglomerates are smart and often leave them no choice.
“If there are black conglomerates, and black big private equity firms and partnerships, and we can get them to inject capital and let us grow, we’re going to go to those black companies,” Rodriguez said. “But if you can be in the universe Thinking, where are those companies? No. So where do we go to get funding and capital to scale?”
Instead of labeling these entrepreneurs as short sales, people should look at partnerships, investments and acquisitions as opportunities to sell short, Rodriguez said.
“It’s not about selling out, it’s about selling to grow and expand your business … to take that wealth and give back to the community.”
Citing Shea Moisture as an example, Rodriguez explained that despite the backlash, the brand is still operating on the basis set by Richelieu Dennis, who since the acquisition has been able to launch the New Voices Fund, a venture capital dedicated to supporting entrepreneurs The company has people of color and invests in many Black-owned businesses.
The importance of an exit strategy
Owning a successful business is a major achievement, but who’s to say that one wants to be a business owner for the rest of their life?
“Some [entrepreneurs] There may be goals of running a business forever, or like everyone in their career, may want to try new things and pivot,” says career coach and diversity expert Angelina Darrisaw.” Black business owners should be able to do that too. “
According to Darrisaw, the choice to sell a business is rarely made in a hurry, saying, “One of the main things in any business course, even when you’re writing a business plan, is to ask founders to think about their exit strategy. what?”
“For founders like Monique, the exit is important in the long run … to be able to have more high net worth individuals who can support, help with fundraising and invest in other businesses so that we don’t see These dismal stats are off, like less than 1% [of Black founders] Able to secure $1 million in investment. Therefore, successful Black founders need to exit in order to be able to reinvest the money back into our community over time. “
Before announcing its acquisition of P&G Beauty, Mielle Organics went viral after a white influencer, Alix Earle, encouraged her followers to buy the brand’s rosemary peppermint oil. As a result, the product was quickly pulled from shelves across the country, making it inaccessible to the black women who depended on it.
Not only will Rodriguez stepping down as owner “accelerate” the brand’s reach to more black women, but both Mielle and P&G have pledged $10 million to expand the impact of the Mielle Cares charity, which provides education, economic opportunity and business relief to the black community .
Rodriguez urged people to celebrate the black founders who achieved these milestones, not destroy them.
“We can’t make progress as a community if we continue to have bad conversations with people who are making smart strategic decisions to grow their businesses and create generational wealth in their communities. So I think we need to make partnerships Normalize. We need to normalize these collaborations and congratulate these brands for doing things and selling to create wealth and give back and help the black community.”
Check:
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