Due to the ongoing impact of the COVID-19 pandemic, as well as the protests that originally broke out in response to the killing of George Floyd captured on video, corporations have pledged hundreds of millions of dollars to social justice causes, as well as to help struggling small businesses.
Companies like Google, Facebook and Salesforce have committed grants and funds to increase entrepreneurial opportunities to people who traditionally have been shut out of billions of dollars represented by the top venture capital firms – Women, Black and Latinx entrepreneurs.
And the company that Facebook and Salesforce chose to facilitate their SMB grant programs was Ureeka, a startup founded by Melissa Bradley, David Jakubowski and Rob Gatto, that provides mentorship and guidance through their platform to help their community membership of entrepreneurs’ get answers to their most pressing questions.
Interview with Melissa Bradley of Ureeka
I recently had a LinkedIn Live conversation with Ureeka cofounder Melissa Bradley to learn more about Ureeka’s mission to help underrepresented entrepreneurs succeed, and her own recent experiences raising $8.6M in VC money. Below is an edited transcript from a portion of our conversation. Click on the embedded SoundCloud player to hear the full conversation.
Small Business Trends: Tell us about your personal background.
Melissa Bradley: So I’m a serial entrepreneur and investor. I’ve spent the good portion of my life trying to start businesses and run businesses that I have working for someone else. So I am a typical entrepreneur. And during the course of time where I’ve probably now created about four or five businesses, I’ve always run into two big problems. One is finding people who actually believe in what I do and are willing to support me. And we can talk about what that support means. And two, finding investors. And part of that is obviously because I’m a woman. We know the statistics are not in favor of women getting investments. And then some would say, I have the double burden, I say I have the double opportunity that I’m also a woman of color. And I’m also gay, which is sometimes transparent and not transparent. So I’ve got a few things that do not put me in the typical category of white, male, straight starting business.
And so I have found over the years, that it’s been really hard for people to one, be willing to even listen to me and understand my idea, but two, and probably more importantly, believe in me and my idea since many of my businesses have specifically focused on people of color, which is ironic, right? Because demographically, we are about to be the majority. In many states, we are the majority of the population. We are clearly a trendsetter when it comes to culture. We clearly rule certain industries. Like we just talked about sports and fashion and media, and now beginning to really emerge in finance and FinTech. But they don’t look like me.
And so I have struggled with access to people who are willing to help me in terms of good advice. I’ve struggled with access to people willing to invest in me. I’m not looking for a handout. And I’ve struggled for people to actually even want to, in some cases, do business with me. As my first company, people have said if I knew that you had been a person of color, I’m not sure I would have contracted with your company, which is just absolutely absurd.
Small Business Trends: Tell us about Ureeka.
Melissa Bradley: Ureeka is a platform that is designed to democratize access, short and simple. Our whole mission is democratize access and reduce friction, particularly for small and medium sized businesses. But recognizing that the next wave of entrepreneurs are indeed women and people of color. We have a very specific focus on reaching out to them and making sure that they can grow the business they want to grow. And that is done primarily through coaching support, through access to content, that behind the scenes chatter that happens in those firms. And then also access to capital.
Small Business Trends: You talk about Ureeka’s intentionality to go after the “fastest growing, largest and most interesting market opportunity – which is not the Harvard and MIT pedigree, but the underrepresented entrepreneurs”. Why is that Ureeka’s area of interest?
Melissa Bradley: I think there’s two major drivers. So one I’m a finance major, right? So I go where the numbers say. And so I think it’s important because African American women are actually starting businesses six times their white male peers. And so it’s just a natural evolution with a 40% decline in white men starting businesses and a sharp increase in the number of black women in addition to women in general. I think it just says, that’s where we need to be spending our time, right? When investors say, “Who is your market?” We want to pick a fast growing market. No, not rocket science.
The second thing I would say is that we also know that, that market is typically burdened and saddled, yet they do great things, right? I mean, African American business owners and Latino business owners are actually the highest employers in this country. So it just speaks to the fact that go where the numbers are, both in terms of employment and startup and growth opportunity, but also go where there’s a market need. And there’s some research that I did almost two years ago now that said that it takes a black entrepreneur a quarter of a million dollars more to start the same exact business as their white peers.
So there’s clearly a market opportunity and gap. And I don’t know about you. I don’t know the record of the RAMS, but I’m going to bet on the underdogs, right? If nobody has given me money and nobody’s paying attention to me, but I am killing it when it comes to job creation, then I’m going to go with them. And so that’s really what the drivers are and what the whole premise in terms of why it’s important that you go after underrepresented founders. And there’s also a slight nuance there because I know in this world of high tech, there also tends to be a focus on VC backed businesses, which tend to be tech businesses. And those are great. We love them. We are a tech business, but we should also know that there’s all whole swath of businesses that are not tech businesses that are doing well, and that are making millions. And only 10% of black entrepreneurs even run tech companies.
