For Black Beauty Entrepreneurs, It Costs More to Be the Boss

While systemic factors, like less access to funding and business education, have made it disproportionately more challenging for Black entrepreneurs than their non-Black peers, Black Americans still find ways to beat the seemingly impossible odds. Between 2017 and 2020, Black-owned businesses in the U.S. “increased by 13.64%—larger than all businesses in general, which increased by 0.53% over the same period.”

Additionally, Black-owned companies earned an estimated $141.1 billion in gross revenue in 2020—an 11% increase from 2017, reporting larger increases in revenue, employees, and payroll than other racial groups. But then two major harrowing events occurred that completely disrupted the upward growth of Black-owned brands, and they’ve yet to recover. The unjust killings of Black people in 2020 and the global coronavirus pandemic came at the mental, emotional, and literal physical expense of people around the world, and Black entrepreneurs took an additional blow to their businesses.

When the playing field is already uneven, such seismic disasters take a far greater toll on Black-owned brands. The beauty and wellness sector is no exception, as many of our favorite Black-led companies struggled to stay afloat and others drowned altogether. Byrdie spoke with four Black beauty and wellness founders about business since 2020 and the price they pay to be bosses in the space.  

Karen Young launched her body care brand Oui the People in 2017, inspired by needing a razor that would achieve a smooth shave without ingrown hairs, razor bumps, and other pesky effects of shaving. “There was a distinct way for me to serve the market for women who had been overlooked in the conversation around shaving, particularly as it related to skincare issues,” she tells Byrdie. Young had been bootstrapping, and the brand was steadily growing, but it wasn’t until June 2020 that it received a massive influx of support and interest from consumers, media, and investors.

Mourning the lives of Breonna Taylor, Tony McDade, Oluwatoyin “Toyin” Salau, and others, millions of social media users, including individuals and corporations alike, posted black squares to show solidarity with the Black Lives Matter movement. However, influential voices, like Uoma Beauty founder and former CEO Sharon Chuter, were tired of empty gestures that did little to address racism and demanded more. The respected cosmetics founder coined the hashtag #PullUpOrShutUp, challenging beauty companies to share the number of Black employees who held leadership positions. “You cannot say Black Lives Matter publicly when you don’t show us Black lives matter within your own homes and within your organizations,” she said in a heartfelt video. White-led companies acted beyond PR statements and black squares in what appeared to be a genuine effort to balance the scales and tackle white supremacy from all sides. Black-owned beauty listicles were published in every publication, major retailers pledged to make shelf space for Black-owned brands, and influencers shared their favorite Black-owned beauty products. The support was arguably stronger than it usually is during Black History Month—the one time of year typically reserved for such demonstrative allyship. 

Oui the People saw an immediate payoff, as it was the top-searched Black-owned beauty brand in June 2020 with an increase of 1,150%. “It was a fluke that came on the backend of a disaster, to be quite honest,” Young says. “The first thing that happened is we sold out of months of inventory within a matter of weeks.” But the founder tells us that the new interest from consumers, investors, and media receded as quickly as it came. “Your favorite Black-owned brand may close this year or next,” Young shared on July 11, 2024, in an Instagram Reel. “We are experiencing what I would call a recession within a recession almost. And that is a recession of capital. That is a recession of the flood of support. And that is also a recession of just visibility.”

Currently, Oui the People’s cap table is primarily Black and female investors who are “deeply invested” in the market opportunity and who allot funds specifically to Black and/or female founders. The company was able to raise $3 million in an oversubscribed seed round in 2022, largely due to investor relationships Young had been fostering over the five years prior. But in the larger conversation around Black founders raising capital, she doesn’t think the majority of lenders truly believe in Black beauty founders’ ability to capture a significant enough market share that reaches a broad range of customers. Consequently, investors who may have felt social pressure to meet with founders at the height of the BLM protests “literally had no intention of investing in you,” which she says was a time-consuming and frustrating experience. 

