On January 11, Monique Rodriguez, founder and CEO of a multi-million dollar natural hair care brand, announced that she had sold her company to P&G Beauty, sending out a Black Twitter post. fit. Although Rodriguez and her husband will remain the CEO and COO of the brand, some will Consumers are upset to see that it is no longer owned by blacks.
“I don’t want to hear about subsidizing black companies because second black companies get all the support they need from the black dollar, they hand everything to the person with the biggest check,” said one Twitter user.
For black founders, success in business can be a double-edged sword. Selling your company — often by the millions — might be considered by some to be a great achievement, but black founders are constantly 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 natural hair care when his Shea Moisture product hit shelves in 2008. However, when Dennis sold the brand to Unilever in exchange for $1.6 billion was called up for sale.
Rodriguez views the move she and Denise made as a “sale” — not a sale — and says the backlash is due to a lack of general knowledge about what goes into building a company.
“People don’t understand how hard we work as business owners,” Rodriguez told CNBC Make It. “People don’t understand what it takes to expand… when we’re on the shelf at retailers, we have to fight for our territory when we’re up against these big corporations. Our society doesn’t know what we’re going through.” us as business owners.”
“We were nervous when we talked about our agreement.”
Rodriguez and many other Black founders share a similar path to launching their businesses — exhausting savings and returning any money made back to the company.
“Being a black woman and starting a company, 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 level the ground, use my paycheck and my husband’s bank account… everything would go to work. “
While Rodriguez was working, in the long run, she knew that going on like this wasn’t going to be sustainable. But with the success of its products, it started to attract the attention of investors, and in 2021, it got its first products.”Historic deal: $100 million in financing from Berkshire Partners, a private equity firm — an achievement she was reluctant to share.
“We were worried when we talked about the Berkshire deal because we were afraid that society would look at us like, well, they partnered with this so-called white company, but people make that assumption because they don’t understand business.”
selling vs. selling
in this bookSellout: The Politics of Racial Betrayal,” explains author and Harvard Law Professor Randall Kennedy, a sellout is someone who “betrays something to which they are said to owe loyalty.” When used in a racial context among African Americans, “selling out” is a derogatory term referring to blacks who willfully or grossly negligently act against the best interests of blacks as a whole.
The term has been loosely thrown around by many black consumers when black entrepreneurs partner with or sell their companies to large conglomerates—usually white-owned. However, the pool of black-owned conglomerates is minimal, often leaving them with no other choice.
“If there were black conglomerates, big black private equity firms, partnerships that allowed them to inject capital and allow us to grow, we would go to those black companies,” Rodriguez says. “But if you can think within the universe, where are those companies? There aren’t any. So where do we go to get the money and the capital for expansion?”
Instead of labeling these entrepreneurs as sell-outs, Rodriguez says, people should view partnerships, investments, and acquisitions as sell-out opportunities.
“It’s not about selling, it’s about selling in order to grow and scale your company… 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 laid out by Richelieu Denis, and since the acquisition, he’s been able to start New Voices Fund, a venture capital firm dedicated to supporting entrepreneurs of color, and investing in many black-owned companies.
The importance of an exit strategy
Having a successful business is a huge accomplishment, but who is to say that a person wants to be a business owner for the rest of their life?
“Some [entrepreneurs] “Her goal may be to run a company forever, or just like everyone in their career, she may want to try and debate new things,” says Angelina Darreso, career coach and diversity expert. This please.”
Rarely is the choice to sell a business right away, according to Daricao, who says that “one of the key things in any business cycle, or even as you write your business plan, that the founder will be asked to consider is what is their exit strategy?
“For founders like Monique, having exits is important in the long run… being able to get a larger group of high net worth individuals who can offer support and help raise money and invest in other businesses so we don’t see these grim statistics yet.” Now, like less than 1% [of Black founders] The ability to secure investments of one million dollars. So successful black founders need exits so they can inject capital back into our communities over time.”
Before the announcement of the P&G Beauty acquisition, Mielle Organics went viral after white influencer Alix Earle encouraged her followers to buy the brand’s Rosemary Mint Oil. As a result, the product flew off shelves across the country, making it difficult for black women who depended on it to access it.
Rodriguez’s exit as owner will not only “accelerate” more women of color’s access to the brand, but Millie, Brute and James each pledge $10 million to expand the impact of the charity Millie Cares, which provides education, economic opportunity and business relief to black communities.
Rodriguez urges people to celebrate the black founders who achieved these milestones, rather than undermine them.
“We can’t move forward as a society if we continue to speak badly against people who are making wise, strategic decisions to grow their businesses and create wealth for generations in their communities. So I think we just need to normalize partnerships. We need to normalize these collaborations, and congratulate these brands for doing things and selling them.” To create wealth and give back and help the black community.”
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