According to 2023 Census data, more than two million Black-owned businesses exist in America. When social justice movements surged in 2020, Black-owned companies and their founders were amplified like never before and finally recognized for their community contributions.
Fast forward a few years, and that impact is still visible. A 2021 survey published by McKinsey and Company found that almost half of the consumers in the U.S. believe that companies should pledge support to Black-owned brands, suppliers, and vendors. Still, navigating the business landscape isn't always easy for Black founders.
The Black Entrepreneurial Gap
Dr. Anne Beal, the founder of Absolute JOI, tells us that Black women typically experience the most challenges when starting businesses. "Black founders—especially women—have more challenges getting investments to start and grow their businesses. In 2021, less than 0.3% of venture dollars went to Black women, even though they are most likely to start businesses," she says. According to Beal, a large portion of a brand's investment dollars go to advertising without any capital, so "many Black-owned businesses need to be creative to raise awareness about their brands." This oftentimes creates a challenging journey for Black business owners to scale their brands without the help of investments or acquisitions.
The Acquisition Landscape
Earlier this year, Proctor and Gamble Beauty (one of the world's leading beauty companies) acquired Mielle Organics. The acquisition will expand access to the brand's range of hair products for consumers worldwide. News of the acquisition was generally celebrated, while some consumers expressed concerns about product formulation changes, accessibility, and more.
The acquisition is significant for Mielle, whose co-founder Monique Rodriguez started making natural hair concoctions in her kitchen. Now, you can find the brand's products in 87 countries and more than 100,000 stores across the U.S., such as Ulta Beauty, Target, and Walmart. Mielle's partnership with P&G will only expand this reach. "This partnership gives Mielle an opportunity to serve more textured hair consumers with the great products and formulas that our community loves," Rodriguez said in a statement.
Still, it didn't stop consumers from maligning the brand's decision to "sell out" to the conglomerate. A similar discourse was present when brands like Shea Moisture and Carol's Daughter were acquired by Unilever and L'Oreal, respectively. Consumers were concerned that the products and formulations they relied on would change as brands and audiences grew. For founders, partnerships like Mielle, Shea Moisture, and Carol's Daughter meant vastly scaling their businesses, access to innovation, and resources to continually serve their communities.
Most big business decisions have risks for brand founders and consumers. Still, giving Black founders the support they need to reach their goals and realize their dreams creates an opportunity for them (and businesses to come) to learn and thrive. Ahead, we spoke to three Black beauty and wellness founders about their business journeys and what's missing from the conversation around Black entrepreneurship.
What's Missing, According to Black Beauty Founders
Dr. Anne Beal, founder of Absolute JOI
Beal's journey with Absolute JOI began when her daughters sought ways to effectively care for their sensitive skin. She realized she needed guidance on developing a routine that worked and decided to take a different approach. Beal used her 30 years of medical experience to create Absolute JOI, a skincare brand offering high-quality, science-backed solutions that celebrate Black skin.
"Being an entrepreneur is different from having a regular job; it requires a lot of courage and hard work. Some people don't understand what is required to be a successful entrepreneur. There has to be a plan to grow and then, ultimately, exit your business. I recall Lisa Price saying: 'I can't do this forever!' Every business created needs to have a plan in place for the founders to exit eventually, and one of those plans can be to get acquired and let someone else take over.
Mielle Organics was a great example of a Black-owned company demonstrating enough value for acquisition. It serves as a reminder that businesses targeting the needs of Black consumers can be desirable options for investment and growth.
If you want to raise questions about choices made by Black founders, do it in the spirit of making things better. Also, ensure you are as critical and vocal in your critique and questions for Black founders as you are for non-Black founders. We are a community, but people sometimes have high expectations for Black founders that they don't have for others."
Melissa Butler, founder of The Lip Bar
After being frustrated by the need for more diversity in the beauty industry, Butler noticed a gap in the market for an inclusive brand, so she started The Lip Bar from the kitchen of her Brooklyn apartment in 2012. The brand's personal and knowledgeable approach to beauty has gained them tons of dedicated customers.
"Our community believes in the idea of 'selling out,' and it's unfortunate because founders of other races don't experience this. We often think that things change for the worse when Black brands sell. History has not given us reason to believe that Blackness will remain centered once certain brands are acquired, but that doesn't have to be the case, and history doesn't have to repeat itself. It's also important to understand and acknowledge how limiting it is for Black brands and business owners to only sell to Black people.
"The reality is, Black consumers are not exclusively shopping Black businesses. Black people are the largest purchasers of beauty products, and we're outpacing our counterparts each year. That said, very few of those dollars go to Black businesses, and the reality is Black businesses own a small market share. Ultimately, I hope we learn to give each other more grace and appreciate that when Black founders sell, we pour back into our communities and create generational wealth for our families."
Necole Kane, founder of My Happy Flo
Necole Kane is best known as a successful celebrity blogger and media mogul. After years of catering to women with her lifestyle platform, xoNecole, she launched My Happy Flo in 2021. My Happy Flo is a supplement that helps women balance their hormones to reduce the risk of reproductive conditions and encourage healthy menstrual cycles.
"Anytime a Black founder can raise significant capital and scale their businesses, I consider it a win and another broken glass ceiling. I understand the concerns of consumers regarding formula and product changes when a brand sells. Still, a lot of criticism comes from people who don't understand the nature of this business.
"Most founders who sell their businesses are in tremendous debt at the time of the acquisition, and that's the sad reality. Tristan Walker sold his company to P&G and has been open about his mental health struggles and financial difficulties while running Bevel.
"We will start generating wealth in our community when companies can sell and then pour back into other Black businesses like Richelieu Dennis from Shea Moisture, Courtney Adeleye from The Mane Choice, and Monique Rodriguez from Mielle were able to do. After selling their businesses to fund other companies in the Black community, they all established funds. Rich Dennis' fund invested in brands like The Lip Bar, The Honey Pot, Slutty Vegan, and even Mielle to help them thrive.
"As a community, more conversations should be around scaling businesses, valuations, raising capital, and exit strategies. There are a lot of discussions about starting your own business but only a little education around scaling those businesses into legacy brands and companies that are around for 100 years or more. Many of these acquisitions (and those to come) open the door for those conversations."