A collective of nine women, calling themselves the Black Gems Investment Group LLC, are pooling their money and business expertise to help minority-owned small businesses grow.
The women — five who live in Charlotte and four in Detroit, Michigan — aren’t investment experts. Rather, they’re a mix of business owners and corporate professionals with backgrounds spread across several industries, including financial services, health care, higher education, human resources and marketing, to name a few.
Fueled by data showing the funding disparities faced by women founders and founders of color, the group sought out mentors who could assist them as new investors wanting to make an impact.
“We understand when you have something that you’re so passionate about, you do everything you can to make it work, but you still have limitations. And for most people, those limitations are finances,” said Dr. Kristen Trulear-Jackson, co-founder of Renew Med Spa and one of the Charlotte-based Black Gems.
Why it matters: For Black business owners, securing funding to launch a new venture continues to be a challenge. Black-owned companies are more likely to start without capital, according to a report by the U.S. Department of Commerce’s Minority Business Development Agency. Then, there’s the fight for survival — eight out of 10 Black-owned businesses fail within the first 18 months, and that was before the Covid-19 pandemic exacerbated the situation.
Black Gems Investment Group, which formally launched in January, believes that therein lies an opportunity.
“Seeing the numbers about how Black businesses don’t get the money, or that we’re not in front of the opportunities or have the business knowledge to set ourselves up to be invested in or to be acquired by a bigger company was a big issue for me,” said Nakisha Washington, Black Gems’ founder.
Last summer, the nine women loosely knew each other but connected virtually around their interest in angel investing.
Angel investors are high net-worth individuals who invest their own money into startups in exchange for equity or convertible debt — not to be confused with venture capitalists, who invest other people’s money typically pooled from investment companies, large corporations and other funds.
With her corporate background in learning and development, Washington had organized Black Gems’ predecessor, a six-week virtual meetup called All Things Money, where they were introduced to Charlotte-based angel investor Shante Williams.
Williams, co-founder and CEO of Black Pearl Global Investments, is focused on getting more “check-writers of color” at various investment levels. In 2018, minority angels accounted for 5.3% of the angel investor population.
She released her first book in July, “Black Angels Among Us: A Quick Start Guide to Angel Investing,” and subsequent workshops that the Black Gems used as a foundation.
“I quickly recognized that people would need a little more guidance through the entire process, and so they were really my first test group for taking a group of new investors, new check-writers, through the entire investment process,” Williams said.
The group has a standing meeting with Williams every two weeks where she mentors them on harnessing their strengths to look for potential deals, when to deploy their resources and other nuances. She even provides the group access to her accountant and attorney. In between time, they manage projects and share research within a private Facebook group.
“I think they actually have a really good mix across the board to help businesses grow,” Williams said.
The Gems have listened to pitches from a variety of small-business owners but hadn’t found a company that felt right. They considered an idea for a pitch competition to get in front of several businesses at once. Recently, they launched the Gems & Jewels Pitch Competition. The winner will receive an investment of up to $10,000.
Eligible businesses are:
- Based in the United States, with preference given to those located in the metro areas of Charlotte, North Carolina, or Detroit, Michigan
- Majority-owned (at least 51%) by a Black woman
- Profit generating and can provide tax returns for the previous two years
- Following @BlackGemsInvestmentGroup on Instagram
Application deadline is April 26 at 11:59 p.m. Click here for the submission deadline and more details.
The winning business will meet with the investment group to agree on terms, including dividends and equity share. Beyond their financial resources, the Gems plan to share their expertise as part of a board of advisors.
“A lot of us in the group are entrepreneurs and so we understand what it’s like for people — Black women, especially — to try and build businesses from the ground up,” said Dr. Trulear-Jackson. “I think that’s really where our passion comes in wanting to help minority-owned and women-owned businesses.”
It’s too early to determine success, but the Gems are standing on the fact that they saw a problem and provided an option, even if they don’t have all the answers.
Said Dr. Trulear-Jackson, “We just want there to be options other than big banks and other lenders that may look at another business owner and see more of a risk rather than an opportunity.”