Tristan Walker, founder and former CEO of Walker & Co, the parent company behind Bevel’s smooth-shaving razor made with Black men in mind, cosigns Young’s experience. Walker, who launched the grooming company in 2013 and sold it to Procter & Gamble for a speculated $20 to $40 million in 2018, acknowledges that his accessibility to investors as a Stanford Graduate School of Business alum and Foursquare’s former director of business development played a pivotal role in his success. “We’re trying to pitch financiers who don’t necessarily have an authentic connection to the problem we’re articulating. It would be even harder for someone who didn’t have that network,” he tells us. While the company did manage to raise over $30 million before its acquisition, Walker says that in the early startup stages, they received $2 million, while non-Black competitors were raising in the tens of millions.

Research also supports Young’s theory regarding investors’ disingenuous, performative support of Black businesses. Nearly $1.8 billion of venture funding went to Black entrepreneurs through the first half of 2021, more than four times compared to the same time in 2020, according to Crunchbase news. The first six months of 2021 had surpassed the “$1 billion invested in Black founders in all of 2020 and the $1.4 billion invested the year before that.” The uptick directly coincided with the killing of George Floyd, as many Venture Capital firms and investors pledged to diversify their spending. And for a while, they did (although the funding was still a minuscule fraction of the overall capital invested). But as widespread attention to BLM dwindled, so did the capital. Last year, Black-founded U.S. startups received only $705 million, less than .5% of the $140.4 billion in venture funding for all U.S.-based startups. The number is the lowest it’s been since raising $582 million in 2016. 

Samia Gore, founder and CEO of plant-based supplements brand Body Complete Rx, has unofficially coined the sudden decline as the “Black Lives Matter Bust.” But she says that’s not all Black entrepreneurs are up against, adding the current economy and embedded racial bias that existed long before 2020. Gore says the economy is in crisis mode and consumers have less disposable income, which directly impacts lenders’ ROI. “I have friends who have had investors who have ghosted [them]. Literally gave them millions of dollars in 2020 and 2021, and now they can’t get these investors on a call,” she tells us. Essentially, investors are “wiping their hands” and terminating relationships with businesses that haven’t been able to return an adequate prophet in the current economy. For Black founders and Black women founders, who on average receive less than 2% and 1%, respectively, of all VC funding each year, downward trends in the market have even greater implications. 

Data published in 2022 by Bank of America revealed that 56% of surveyed Black business owners report being self-taught entrepreneurs, but this isn’t necessarily by choice. The majority of them are eager to receive advice and educational resources to help them run their businesses. Gore, who completely self-funded Body Complete Rx, grossed more than $10 million in sales in the brand’s first five years and made history as the first Black woman-owned weight-management supplement company to be carried by The Vitamin Shoppe. Despite the wellness enterprise’s success, however, Gore admits there was a lot to business that she didn’t know as a first-time entrepreneur, resulting in avoidable mistakes. For example, in just one year, Body Complete Rx went from three to 27 SKUs—a premature and costly move the businesswoman realizes in retrospect. “That’s a lot of money that you’re diverting from talking about these three SKUs … because now you have to educate your consumers on all of these other products that you have.”

Gore met with investors last year to help market and scale Body Complete Rx, but one of their concerns was the number of products. They advised her to scale back and focus on her top-selling merchandise. While the partnership didn’t pan out between Gore and the lenders, she tells Byrdie that the “silver lining” is she walked away with learnings that she can implement. In May of this year, the founder sold Body Complete Rx’s remaining inventory and decided to close shop. She’s taking the time to scale back and focus on her mental health before relaunching.

Unlike Young and Gore, Mala Rhodes never got funding or even pursued investors for her Ayurvedic-inspired natural hair care company, AfroVeda. Challenges arose for the self-funded brand at the height of the pandemic. In August 2020, nearly 30% of small businesses reported domestic supplier delays and 10% experienced foreign supplier delays. AfroVeda, which launched in 2007, was one of those companies and had to cease production. “I didn’t want to close [my business], but I could not get containers anywhere,” Rhodes tells Byrdie. “I would contact [vendors] … and either a fifty-cent bottle had gone up to $2.75 a bottle, which was ridiculous. Or they just had no inventory at all.” Walker recalls the packaging shortage, as he remained CEO of Walker & Co. through the acquisition for five years until last December. He says that Walker & Co. would not have survived the pandemic if not for the acquisition by P&G. 

