On January 11th, Monique Rodriguez, founder and CEO of multi-million dollar natural hair care brand Mielle Organics, sold her company to P&G Beauty and launched Black Twitter. frenzyRodriguez and her husband remain CEO and COO of the brand, Consumers are upset that it is no longer black owned.
One Twitter user said, “I don’t want to hear anything about helping black companies because the second black company gets all the support they need from the black dollar. They have all the biggest checks. pass it on to someone.
Business success can be a double-edged sword for black founders. While some consider selling a company for millions of dollars a huge accomplishment, Black founders are under constant scrutiny from colleagues and customers for making this choice.
In 2017, another Black entrepreneur faced similar backlash. Richelieu Denis is the co-founder of Sundial Brands, who revolutionized the natural hair care business when his product Shea Moisture hit stores in 2008. With an estimated $1.6 billion, he was called a sellout.
Rodriguez views the move both she and Dennis made as a “sale” rather than a sellout, and says the backlash is due to a general lack of knowledge about what it takes to build a business. .
Rodriguez told CNBC Make It: For our territory as we stand up against these big corporations. Our community doesn’t know what we’re going through as business owners. ”
“We were nervous when we discussed the contract.”
Many black founders, including Rodriguez, have taken similar paths to get their businesses off the ground. You are using up your savings and giving the money you earn back to the company.
“Banks don’t believe you when a black woman starts a company. Investors don’t really believe you because you haven’t proven yourself.” [either]So I had to work on my own and on my paycheck and my husband’s bank account…everything goes to business. ”
Rodriguez had made it work, but knew that in the long run it wouldn’t be sustainable to continue like this. Beginning, in 2021 the firstA “historic” deal: a $100 million funding round from private equity firm Berkshire Partners — a feat she was hesitant to share.
“We were nervous when we discussed the deal with Berkshire because we were worried that the community would see us as affiliated with a so-called white company. doesn’t understand the business, so that’s what I’m guessing.”
sold vs sold out
The term has been loosely used by many Black consumers when Black entrepreneurs partner with large (usually white-owned) conglomerates or sell their companies. But the pool of black-owned conglomerates is small, and often they have no other choice.
“If there are black conglomerates or large black private equity firms or partnerships where they can inject capital and enable us to grow, we will go to those black companies,” Rodriguez said. says. “But if you can think in space, where are those companies? They don’t exist. So where do you get the money and capital to scale?
Instead of labeling these entrepreneurs for sale, Rodriguez said partnerships, investments and acquisitions should be viewed as opportunities for sale.
“It’s not a sale, it’s a sale to grow and scale the company…to take that wealth and give it back to the community.”
Citing Shea Moisture as an example, Rodriguez said despite the backlash, the brand operates according to the foundations set by Richelieu Denis, a venture capital firm focused on supporting entrepreneurs since its acquisition. He explains that he was able to launch the New Voice Fund. Invest in businesses of color and in many black-owned businesses.
Importance of exit strategy
Running a successful business is a big achievement.
“Several [entrepreneurs] “Black business owners may have a goal of running their businesses forever,” says career coach and diversity expert Angelina Dalisault. , you might want to try new things and change direction.” That too. ”
According to Darrisaw, the choice to sell a business is rarely made on the spot. he said: what is their exit strategy? ”
“For founders like Monique, having an exit is important in the long run … because you can have a broad pool of wealthy people who can support you, help you raise capital, and invest in other businesses, so these dark Statistics are no longer available. , Favorites less than 1% [of Black founders] To be able to secure a $1 million investment. That’s why successful black founders need outlets so they can pour capital into our community over time. ”
Before the acquisition of P&G Beauty was announced, Mielle Organics went viral after white influencer Alix Earle encouraged her followers to buy the brand’s Rosemary Mint Oil. As a result, the product flew off shelves nationwide, making it difficult for black women who depended on it to get their hands on it.
Rodriguez’s departure from ownership will not only make the brand accessible to more Black women, but together Miel and P&G will impact the Miel Cares charity, which provides education, economic opportunity and business support to the Black community. pledged $10 million to expand
Rodriguez urges people to celebrate, not tear down, black founders who achieve these milestones.
“We cannot move forward as a community if we continue to speak ill of those who make smart, strategic decisions to grow their businesses and create lasting wealth in their communities. I think we need to normalize our partnerships, normalize these collaborations and congratulate these brands for creating wealth and doing and selling things to reach out and support the black community.
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