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In 2002, Makisha Boothe opened her first business, Ya Ya Spa in Cherry Creek, with little more than $5,000 and a clientele that she’d built by 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 became acquainted with the unique set of circumstances that Black female business owners face.
Although Black women are one of the fastest-growing demographics of entrepreneurs in the nation, they receive very little start-up capital. Of the estimated $427.4 billion in venture capital funding doled out since 2009, less than 1 percent (.0006 percent, to be exact) went to Black female entrepreneurs. Moreover, banks deny nearly half of all loan applications from Black business owners—more than any other racial group—according to the U.S. Federal Reserve.
Boothe’s spa closed in 2007, and she’s since worked with the Colorado Senate as a senior advisor and with Denver Public Schools as a senior director of its Innovation Lab. In 2017, after leaving those posts, Boothe decided she wanted to put her business acumen to use and founded Sistahbiz Global Network, through which she coaches other Black women on how to build sustainable, scalable businesses, including helping them secure funding.
It’s no small feat. As Boothe points out, there are a number of forces, including discriminatory lending practices, that work against Black female entrepreneurs. Black women might also have a smaller network and a lack of collateral—all barriers to creating a start-up.
Boothe also notes that there are psychological barriers to entry. Many Black female entrepreneurs have come from white-led industries, like politics and finance, where they might experience discrimination, belittlement, and exclusion. That trauma can be carried into their future ventures.
“They are feeling misunderstood, or excluded, or retaliated against, and when you take that sort of situation and you bring it with you into entrepreneurship, there’s a whole lot of mindset work, and trauma, and therapy sessions to help you build yourself back up to be able to build a successful business,” Boothe says. “People don’t talk about that a lot. About how entrepreneurship is connected to your mindset and your confidence.”
To help connect her clients with funds, Boothe and Sistahbiz introduced the Sistahbiz Loan Fund earlier this year with help from Denver-based CEDS Finance, a nonprofit that helps fund local small businesses operated by immigrants, refugees, and underserved communities. The nation’s first small business loan fund dedicated to Black female entrepreneurs, it will provide access to loans ranging from $500 to $50,000 at interest rates of from 7 to 11 percent. To be eligible for a loan, applicants must live in Colorado and have gone through one of Sistahbiz’s training programs or received individual counseling from Boothe.
For most entrepreneurs, the first stage of startup capital comes from friends and family, which puts the Black community at a disadvantage, Boothe says. Without that foundation, those businesses can’t grow to the next step, where they’re large enough to attract attention from VCs. “The wealth gap prevents us from getting to the stage where VCs would even entertain us or where our businesses are scale-able or profitable,” says Boothe. She hopes Sistahbiz can step in and provide that initial capital on which to build.
Lisa Young is currently applying to the loan fund. After a 20-plus-year career in human resources, Young founded WorkSource Consulting seven months ago. “The loan will enable me to be more sustainable,” Young says. “As a new business, you need marketing and advertising, and the loan will give me the opportunity to get those things. It’ll give me the opportunity to be more strategic instead of waiting and hoping that money will come in.”
Although the loan fund is immensely valuable to businesses like Young’s, both Young and Boothe agree that Denver—and the nation at large—has a ways to go in order to achieve equality for Black female business owners.
“With the Black Lives Matter movement, people started sending donations to black businesses. I know maybe some folks might not know about the connection—the movement is about police brutality, but the response included asking ‘How should we support black businesses,'” says Boothe. “I think it’s important to note that community wealth building is a key lever in breaking down systemic injustices and disparities that we experience as Black people. A lot of people disconnect these things that are all connected.”