Yahoo Finance Black Girl Ventures CEO on how to start a business: ‘Revenue is your validator’
Lack of access to capital is a major impediment to women who want to start a business. Less than 1% of Black founders receive venture capital funding, according to the Transparent Collective, a non-profit group that tracks funding sources for minorities at the early stages of their startups.
Fully aware of this challenge, Shelly Bell launched Black Girl Ventures in 2016 to help minority women find capital to launch their businesses. The organization offers women fee-based learning experiences and coaching, and facilitates peer-to-peer mentoring.
Bell’s advice to women hoping to launch a successful business: “Revenue is your validator.”
“A lot of times, we listen to our third cousins and favorite aunts about how to run businesses, and they have never run a business,” Bell told Yahoo Finance. “So don’t use those voices to validate you. Build something, concentrate on it, be agile, and revenue is your validator.”
In four years, Black Girl Ventures, headquartered in Washington, DC, has raised over $2 million from sponsors including Goldman Sachs, Visa, and PayPal. In turn, BGV has directly funded 130 women founders.
Bell encourages women to first test their business ideas online to gauge which ones could become revenue generators. “The internet has created a large opportunity for us to be able to go direct to consumer…and figure out what really works...to bring in capital,” said Bell.
Black Girl Ventures holds Shark-Tank-meets-Kickstarter pitch competitions online at SheRaise.com and in Washington, D.C., Baltimore, Philadelphia, Atlanta, Chicago, and Austin to help aspiring business owners access crowdfunding. “The audience actually goes into their own pockets and gives that capital,” said Bell, highlighting the value of grants. Aspiring business owners who pitch successfully can receive funding from regular folks in the audience, wealthy donors, and some of BGV’s own sponsors.
“We’ve been working hard and diligently to [circumvent] some of the long drawn-out processes that it would typically take...to get access to capital because we recognize that these micro infusions of capital are really...the point,” said Bell.
Forty-one percent of Black-owned small businesses in the U.S. shut down permanently in April as a result of the pandemic, according to the New York Fed.
Bell has heard first-hand accounts of Black small-business owners devastated by the pandemic. “We hear the stories of ‘hey, I lost two months of customers in one day. I’m having to shut down my physical dance studio, my physical store because there’s not enough foot traffic,” she said.
Bell is optimistic that President-elect Joe Biden’s administration will support Black-owned small businesses amid the pandemic. Many were shut out of the Paycheck Protection Program as banks prioritized well-resourced companies.
“I’m hopeful,” said Bell. “I’m also – like I would be of any administration – critical [in] noting that the Black community is still saying, ‘you know, where are the opportunities for us still,’ right? We’re so innovative about so many things. However, our country just somehow has not figured out equity.”
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