April 8, 2020

Buying Black, Rebooted

Access to capital is a recurring barrier to growth for businesses of all stripes, but traditional financing options are especially difficult for black owners. When black entrepreneurs do get loans, they tend to receive lower amounts and at higher interest rates than other groups.

Black women, the fastest growing segment of business owners, are the least likely to receive investments from venture capitalists. They account for less than 1 percent of the $424.7 billion raised in tech V.C. funding since 2009, according to the 2018 Project Diane study conducted by DigitalUndivided, an organization that empowers women entrepreneurs of color.

Michelle Dalzon is confronting this reality as she plans the next phase of the Black-Owned Market, or theBOM, her three-year-old pop-up. Ms. Dalzon put on her first event in New York in December 2016 without sponsors. It was a huge success — guests came from as far away as Ohio to shop — but it depleted her savings.

“That whole market, altogether, was, like, $16,000 that I have not recouped yet,” she said.

Since then, Ms. Dalzon has worked with brands like Airbnb, Blavity and Jack Daniel’s, and introduced a pop-up experience in Boston as well as an e-commerce site. But now that the pop-up field has become oversaturated, Ms. Dalzon wants to build a permanent market that could be a multiuse space catering to black-owned brands.

Instead of going the V.C. route, Ms. Dalzon has opted for angel investment.

“It’s important for me to make sure they’re the right investment partners for theBOM,” she said. “Not everyone who is willing to give you money is going to be the right partner.”

“Once you take V.C. funding, the clock starts ticking,” she continued. “You have eight to 10 years to get your start-up in a position to sell. I’m not sure if I want to sell, or if it’s something that I want to keep in my family for generations.”

Article source: https://www.nytimes.com/2019/12/25/style/buying-black-rebooted.html?emc=rss&partner=rss

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