Now, we want to change that. We want more folks to feel good about that, but you get 90% that are not running tech businesses, that are running retail businesses, that are running food businesses, that are running hospitality businesses. And the world is basically saying, “We don’t care about you because you’re not VC ready.” So we just really went where we saw there was a huge opportunity and a huge need and communities that we know that nobody else was paying attention to. And so in some cases, we’re following the numbers. And in other cases, we’re capitalizing on what we call first move advantage because everybody else is ignoring these folks.
Small Business Trends: Why is that still the case? Why is the market still a market? Why are VCs still really just completely ignoring this opportunity?
Melissa Bradley: So I think there’s a few reasons. I think one is that the market is the market, right? I mean, I think that people have to understand the drivers of being a finance person. So I don’t want to just throw out bias and racism because that’s part of it. But the reality is, investment is based on past precedent. And so unfortunately we are perpetuating this historical under investment because nobody has seen a winner yet. And we’re all waiting for a winner. We forget though, you can’t get a winner if you don’t step outside the box. So I think one is the markets are just naturally driving repeatable, scalable behavior that one would argue is not broken. I mean, the markets appear to be working, not for everybody, but they’re working. So there’s really no incentive to break that trajectory.
The second thing is which I hear and I struggle with, but in some cases it could be true, is I don’t know where they are. And so yeah. Not every entrepreneur is hanging out at MIT or Stanford. I’m in DC. There’s tons of entrepreneurs sitting at Harvard University. There’s tons of entrepreneurs at HBCU, but no one is going there to scout them. And I think part of it is they don’t know. And let’s be honest, there is an additional cost, emotional and financial. And we do have to understand that for better or for worse, the margins that are allowed to do any kind of innovation in finance are limited. And so people tend to be relatively risk averse.
And then the final thing I would say is that I don’t think media… I’m so grateful to be here and have seen your work and really appreciate you. And all the folks that you talk about have started doing these panels. I don’t think people even know we exist. I think that there is a few anomalies, right? That make the success stories that back in the day, I’m dating myself. We used to have ebony. We had black enterprise. And you get that one. As long as you could find one a month, you’re good.
But all of the social media that’s happening, I think the successes that we do have get lost in the noise. And so people struggle to say, “There’s one, there’s one, there’s one.” And let me be clear. Pattern recognition sucks, but it is a way to at least create the proxy for people to say, “I can at least think of what.” And I think we’ve got to do something where people can at least think of one, because once you get to one, the beauty of this community of entrepreneurs and particularly entrepreneurs of color is everybody knows each other. It is a highly supportive ecosystem.
So if you can find one and you call them on the phone or you text them, they’re going to give you at least 10 to 20 others that are doing just as good if not better than themselves. So I think those are just a few reasons that we’re finding folks aren’t really focusing in having this conversation.
Small Business Trends: You guys also recently raised a pretty significant amount of money and from a number of different venture firms.
Melissa Bradley: We did.
Small Business Trends: Why don’t you tell us a little bit about that.
Melissa Bradley: Yeah. So, coming from the East coast and not looking at me like my co-founders, venture is not typically my first path of thought around raising money. But when we realized after about a good six months of trying things and piecemealing things together, we realized this really could be a tech company. And it just seemed a natural opportunity to say, “Let’s go raise some venture capital.” And we had the conversations like do you think people are going to give us, the three of us money? Do you think people are going to invest in the idea where we’re actually trying to talk to people like me?
And I have to say, as I’ve told everybody, I was pleasantly surprised. I had been to Silicon Valley before. I had worked out there before. I knew a lot of these firms. And I would say the openness, I think in part, because they knew Dave, our co-founder through both prior investments, but also in a very colleague collegial way that there was an openness to at least listen. No one shut us down and said, “That’s the dumbest thing I ever heard.” And everyone’s biggest question was how are you going to get these businesses to trust you?
And we said, “We’re still working on that. We don’t take that for granted. We’re still working on that.” But it was clear that everybody who came in saw a gap in the small business market, right? Everything is so fragmented, such redundancy that they saw a real opportunity to aggregate, not consolidate. And because we had a partner strategy from the onset, they saw that we were not trying to be Pac-Man and eat up the ecosystem. We’re really trying to firm up and shore up the ecosystem.
So with that, we got some great response. We got some folks who said, “Let me wait and see.” And of course now they’re like, “I wish I had not waited.” But we were thrilled to be able to raise $8.6 million from folks in the Midwest and on the coast who most importantly were willing to support what we’re calling this next wave of entrepreneurs. They had lots of questions, but they believed in us, which was important and that’s all of us equally. They believed in our focus because we were very clear. This is a business that’s going to be open to all, but we’re going to laser in on women entrepreneurs of color. And nobody backed down from that. And in fact many said, “I hope you can pull it off because we’ve seen many iterations before you. And it hasn’t happened.” So we are very fortunate to have some amazing investors behind us.
Small Business Trends: Talk a little bit about the grant programs, but also I guess folks are trying to figure out, well, why does Facebook or Salesforce, why do they need somebody like Ureeka that we’ve never really heard of?
