"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,
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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 google.com, 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 grants.gov.
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 FundBlackFounders.com.
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.