On January 11, Monique Rodriguez, founder and CEO of multi-million dollar natural hair care brand Mielle Organics, announced that she had sold her company to P&G Beauty, sending Black Twitter into a frenzy. Although Rodriguez and her husband will remain CEO and COO of the brand, some consumers are upset that it is no longer owned by blacks.
“I don’t want to hear anything about support for black businesses because second black businesses get all the support they need from the black dollar, they hand it all over to the person with the biggest check,” one Twitter user said.
For black founders, success in business can be a double-edged sword. Some would consider selling your business – often for millions – a major achievement, but black founders are continually scrutinized by their peers and clients for making that 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 industry when his product, Shea Moisture, hit shelves in 2008. However, when Dennis sold the brand to Unilever in for about $1.6 billion, it was called a sellout.
Rodriguez views the move she and Dennis made as a “sale” — not a sale — and says the backlash is due to a general lack of knowledge about what goes into 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…that when we’re on the shelves at retailers, we have to fight for our turf against these big corporations. Our community doesn’t know what we’re going through as owners of business.”
“We were nervous when we talked about our deal.”
Rodriguez and many other black founders share a similar path to getting their business off the ground – depleting savings and reinvesting all the money earned back into the business.
“Being a black woman starting a business, the banks don’t believe in you. You haven’t proven yourself, so investors don’t really believe in you. [either]. So I had to start, use my paychecks and my husband’s bank account…all would go to the business.
While Rodriguez made it work, in the long run, she knew that continuing like this wouldn’t be sustainable. But with the success of its products, it began to attract the attention of investors, and in 2021 it got its first “landmark deal”: $100 million in funding from Berkshire Partners, a private equity firm – a feat she was hesitant to share.
“We were nervous when we talked about the Berkshire deal because we were afraid the community would look at us like, okay, they’ve partnered with this so-called white company, but people make that assumption because ‘they don’t understand business.
sell against sell
This term has been loosely used by many black consumers when black entrepreneurs partner or sell their businesses to large, usually white-owned conglomerates. Yet the pool of black-owned conglomerates is thin, often leaving them with no other choice.
“If there were black conglomerates and big black private equity firms and partnerships that allowed them to inject capital and allow us to grow, we would go to those black companies,” Rodriguez said. “But if you can think in the universe, where are these companies? There are none. So where do we go to get the money and the capital to grow?”
Rodriguez says that rather than labeling these entrepreneurs as sellers, people should view partnerships, investments and acquisitions as selling opportunities.
“It’s not about selling, it’s about selling in order to grow and scale your business…in order to take that wealth and give back to the community.”
Using Shea Moisture as an example, Rodriguez explains that despite the backlash, the brand still operates on the foundations established by Richelieu Dennis, and since the acquisition he has been able to launch the New Voices Fund, a venture capital firm dedicated to supporting contractors. of color and invest in many black-owned businesses.
The importance of an exit strategy
Having a successful business is a major achievement, but who’s to say a person wants to own a business for the rest of their life?
“Some [entrepreneurs] may have a goal of running a business forever, or just like every individual in their career, may want to try new things and pivot,” says Angelina Darrisaw, career coach and diversity expert. “Black business owners should have the ability to do that too.”
The choice to sell a business is rarely made on the fly, according to Darrisaw, who says “one of the main things in any business course, or even when writing your business plan, that a founder will be asked to take into account is what is their exit strategy?
“For founders like Monique, it’s important to have long-term exits…to be able to have a larger pool of wealthy people who can support, help raise funds and invest in other businesses so we don’t see more those grim statistics, love Less than 1% [of Black founders] to be able to get $1 million in investments. Successful black founders therefore need exits so that they can inject capital back into our communities over time.”
Ahead of the announcement of the P&G Beauty acquisition, Mielle Organics went viral after a white influencer, Alix Earle, encouraged her followers to buy the brand’s mint and rosemary oil. As a result, the product flew off shelves nationwide, making it difficult to access for black women who depended on it.
Rodriguez’s exit as owner will not only “accelerate” the brand’s access to more black women, but Mielle and P&G have both pledged $10 million to expand the impact of the Mielle Cares charity, which provides education, economic opportunity and business assistance to black communities.
Rodriguez urges people to celebrate black founders who achieve these milestones, instead of tearing them down.
“We can’t move forward as a community if we continue to speak badly against people who make wise and strategic decisions to grow their business and create generational wealth in their communities. So I think we just need to normalize partnerships We need to normalize these collaborations and praise these brands for doing things and selling to create wealth and to come back and help the black community.”
Check:
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