Melissa Bradley: We asked the same thing. Why do WE need Facebook, Salesforce, etc? We actually turn the tables because money is a dime a dozen, right? I mean, I think post George Floyd, everybody… Money is raining out windows. And we wanted to be mindful, right? That if we were going to enter into these partnerships, there were three things that were happening. One that it was legitimate, right? That there was a real honesty and earnestness around helping entrepreneurs of color and not just some quick media blurb to get you out of the public fray. The second thing was is that they weren’t just going to give money. And I know that sounds crazy because everybody says, “What do I need? Money, money, money, money.” But I say the same thing to entrepreneurs that I say to my kids. “What do you need the money for?”
Money is a means to an end. And I will tell you, in my years of doing this work prior to becoming Ureeka, we did a pitch competition. And we had a young lady that won $25,000. And she was over the moon. We followed up with her three months later and I said, “Hey, do you want to come to this program we’re running because you just seem like you might need some assistance.” She said, “Girl, I’m on the next plane because I have yet to cash the check. Because I don’t know what to do with the money. Because my needs far exceed the check size. So I’m just sitting here looking at it.” And then, so that was important that we weren’t just going to be giving money.
And then the third thing is we wanted to again, make sure that we were able to continue the relationship, right? Because again, writing a check is just the beginning, not the end. So, once we realized that all of our partners wanted to do that, what we were able to do is partnering with all of these companies that you mentioned after we did our due diligence and they did theirs and not only deploy the capital, but make sure they had access to free coaching. Make sure they had access to free content and then obviously help them with some of their problems.
Some of the biggest problems we’ve seen in all of this is having offline businesses pivot to online. And I don’t know about you, but I’m barely managing Twitter and Instagram. And oftentimes I need the help of my kids. You’re probably so much better than me. And so we find that there’s a level of expertise that people were going to pay somebody to do that. And I lose my mind when entrepreneurs outsource too much because then their goal is your intellectual property. And so we were able to say, “You got a grant, but you also got some coaching. You also got some one on one assistance.”
So we have companies like Keeping You Sweet, right? That makes what I think to be some of the best gluten-free sweet potato, natural cheesecakes you ever seen, alternatives to sugar, that are now selling in whole foods market. I had a knee replacement. There’s a company run by a black doctor, Kirsten Shepard Ahmed who has this gel I think is magic, but it’s called Pain Stopper. And we helped her get past $100,000 a month by being able to really help with the coaching and the consulting assistance. We’ve seen people’s Facebook followers go up 500% because they were a part of the coaching program with a company called Harvest 9 with the number nine. They got the coaching and then wanted more. They had 100% increase on Instagram.
So, money is a means to an end. And so I think we were able to make that value pitch to the companies and then tell the entrepreneurs that they got more than just money. It really increased our trust, but it also increased our value to the entrepreneurs because let’s be clear, people are writing checks left and right. But if I don’t know where to spend it, I don’t know who to hire. I don’t understand how the algorithms work in IG or Shopify, what good is it? And we find when I mentioned to you earlier that it costs a quarter of a million dollars more for a black entrepreneur to start the same business. About 30% of that is just churning through professional service providers who don’t have our best interest at heart. So we really solved a perpetual need in a time of crisis to help these entrepreneurs survive.
Small Business Trends: You keep talking about raining money. I’m like looking out my window right now and I don’t see money raining … There’s a lot of people that are saying, “I don’t know where to get money.” Are you saying that money is becoming more accessible or available because of what’s happened recently with some of the social unrest?
Melissa Bradley: I would say that more money is becoming available. I think the question is still, it’s raining. Now whether or not we can reach over the balcony and get it before it passes us is a different story. But sure. There’s a behind the scenes Google Doc, right? Going around of all the commitments that everybody’s made since George Floyd’s death unfortunately. I’m giving us till Christmas and people’s guilt and concern may or may not wear off, but there’s a lot of folks who have stepped up, I think some in tremendous earnest. And I think it’s okay to say self-interest because they’re businesses are small businesses and so why not invest in your customers? And then I think there are others who are putting out dare we say, vanity programs and that’s up to them, right?
But I do want to reiterate, there is a opportunity that I’d say most major companies right now are investing in some kind of program and outreach. Many of the first four runners were money. Some of them are now saying, “How do I use my team and my staff. I’m sitting on a wealth of expertise. How do I give back?” We have a lot of companies including Salesforce that gave us employees to be coaches. I mean, imagine like duh, but how amazing that was, right? To have people on the inside, tell us how to make this stuff work for you.
So yeah, I think that there are lots of programs. Now, let me be clear. It’s raining, but there’s still a catch. There’s still caveats. There’s still prerequisites. But I would say there’s been a tremendous spike in individuals and institutions, both philanthropic and not, that are really trying to think about how do I get more money in the hands of black and brown entrepreneurs. We’ve seen PayPal doing it. We’ve seen Netflix doing it. Even companies like a Netflix that you never would have thought about this before. I think people are catching on A, we’re a viable marketplace. We have over a billion dollars purchasing power. But B, again, they’re beginning to really look at the data and say where some of the fastest growing small business is. How do I make sure that I start that relationship with them.
CHECK OUT MORE:
This article, “Melissa Bradley of Ureeka: African American Women are Starting Businesses 6 Times More than White Male Peers” was first published on Small Business Trends
Read more: feedproxy.google.com