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 yo Tory, 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 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
"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 ask 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 parts, we
call 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 were discouraged from
applying altogether because you were 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. [MUSIC PLAYING] Hi, my name is Dr. Tye Caldwell. I'm the CEO and
co-founder of Shear Share. And I'm Courtney
Caldwell, co-founder and COO of beauty tech
startup Shear Share. We're the largest provider of
on-demand salon and barbershop space rentals worldwide.

Shear Share is the
first B2B mobile app that allows licensed beauty
professionals to connect to salon and barber
shop 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. Tye. Thank you both so much
for letting us drop in. I've got my pencil. I got my pad. Let's jump right into it. First question– why did
you start Shear 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 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 a suite
your 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 Tye came home and
told me about this random phone call. And I was like, babe, that
had to be a prank phone call. No one ever asks to rent space
by the day in our industry.

What was this lady thinking? Are you sure it was
even a real person? And he said– I would rather make something
rather than nothing. I called the young lady
back up the next day and decided to give it a shot. And 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 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
Shear 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. We did not know anything about
this VC world, 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 roomful of investors. In 2018, Shear 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 does what Shear Share does, we
went to Google first, right? We typed in,
and typed in some keywords to try to figure out– is
there an app that does this? 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, with 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
the little guy– has to go through every day. 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, or 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 Shear Share, again, through relationships,
through referrals, but we started receiving
clients through even pitch competitions. 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 Shear Share 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 will work. But pay extra close attention to
your financial summary, a.k.a. how will your business
actually make money? And funding requirements, a.k.a. 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
accomplish 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 give a
major shout-out to Google Demo Day. It's one of the big moves that
Shear Share used 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

This database displays all
the federal grant programs from every eligible US 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 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

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 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. [MUSIC PLAYING] Let's go to Texas. Let's go to Texas. Let's go to Texas. Let's go to Texas..

As found on YouTube

Visit my site for more!

Leave a Comment