Is there a correlation between my identity and raising capital?
“So, I’m looking outside the window right now,” he says from his office in Harlem. “There’s food vendors, some guys selling oils and souvenirs. I don’t think there’s a lack of entrepreneurs here. It’s just that the bulk of the entrepreneurship culture in immigrant places and predominantly minority communities is not venture-backable.” ~ from an Interview with John Henry in The Atlantic
When I found this quote for the first time it validated all the feelings I’ve been having for the past few weeks. Even more so, it validated the revelation I had last week.
For a while now I’ve wanted to write an article about my frustrations raising capital as a minority, but every angle I explored felt like an attack on every VC and angel investor I’ve ever pitched. While I’ve got my qualms with the industry, the common denominator is still always me, so I let it sit. It wasn’t until I switched gears to run an investment crowdfunding campaign that it all just clicked.
Before we go any further, you should know a little more about me and what I’m building.
My company is called You & Sundry. It’s the first social parlor for the LGBTQ+ community: a hybrid space with wellness offerings and a members club experience. In our flagship location, we aim to progressively offer wellness services starting with personal care alongside a main lounge and event space serving drinks and food.
My background is far from hospitality. I’m a Webby-award winning designer and developer from Kingston, Jamaica. I’ve built products and experiences across the digital and physical sphere, and have built up a reputation for them. I’m also queer, black, and a woman.
Ok, now that you know more about me and the business I’m building, let’s dive in.
Six months ago, I set out on an adventure to raise venture capital for You & Sundry. I never thought I’d need or want to be on this path but the reality was, the space we wanted to build demanded more money than I could bootstrap.
Being a black, queer woman, I’ve seen the stats and already knew it would be an uphill battle. I decided to take a step back to really analyze why it’s been difficult for me. Apart from the fact that less than 1% of businesses ever raise capital from angel investors or VCs, there were two other reasons that stood out as to why it can be hard for a company like mine to raise money.
- If your idea just doesn’t scale at a VC level, you probably won’t get funded.
- If you don’t have a strong network, one that includes people with money or access, you probably won’t get funded…enough.
While on the surface these reasons are painfully obvious, I wondered about something deeper. Is there a correlation between my identity, my idea, and my network?
How my identity can sometimes limit my ideas.
As minorities, we are sometimes driven to solve issues within our own communities and our own reach first — which can seem small initially.
As a creator, my schtick has always been ‘scratching my own itch’. If I experience a problem in my own life, I’m driven to solve that problem. While I believe this is a great trait to have, it can sometimes be limiting from a business perspective. Let me explain. When it came time to raise money for You & Sundry, there was one concern I heard over and over again, “How will you achieve scale with this niche audience?”
Here’s what I believe. As minorities, we are sometimes driven to solve issues within our own communities and our own reach first — which can seem small initially. While our ideas have significant impact, they don’t hold the same value to those on the outside looking in. That’s understandable.
So here’s what I’ve learned. Until we’re able to show the potential and scalability of our ideas, no one (outside of our network and community) cares. Until we are able to pinpoint scale through the audience or the offerings, it will never be enough for an investor. And that’s okay. From their perspective, they’re trying to make a sizable return on their investment. Sure they may believe in what you’re doing and the mission, but the reality is, they have to make their money back plus some. Similar to a partner or a sponsor, if you can’t provide value, they probably won’t say yes.
It took me a long time to reconcile with this idea. I banked on the mission being the reason people would invest but the fact is, the mission got me pitch meetings but I needed the numbers to close the deal.
How my identity can sometimes limit my reach.
“It didn’t really matter what she was building, I was going to invest because I believed in her.”
After a few months of pitching to raise capital through angel investors and VCs, it became clear that this may not be the route I should be taking at the moment. The idea itself wasn’t the issue, it was showing the potential and scalability of the business that was still the missing link. Here’s another thing you should know about me, I think BIG. I have to experience all my ideas and watch them progress before I know what the far future holds. I can’t fake that nor do I want to.
So I decided to turn to other methods of raising capital where I would retain control over the business while we work out the kinks in our first location. And that’s how our Wefunder campaign came to be.
Wefunder is like Kickstarter, but for investing. I chose this route because anyone can invest as little as $100 on Wefunder. This opens up the option of investing to my network, the LGBTQ+ community and any individual who wants to be a part of what I’m building.
My network isn’t huge, but for what it is, it’s mighty. I realized this when they all showed up. The first week I started the campaign, we raised $20k. Though it felt small, when compared to 4 months and raising $0, it was a victory, and something dawned on me. My network helped me get there because they already knew what I was capable of.
I’ll never forget what one investor said to me about another founder they invested in. A founder they knew personally. “It didn’t really matter what she was building, I was going to invest because I believed in her.” Something we hear time and time again. And I believe the same is true for me. The only difference is, my network doesn’t consist of investors or people with deep pockets…yet.
While this is a function of my ability to build a network before I need it, I also think it’s a product of my identity. I’m not part of any affluent communities by default and I haven’t found a way into one naturally. As a result, raising money comes much harder for me.
Why my identity is the reason I’m going to win.
Despite all of that, here’s the thing, my identity has never stopped me before. It’s always driven me to push myself beyond what I thought I was capable of. We’ve raised over $40k so far through people we know and people we don’t know. And that’s not just a product of my identity. It’s a product of my idea, my network, and my ability to never give up.
Interested in investing in the flagship location of You & Sundry? Learn more about our vision and our terms here. 🙏🏾
Kim Goulbourne aka”Bourn” is a chronic creator, designer and coder. Currently working on a social parlor for the LGBTQ+ community.
Past: Curator of Hashtags Unplugged and creator behind confercal.com, noquestionsaskyed.nyc, morebybourn.com, electionrewind.com, bitterrenter.nyc, foundermantras.com, sendthanks.to and hshtags.com.
