In 2002, Makisha Boothe opened her first business, Ya Ya Spa in Cherry Creek, with just over $ 5,000 and a client base she had built up working at another spa for years. As the only black spa owner in Cherry Creek – and one of the only black business owners in the neighborhood – Boothe has learned about the unique set of circumstances black women face.
Although black women are one of the fastest growing entrepreneurial demographics in the country, they receive very little start-up capital. Of the estimated $ 427.4 billion in venture capital funding distributed since 2009, less than 1 percent (.0006 percent, to be exact) has gone to black female entrepreneurs. What’s more, banks turn down nearly half of all loan applications from black business owners – more than any other racial group – according to the US Federal Reserve.
Boothe’s spa closed in 2007, and she has since worked with the Colorado Senate as a senior advisor and with Denver Public Schools as senior director of its innovation lab. In 2017, after leaving these positions, Boothe decided to use her business acumen and founded Sistahbiz Global Network, through which she accompanies other black women on how to create sustainable and scalable businesses, especially by helping them obtain funding.
This is not an easy task. As Boothe points out, there are a number of forces, including discriminatory lending practices, that work against black female entrepreneurs. Black women can also have a smaller network and a lack of collateral – all of which are obstacles to setting up a start-up.
Boothe also notes that there are psychological barriers to entry. Many black female entrepreneurs come from industries run by white people, such as politics and finance, where they could face discrimination, depreciation and exclusion. This trauma can be carried in their future endeavors.
“They feel misunderstood, excluded, or the victim of retaliation, and when you take that kind of situation and bring it with you into entrepreneurship, there’s a lot of work on mindset, trauma. and therapy sessions to help you rebuild. be able to build a successful business, ”says Boothe. “People don’t talk about it a lot. About how entrepreneurship relates to your mindset and confidence. “
To help connect its clients with funds, Boothe and Sistahbiz presented the Sistahbiz loan fund earlier this year with help from Denver CEDS funding, a non-profit organization that helps fund local small businesses run by immigrants, refugees and underserved communities. The country’s first small business loan fund dedicated to black women entrepreneurs, it will provide access to loans ranging from $ 500 to $ 50,000 at interest rates of 7 to 11 percent. To be eligible for a loan, applicants must live in Colorado and have completed one of Sistahbiz’s training programs or received individual counseling from Boothe.
For most entrepreneurs, the first step in seed money comes from friends and family, putting the black community at a disadvantage, Boothe says. Without this foundation, these companies cannot take the next step, where they are big enough to grab the attention of venture capitalists. “The wealth gap keeps us from getting to the stage where VCs would even entertain us or where our businesses are scalable or profitable,” says Boothe. She hopes that Sistahbiz can step in and provide that initial capital on which to build.
Lisa Young is currently applying for the loan fund. After a career of more than 20 years in human resources, Young founded WorkSource Consulting seven months ago. “The loan will allow me to be more sustainable,” Young says. “As a new business you need marketing and publicity, and the loan will give me the opportunity to get those things. It will give me the opportunity to be more strategic instead of waiting and hoping that the money will arrive.
While the loan fund is extremely valuable to companies like Young, Young and Boothe agree that Denver – and the nation as a whole – has a way to go in achieving equality for black women business owners.
“With the Black Lives Matter movement, people started sending donations to black businesses. I know some people may not be aware of the connection – the movement is about police brutality, but the response was to ask ‘How should we support black businesses,’ ”Boothe says. “I think it’s important to note that community wealth creation is a key lever to breaking down the injustices and systemic disparities that we experience as black people. A lot of people disconnect these elements which are all connected. “