Black women have outpaced white men in starting a business according to recent studies. Yet despite being among the fastest growing demographic of entrepreneurs, only 3% of Black women are running mature businesses. This is largely because building a strong, growing entity that has moved past its starting stage requires access to capital. A barrier for growth that highlights the inequities women of colour continue to face in finance. Black women run businesses not only get approved for loans at rates 20 percent lower than men but also receive significantly smaller loan amounts as well.
For Dr. Roshawnna Novellus, a fintech and investing 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 sustain whole communities,” states Dr. Novellus.
In 2017, Dr. Novellus founded EnrichHER by gathering 50 organizations in Atlanta to test her idea. The full program launched in February 2019, receiving applications from 3,000 women-led businesses. “EnrichHER is the perfect name because we’re trying to put money into companies that have gender diversity in the leadership position. And by doing so, we’re enriching the business and enriching her,” Dr. Novellus explained. The platform focuses on two different types of customers. One being the funder profile – either an angel investor or a small angel group – that wants to fund a new majority founder. The other funder type is for a larger organization such as PayPal to deploy greater sums of money to well-qualified business owners. Providing the ability to make a financial transaction directly through EnrichHER makes it frictionless for funders to make investments. “Everything is built into our platform, and they can walk away a year later with a principal plus interest payment and knowing that they have funded new majority founders,” stated Dr. Novellus.
For founders looking for funding, the requirements are simple: the business must be profitable – at least a hundred thousand in revenue, has been in operation for at least a year and the founder needs to have an over 600 credit score. Submitting an application and receiving pre-qualification results are all completed through the EnrichHer platform. Loans are granted within the range of ten thousand and fifty thousand dollars, with plans to increase it to $250,000 within the near future. To date, Dr. Novellus has helped 163 women-led companies secure $14 million in funding.
Dr. Novellus is no stranger to gaining access to resources. She is one of very few Black women founders who has raised over $1 million in venture capital. But her journey toward economic empowerment and leveraging the power of investments began when she was just 15 years old. Recognizing that she would require a strategic plan to reach her goals, Dr. Novellus raised over $600,000 in scholarships to fund 11 years of higher education. She achieved this herculean feat by reaching out to over 200 companies to inquire about scholarships. 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 held in her household growing up. Defying common misconceptions about women and their perceived lack of financial knowledge, Dr. Novellus was taught differently, “My mother always told me that women were the best at managing money and managing finances, even though other people often tell us otherwise. Women are the best because they typically have to manage all the money in every household.” Dr. Novellus’ mother encouraged her daughter to be knowledgeable and feel confident in any kind of financial transaction by giving her hands-on experience from an early age. “Outside of learning how to invest in the stock market at 12, I told my mother that I wanted to do the taxes for our family, so she allowed me to read through the tax books. And she believed that I could do it,” Dr. Novellus explained.
Prior to starting EnrichHER, Dr. Novellus owned a tax and accounting firm where she recognized that the businesses she served all faced the same issue – attaining more financial capital to build and thrive. I asked her to speak on the financial barriers that Black women owners face and the strategic approach she takes to help overcome these hurdles. Here’s what she had to say:
When pitching, bring statistics to life with storytelling
Dr. Novellus recognized that pitching compelling stats that build the case for investing in women founders still did not capture the interests of founders. Instead she took a different approach. The dark reality that Dr. Novellus encourages investors to face the fact that even well-qualified and highly profitable Black women owned businesses are denied funding. When pitching to funders, she focuses on sharing the stories of the women that EnrichHER serves. Such as Barbara, one of the platform’s first customers who built 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 colour, it has to be a charity or they don’t know what they’re doing,” stated Dr. Novellus. “There are qualified people who know what they’re doing, and the infrastructure still doesn’t support them. Our financial infrastructure does not support them.” These kinds of stories help get the ear of some investors and create the opportunity for Dr. Novellus to engage in deeper conversations with them, more so than just presenting them with the facts of the market. “I had to really talk about the stories of the people and even a year after we funded Barbara, she was able to quadruple her revenue. So she went from a $1.2 to a $4 million business.”
Financial literacy is paramount to accelerating a founder’s growth
Funding is only the beginning, Dr. Novellus believes that business financial literacy is necessary for sustainable growth. Having the knowledge to make important financial decisions can make or break a business. Which is why EnrichHer embeds training within their funding program. “We have a five-week course that goes through storytelling. How to apply for a grant, how you use loans, what kind of expenses you use loans for, how do you leverage venture capital in their life?” explained Dr. Novellus, “And that training is paired with the money that 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 anyone in 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 any kind of impact and enable change. Dr. Novellus is up for the challenge because she has a deep belief in her why. Focusing on helping people live the life of their dreams and having economic power takes courage in the face of institutions that are designed to block people that look like Dr. Novellus out. “It’s in that courage that you find the ability to open the door a little bit wider and provide more impact into the world,” stated 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 capability to change their lives and communities. Which is the core reason why funding Black women will result in a guaranteed return on investment. “Black women start more businesses than any other group in the US. And we know that we’re excellent,” declared Dr. Novellus. “And so having our own economic power, getting the respect that we deserve in society and moving forward with taking care of our loved ones is so vitally important that we will do the extra work. We’ll make those sacrifices so that we can show up in the world as we deserve to be seen.”