Ask anyone and they’ll tell you we’re in the golden age of entrepreneurship. In fact, Black women–run businesses have grown by a whopping 67.5 percent between 2007 and 2012, according to the National Women’s Business Council. Still many agree that minority-owned start-ups have the hardest time raising capital and Black women often fare the worst. But take heart: We’ve asked an expert and talked to real women who have raised six figures to find out how they did it— and how you can, too.
1. MAKE SURE YOUR IDEA IS SCALABLE
There are two buzzwords you’re apt to hear when dealing with investors: scalable and high-growth. What are they looking for? How quickly your small idea can become a multimillion-dollar cash cow. “If you are making your own clothing and willing to wholesale beyond your boutique, that’s much more scalable than having one store,” explains Cash. “Venture capital firms are oftentimes investing on behalf of clients—endowments, pensions, family offices—who are seeking outsize financial returns. That means most VCs are investing in companies with big scalable visions, the ability to disrupt an industry and the ability to achieve hundreds of millions or billion-dollar valuations in seven to ten years.”
2. DREAM BIG—THEN DREAM A LITTLE BIGGER
“I’m always on the hunt for crazy, ambitious, I-can’t-sleep-at-night passionate entrepreneurs who are trying to create significant change with their product or services,” says Cash. So how do you convince people like Cash to hand over their money for your idea? Sell them on your dream—even if it sounds a little ridiculous. “Women are very good at being honest and focused on the here and now,” says Cash. “But they often have a hard time projecting their billion-dollar vision and saying, “Look, I’m here today, but my bigger vision five years from now is this.””
3. NETWORK BEYOND YOUR NETWORK
Cash encourages entrepreneurs to move beyond their social circles if they want access to larger pots of money. And she’s honest about why: “The problem oftentimes in Black and brown communities is that we simply don’t have people in our networks that can afford to just write us a $50,000 check to play with.” That’s why Cash isn’t shy about encouraging people to look elsewhere. “I want more entrepreneurs of color to be okay with stepping out of their comfort zone and connecting with people with similar passions,” she says.
4. DO YOUR HOMEWORK
Overnight success stories sound great, and it’s easy to get wistful with why-isn’t-that-me envy. But don’t believe the hype. Cash says she looks to invest in teams who have been in the trenches for a few years—those who have done the work, learned the market and are now ready to use her money to get to the next level. “I review lots of pitch decks that identify big market opportunities with interesting solutions, but it’s glaringly clear when the team hasn’t spent enough time testing out their product or service,” says Cash. “The founder of Mayvenn, for example, had an import and sourcing agency before he got into the hair extension business. He had experience with import and export before his current venture took off.”
5. BE READY TO QUIT YOUR DAY JOB
“Something we see that is an automatic no is when people are still working full-time jobs,” says Cash. “They swear to us that they can do this on the side or at night and it’s rarely possible. There may be some people who pull it off, but it’s a real red flag because entrepreneurship is a full-time commitment.”
6. GIVE UP SOME OWNERSHIP
Don’t be stubborn. Owning 100 percent of 0 is, well, 0. When you find the right investors that you believe can help you grow your business, be willing to give them an appropriate piece of equity, says Cash. “To build a big business, you’ll need committed partners to help you create a larger pie that has significant value—and they should be rewarded accordingly.”