Rhodes had to discard a lot of herbs and other natural ingredients used in her formulas because there was no way to package and sell them. Additionally, “At the time that I closed, it wasn’t just business-to-customer. There were beauty supply stores all over the world that were carrying the product.” In its 13 years of operation, AfroVeda had built relationships with distribution centers that supplied beauty supplies in the U.S., Canada, and Europe with its products. The screeching halt due to COVID-19 resulted in a financial loss of about $1.5 million between 2000 and 2023.

AfroVeda was able to relaunch last July, resuming production with its hair products. Although the brand isn’t in as many stores as it was pre-pandemic, it’s available directly to consumers and is gradually rebuilding its customer base. It’s also expanded, adding an education arm to the business that came about during the pandemic. While the world was on lockdown, Rhodes started the Ayurveda Academy of Cosmetic Formulation, an online course teaching others how to formulate Ayurvedic products. After facilitating a well-received in-person course in Ghana, she is working to get the curriculum into a university there. The founder has also ventured into private-label, formulating products under the name of other companies. Rhodes says the ability to pivot has been vital in her journey as an entrepreneur. “I’m never allowed to panic because being able to pivot means that you have other options. And that’s one thing I try to teach my students. Being an entrepreneur is not a ‘skip through the tulips kind of thing,’” she tells us.

Adding to the financial cost of being a Black beauty boss is a less calculable tax on your mental and emotional health. Young reveals that she was in a “wild place … processing trauma” as a result of the horrifying tragedies while also “trying to keep up with the sudden tailwinds that had hit my business.” She also remembers being “extra emotional” after having her children. And as if simultaneously digesting back-to-back headlines of Black people being slain while running your business at its peak and also mothering small children weren’t enough to navigate, the Oui the People founder was also on the receiving end of flat-out racist and sexist commentary from a white male investor: Is she going to be sassy? Is she going to talk back? Is she going to bring out the ghetto? I hear you’re from Brooklyn. Are you going to bring your attitude? “When that investor said those types of things to me—and he was a very specific, one-of-a-kind individual who I’d never go back to—I just felt such a sense of shame for who I was and all of the work that I put into the world and all of the business acumen and all of the things that I had grown to be,” Young, who’s the daughter of Guyanese immigrants, recalls. “My poor grandmother turned in her grave.” She says that while entrepreneurship has been rewarding, there are unique experiences that people have been rather “tight-lipped” about and carried in shame. 

Gore, who battles premenstrual dysphoric disorder (PMDD), says that she asked herself, “Am I a failure?” and experienced “overwhelming stress” amid her business challenges. “I had to learn to disconnect [myself and my business] and give myself grace.” Her unique mental health journey as a Black wellness founder inspired her to create FoundnWell, a community advocating for mental health awareness and resources for founders and entrepreneurs. Rhodes says that the inability of Black entrepreneurs to “fail forward” adds a level of difficulty to the already stressful realities of being a founder who wears multiple hats. She leans into her spiritual faith to maintain her mental health, and she views her identity as a Black female entrepreneur as a triple threat instead of a hindrance. “It gives me the courage and confidence to walk into any room and sit at any table. It’s been the year of the woman for a few years now, and it hasn’t stopped.” 

So how do we support Black beauty bosses? Young says there should be “a number of Black-owned brands on any [publication’s] list that talks about hyperpigmentation or anti-aging or whatever” because consumers can’t discover them without consistent visibility. Gore appreciates incubators for established businesses, but she’d like to see more programs that nurture and educate Black entrepreneurs at the ideation stage. So many brand owners make accounting, legal, and other mistakes in the beginning “that come back to bite you,” an experience she knows firsthand. And Rhodes simply encourages consumers to shop Black beauty brands. While creating an equitable society is the obvious solution to eliminating struggles specific to Black beauty founders (and Black founders across all industries), the reality is that completely dismantling oppressive systems is a lifelong undertaking. But these are actionable steps that we—including everyday consumers, investors with access to capital, and writers and content creators with influence—can all take now to strengthen and amplify Black-owned beauty and wellness brands.