On January 11, Monica Rodriguezfounder and CEO of multi-billion dollar natural hair care brand Mielle Organics, announced that she had sold her company to P&G Beauty, sending Black Twitter into a crisis. frenzy. Although Rodríguez and her husband will continue to be CEO and COO of the brand, some consumers are upset that it is no longer owned by blacks.
“I don’t want to hear about supporting black businesses because second black businesses get all the support they need from the black dollar and they give it all to the person with the biggest check,” one Twitter user said.
For black founders, business success can be a double-edged sword. Some would consider sell your company – often for millions – to be a major achievement, but black founders are continually scrutinized by their peers and clients for making this decision.
Another black businessman faced a similar situation reaction in 2017. Richelieu Dennis is the co-founder of Sundial Brands, which revolutionized the natural hair care business when its product, Shea Moisture, hit stores in 2008. However, when Dennis sold the brand to Unilever for an estimated $1.6 billion, he was called a sellout.
Rodriguez sees the move that both she and Dennis made as “selling out,” not selling out, and says the backlash stems from a lack of general knowledge about what goes into building a business.
“People don’t understand how hard we work as business owners,” Rodriguez told CNBC Make It. “People don’t understand what it takes to scale … that when we’re on retail shelves, we have to fight for our turf when we take on these larger companies. Our community doesn’t know what we go through as business owners.”
Rodríguez and many other black founders share a similar path to getting their businesses off the ground: depleting savings and returning the money earned to the company.
“As a black woman starting a company, banks don’t believe in you. You haven’t proven yourself, so investors don’t really believe in you.” [either]. So I had to get down to business, use my paychecks and my husband’s bank account…it would all go to business.”
While Rodríguez was making it work, in the long run, he knew that continuing like this would not be sustainable. But with the success of his products, he began to attract the attention of investors, and in 2021 he got his first “historicaldeal: $100 million in funding from Berkshire Partners, a private equity firm, a feat she was hesitant to share.
“We were nervous when we talked about the Berkshire deal because we were afraid the community would look at us as if they were associated with this so-called white firm, but people make that assumption because they don’t understand business.” .”
In the book “Sellout: The Politics of Racial Betrayal”, author and Harvard law professor Randall Kennedy explains that a sellout is someone who “betrays something to which they are said to owe allegiance. When used in a racial context among African-Americans, ‘sold out’ is a derogatory term referring to blacks who knowingly or grossly negligently act against the interests of blacks generally.”
This term has been used loosely by many black consumers when black entrepreneurs partner with or sell their businesses to large, usually white-owned conglomerates. However, the pool of black-owned conglomerates is small, often leaving blacks with no other choice.
“If there were black conglomerates, and big black firms and private equity firms that would allow them to inject capital and allow us to grow, we would go to those black companies,” Rodríguez says. “But if you can think in-universe, where are those companies? There aren’t any. So where are we going to get the money and capital to scale?”
Rodríguez says that instead of labeling these entrepreneurs as sellers, people should view partnerships, investments and acquisitions as opportunities to sell.
“It’s not about selling, it’s about selling to grow and scale your business…to take that wealth and give it back to the community.”
Using Shea Moisture as an example, Rodríguez explains that despite the backlash, the brand still operates on the foundation laid by Richelieu Dennis and since the acquisition has been able to start the New Voices Funda venture capital firm dedicated to supporting entrepreneurs of color, and investing in many black-owned businesses.
Having a successful business is a great achievement, but who is to say that a person wants to own a business for the rest of his life?
“Some [entrepreneurs] You may have the goal of running a business forever, or like every individual in your career, you may want to try new things and change,” says Angelina Darrisaw, career coach and diversity expert. “Black business owners should have the ability to do that as well.”
The decision to sell a business is rarely made on the spot, according to Darrisaw, who says that “one of the main things in any business course, or even while writing their business plan, that a founder will be asked to consider is what is your exit strategy?”
“For founders like Monique, having exits is important in the long run…to be able to have a broader group of high net worth people who can support, help raise funds and invest in other businesses so that we no longer see these dismal statistics. , What less than 1% [of Black founders] be able to secure $1 million in investments. So successful black founders need outlets so they can reinvest capital back into our communities over time.”
Prior to the announcement of the P&G Beauty acquisition, Mielle Organics was viral after a white influencer, Alix Earle, encouraged her followers to buy the brand’s mint and rosemary oil. As a result, the product flew off shelves across the country, making it difficult for black women who relied on it to access.
Rodriguez’s departure as owner will not only “accelerate” access to the brand for more black women, but also Mielle and P&G. fiance $10 million to expand the impact of the charity Mielle Cares, which provides education, economic opportunity and business support for Black communities.
Rodriguez urges people to celebrate Black founders who achieve these milestones, rather than tear them down.
“We can’t get ahead as a community if we continue to speak ill of people who make wise and strategic decisions to grow their business and create generational wealth in their communities. So I think we just need to normalize partnerships. We need to normalize these collaborations and congratulate these brands for making things and selling to create wealth and help the black community.”