CATALYZING GROWTH FOR WOMEN OF COLOR ENTREPRENEURS
CASE FOR SUPPORT
THE NEED
Black and Brown women entrepreneurs are the fastest growing entrepreneurs in our region and across our country. Yet, Black and Brown women are underrepresented in business ownership and face additional systemic barriers to accessing capital due to historical disinvestment in Black and Brown women. There is a vast body of evidence highlighting the injustices that Black and Brown women face. Approximately 90 percent of women-owned businesses are one-person entities. Women-owned small businesses start small and stay small because they've lacked access to the capital, markets and networks to grow [1]. The global financing gap for women entrepreneurs is well over $300B [2]. Further, Black and Brown women face a 90% wealth gap, receive 0.0006% of all venture capital financing [3], battle a widening wage gap despite comparable educational attainment, are less likely to own or inherit high-return assets, and face a substantial housing gap [4].
[1] US Chamber of Commerce Foundation, 2021
[2] International Finance Corporation, World Bank Group, 2017
[3] Project Diane, 2020
[4] Goldman Sachs, 2021
THE OPPORTUNITY
Investing in women-led businesses would make for not only a fairer, but also a richer society. Goldman Sachs reports that overcoming the aforementioned inequities for Black and Brown women would create up to 1.7M jobs for the US economy [5]. If men and women participated equally as entrepreneurs, global GDP could rise by $5 Trillion [6]! When women hold more executive leadership positions, their companies are more profitable. Companies in the top-quartile for gender diversity on executive teams are more likely to outperform the national average. Investments in women will have a ripple effect in their families and the world around them. Many women are more likely to reinvest their earnings into their family and local community, as 80% of all consumer purchases are directed by women [7]. 84.4% of Black mothers were primary, sole, or co-breadwinners in 2017, compared with 60.3 percent of Latina mothers and 62.4 percent of white mothers [8].
[5] Goldman Sachs, 2021
[6] Boston Consulting Group, 2019
[7] Working for Women, 2019
[8] Center for American Progress, 2019
EQUALIZING ENTREPRENEURSHIP
To address persistent gender and racial injustices and foster a stronger local and regional economy, Mom Your Business, Zenith Wealth Partners, and WOMEN’S WAY hosted The Raise Roundup, a local pitch competition that awarded $150,000 to early stage, Philadelphia metro-based, women of color (WOC) – owned businesses. This initiative illustrated our collective’s commitment to developing Philadelphia's ecosystem of women owned businesses by showcasing, inspiring, and investing in Philadelphia's entrepreneurial community for women of color, and learning what WOC entrepreneurs need to grow and sustain their businesses.
The Raise Roundup applicants and finalists told us that they need both investment capital and other resources to grow their businesses. Many women of color in our region do not have early-stage risk capital to be able to experiment and find their market fit. They also need support in areas such as marketing and strategic partnership development, human resources, use of technology, financial management and leadership development. We are also learning the deep impact financial investments of $25,000 to $50,000 make on their companies.
The Phirst Market Ventures Fund Structure
PARTNER ROLES
WOMEN'S WAY
Primary Roles: Help raise capital and help manage investor relations.
WOMEN’S WAY is the Philadelphia region’s leading nonprofit organization dedicated to the advancement of women, girls and gender equity. WOMEN’S WAY inspires, mobilizes, and unites organizations, generations, and individuals to cultivate high-impact philanthropy across the Greater Philadelphia region to achieve gender equity for all. Since its founding in 1977, WOMEN’S WAY has helped more than 25 million women and girls obtain safety from gender-based violence, gain access to reproductive health and quality healthcare, secure leadership positions, and advance their economic status.
Mom Your Business
Primary Roles: Provide supportive services in marketing, legal, founder coaching, technology development, sourcing and fundraising.
Mom Your Business has a mission to help Black and Brown female entrepreneurs achieve exponential business growth through mentoring, education, coaching and advocacy. It’s programming includes Think Tanks, retail pop ups and its signature program; Founders to Funders Cultivating Female Startups. In less than one year, Mom Your Business has helped Founders to Funders businesses raise over $30,000 in non-dilutive capital.
Zenith Wealth Partners
Primary Roles: Help raise capital, source, and perform due diligence on companies.
Zenith Wealth Partners is a state registered investment advisory firm headquartered in Pennsylvania that deliver discretionary investment management and financial planning services to individuals, families, business owners, and organizations. Their services provide a platform to share learnings and advice that can address wealth inequalities that exist with race, gender, and age through educational partnerships and impact investing. Zenith has a goal to attract, train, and promote young financial advisors and planners of color alongside a goal to invest and support minority-owned small businesses.
Fundraising Goal
Our goal is to raise $2 million by 2023. We plan to launch the Phirst Market Ventures in the fall of 2022 when we have secured $500,000 that will be used to award ten $50,000 grants to ten WOC-owned businesses. An additional $500,000 will be distributed to these companies in the form of follow-on equity investments, if appropriate. Our goal to is leverage the initial investments of $1 million to drive more capital to these companies based on growth metrics.
WOMEN’S WAY will take the lead by investing 90% of its annual 4% spending rate distribution from its investments for a total of $100,000. We are looking to partner with other non-profits and foundations that have endowments to invest at least 5% of their annual investment distribution to this fund. We are also looking for individuals who are passionate about Black and Brown women-led businesses and want to create a regional equitable ecosystem where all businesses can grow and thrive
