Black women have overtaken white men in starting a business according to recent studies. Yet despite being among the fastest growing entrepreneurial demographic groups, only 3% of black women run mature businesses. This is largely because building a strong and growing entity that is past its start-up stage requires access to capital. An obstacle to growth that highlights the inequalities that women of color continue to face in finance. Black women who run businesses are not only approved for loans at 20% lower rates than men, but they also receive significantly lower loan amounts.
For Dr Roshawnna Novellus, FinTech and investment expert and founder of EnrichHER, her mission is to change that. EnrichHER, the only digital lending platform specializing in connecting diverse entrepreneurs to capital, is Novellus’ solution to fuel inclusive economic growth by providing business owners with capital, coaching and connections.
“I believe that women entrepreneurs are the cornerstones of society; our businesses not only create jobs, but they strengthen economies and support entire communities, ”says Dr Novellus.
In 2017, Dr Novellus founded EnrichHER by bringing together 50 organizations in Atlanta to test his idea. The full program was launched in February 2019, receiving applications from 3,000 women-led businesses. “EnrichHER is the perfect name because we are trying to invest money in companies that have gender diversity in the leadership position. And in doing so, we enrich the business and enrich it, ”explained Dr Novellus. The platform focuses on two different types of customers. One being the profile of the funder – be it an angel investor or a small group of angel investors – who wants to fund a new majority founder. The other type of funder is for a larger organization like PayPal to deploy larger sums of money to well-qualified business owners. Providing the ability to carry out a financial transaction directly through EnrichHER enables lenders to make investments without friction. “Everything is built into our platform and they can walk away a year later with a payment of principal plus interest and knowing that they have funded new majority founders,” Dr. Novellus said.
For founders looking for funding, the requirements are simple: the business must be profitable – at least 100,000 income, have been in business for at least a year, and the founder must have a credit score of over 600. The Submission of an application and receipt of prequalification results is done via the EnrichHer platform. Loans are made in a range of ten thousand fifty thousand dollars, with plans to increase it to $ 250,000 in the near future. To date, Dr. Novellus has helped 163 women-led businesses raise $ 14 million in funding.
Dr Novellus is no stranger to access to resources. She is one of the few founding black women to have raised over $ 1 million in venture capital. But her journey to economic empowerment and harnessing the power of investments began when she was just 15 years old. Recognizing that she would need a strategic plan to achieve her goals, Dr. Novellus raised over $ 600,000 in scholarships to fund 11 years of graduate studies. She achieved this Herculean feat by contacting over 200 companies to inquire about stock exchanges. Her persistence worked and companies decided to invest in her educational goals.
Much of her determination and advocacy for economic equality began with the conversations she had in her home growing up. Challenging common misconceptions about women and their perceived lack of financial literacy, Dr Novellus learned differently: “My mother always told me that women were the best at managing money and finances, even though other people often tell us the opposite. Women are the best because they usually have to manage all the money in each household. Dr. Novellus’ mother encouraged her daughter to be knowledgeable and to feel confident in any type of financial transaction by giving her hands-on experience from an early age. “In addition to learning to invest in the stock market at age 12, I told my mom that I wanted to do taxes for our family, so she let me read the tax books. And she believed I could do it, ”explained Dr. Novellus.
Prior to founding EnrichHER, Dr. Novellus owned a tax and accounting firm where she recognized that the companies she served all faced the same problem: getting more financial capital to grow and prosper. I asked her to talk about the financial barriers black female homeowners face and the strategic approach she takes to help overcome those barriers. Here’s what she had to say:
During the pitch, bring statistics to life with storytelling
Dr Novellus acknowledged that presenting compelling statistics that justify investing in female founders still does not capture the interests of founders. Instead, she took a different approach. The grim reality that Dr Novellus encourages investors to face is that even businesses owned by well-qualified and highly profitable black women are denied funding. When presenting her proposals to funders, she focuses on sharing the stories of the women that EnrichHER serves. Like Barbara, one of the platform’s first clients who started a million dollar business but still couldn’t get a working capital loan. “I had to focus on this story because a lot of people just assume that if you’re helping women or people of color, it must be a charity or they don’t know what they’re doing,” Dr. Novellus. . “There are skilled people who know what they’re doing, and the infrastructure still doesn’t support them. Our financial infrastructure does not support them. These types of stories help grab the attention of some investors and create the opportunity for Dr. Novellus to engage in more in-depth conversations with them, more than just presenting them with the facts of the market. “I really had to talk about people’s stories and even a year after funding Barbara, she was able to quadruple her income. So it went from a $ 1.2 business to a $ 4 million business. “
Financial literacy is key to accelerating a founder’s growth
Funding is just the start, Dr. Novellus believes that corporate financial literacy is necessary for sustainable growth. Having the knowledge to make important financial decisions can make or break a business. This is why EnrichHer integrates training into its funding program. “We have a five week storytelling course. How do you apply for a grant, how do you use the loans, what kind of expenses do you use the loans for, how do you take advantage of venture capital in their life? Explained Dr. Novellus, “And this training is associated with the money they receive from us so that they can optimize the use of the capital that they receive from EnrichHer.” The platform provides an ecosystem of support for founders, including networking opportunities and weekly office hours for all members of the community to ask questions regarding their financial or business decisions.
Open the door a little wider for the black woman behind you
It takes courage to make an impact and enable change. Dr. Novellus is up to the challenge because she believes deeply in her why. Focusing on helping people live the lives of their dreams and having economic power takes courage in the face of institutions designed to block people who look like Dr. Novellus. “It is in this courage that you find the ability to open the door a little further and have more impact on the world,” said Dr Novellus. With little room for mistakes or missteps, black women are in a constant cycle of growth and excellence. By providing the resources they need to excel, black women have the ability to change their lives and their communities. This is the main reason why funding black women will result in a guaranteed return on investment. “Black women are starting more businesses than any other group in the United States. And we know we’re great, ”Dr Novellus said. “And so having our own economic power, getting the respect we deserve in society and moving forward taking care of our loved ones is so important that we will do the extra work. We will make these sacrifices so that we can appear in the world as we deserve to be seen.