Black Women Entrepreneurs: An Upward Trend?
“I wanted my daughter to know from her earliest memory… That her hair was magnificent.” As Kameese Davis, an entrepreneur from Birmingham walked into the Dragons' Den to pitch her line of hair care products, Nylah’s Naturals, emotions ran high. In the post pitch question session from the dragons and the nation held its breath, rooting for this “mumpreneur really going places.”
Kameese Davis started her business from the ground in order to fill a gap she saw in the haircare market. In the episode she walked away with dragon Sara Davies investing £50,000 into her company and supporting the next chapter of Kameese's entrepreneurial journey. It was clear Davis’ success on the show came down to her passion and determination to succeed alongside her track record of solid sales in the past few years, despite the impact of the pandemic on numerous businesses.
This made me think: are Black women entrepreneurs on an upward trend or are the barriers to successful business growth proving to be a large obstacle for many aspiring Black women?
On the same day that Davis’ pitch to the dragons aired on BBC one, the European Forbes 30 under 30 list was released, awarding several Black women a place on the prestigious magazine. Black women such as Fisayo Longe (Kai Collective), Lungile Mhlanga (Treats Club), Jedidiah Duyile (Loudbrand Studios) and Nicole Crentsil (Black Girl Fest) boldly took their place on the esteemed list and continue to grow within the world of business.
Whilst we celebrate the initial successes of these incredible Black women and their business ventures, we must acknowledge the bleak reality for many Black people seeking investment to grow, develop or fund businesses. According to The Black Report by 10x10 and Google, 88% of black founders used their own money or the investment of family and friends to finance their businesses, due to an inability to access venture capital investment. This was the case for Davis in the first few years of Nylah’s Naturals, as she self-funded the initial stages of the business.
Fisayo Longe’s Kai Collective launched manufacturing in 2016, following a loan from her mother to scale up her business. Longe’s social media following eventually led to one of her dresses going viral a few years alter. Lungile Mhlanga, founder of Treats Club dessert bar, another Black woman to make the Forbes 30 Under 30 list, started and continues to run her business with no outside investment.
Oftentimes, Black entrepreneurs experience the poorest outcomes when it comes to seeking investment. They are regularly underfunded and whilst statistics sometimes look at Black people as a single entity, when these figures are broken down to also look at gender disparities the picture is almost even more diabolical for Black women. A report conducted by Extended Ventures found that an appalling 0.02% of overall funding went to Black female entrepreneurs (2009-2019). These figures highlight a clear barrier to Black women succeeding in business in a similar way to their white or male counterparts. Business trends suggest that Black women often start companies based on necessity. Nylah’s Naturals is a clear example of this, as Kameese Davis wanted to create a product to help her daughter on her natural hair care journey as well as fill a gap in the market for good quality, vegan hair products, backed by science.
In a pre-pandemic America, Black women entrepreneurs were a very clear upward trend. However, the lack of investment opportunities led to a lack of scalability and Black women’s businesses statistically remained 5 times smaller than all women-owned businesses.
So what is the solution to the lack of funding opportunities for Black women entrepreneurs? Questions surrounding who decides who gets investments is a great place to start. It’s estimated that less than 1% of decision-making VCs are Black. This on the surface does not pose a problem, as we know that Black faces in high places does not always translate to positive outcomes for Black people. However, when Kameese Davis stepped into the Dragons' Den it was clear that the dragons were not aware of the fact that the Black haircare business is valued at £1.72 billion (in UK in 2019) despite the fact that Black women account for only 4% of the women in Britain.
This single example highlights the missed opportunity to invest in a product that had already made a mark in the black haircare space winning industry awards for afro and curly hair types.
Can Black women entrepreneurs continue on an upward trend if the landscape of VC investment does not better reflect or represent Black women? Or will Black women continue to provide the capital to fund their own ventures?
Written by Deanna Lyncook