This startup is steering money to Black and women-owned businesses

Roshawnna Novellus knows what it's like to have your business upended by the pandemic. She struggled over the past two years to move her lending startup, EnrichHER, through the regulatory compliance process, only to watch the economy tank amid widespread lockdowns, disrupting her business model built on lending money to small, women-owned businesses. She says she was tempted to throw away her plans and go back to working a 9-to-5.

Instead, in August, she launched All Rise Factory, a program that aims to fund more than 100 women-owned businesses over the next year. The new model allows funders to join with only $97 — and to decide whether they want to lend or donate.

Novellus says the new program has received hundreds of applications, and she's preparing to launch a second cohort. "Companies are really starting to realize that the current lending system isn't built for everyone, and we're doing our best to provide support," she said.

A recent study showed that Black women received 0.0006% of venture capital investment between 2009 and 2017. "Despite Black women being the most educated people in the country and starting businesses in greater numbers than any other racial demographic, Silicon Valley doesn't trust the entrepreneurial skills of women like me, apparently, who has two bachelor's degrees, a master's degree in information technology, and a Ph.D. in systems engineering," Novellus said.

Protocol spoke to Novellus about the struggles facing small, women-owned businesses right now, how she's hoping her financial technology platform can help some of those businesses through the COVID-19 pandemic, and the systemic barriers that Black-owned businesses have to surmount.

This interview has been edited and condensed for clarity.

Can you tell me a little bit about why you founded EnrichHER — the thinking behind the business and what your major goals have been with this product? What did you feel like other lending services were missing?

Every time I can help a women-led or Black-owned business succeed, I believe that I'm fulfilling my purpose. I believe that providing capital for women-led and Black-owned businesses provides economic empowerment, inclusive economic growth, and overall gender equality.

As the number of sustainable women-led businesses increases, society as a whole will benefit from inclusive job growth, as well as products and services that better reflect the input of women. Once women and Black founders have a larger role in the economies of our communities, we will be able to build a society that is more reflective of our needs, desires and aspirations.

What are some of the major ways the pandemic affected EnrichHER?

Like many other business owners, the pandemic forced me to throw out my existing plans for 2020 and make a new plan. I was frustrated about how difficult it was for women and POC to receive financial support for their businesses. Experts are saying that as many as 42% of Black-owned businesses will close because of COVID-19. The numbers are devastating. From April onward, entrepreneur after entrepreneur started calling me for help.

Have you seen an increase or decrease in businesses applying for funding?

Since we launched our new funding platform in August, we've received hundreds of applications, and we're working on ideas to expand our cohort structure to accommodate as many of them as possible. Companies are really starting to realize that the current lending system isn't built for everyone, and we're doing our best to provide support.

Have there been any notable trends in lending — a shift in how many people want to give or how much they're giving?

What's really been encouraging is that I've gotten questions from white investors who want to be intentional about supporting Black-owned and women-led businesses, because they realize that they can use their privilege to enact change. I've been able to point them to our cohort of companies, and everyone wins.

What has interest been like in the All Rise Factory? What have been some of the major challenges in making it happen and how's it going right now?

We've had lots of interest and are gearing up to launch our second cohort. It's been difficult to coordinate interviews with the cohort members because of everyone's busy schedules, but we have truly enjoyed letting our followers get to know their personal stories; they're all such interesting people who have persevered against the odds.

You work very closely with small businesses, which we know are some of the hardest hit by the pandemic. What are some of the top needs you're hearing from the small, women-led businesses you partner with?

In addition to funding, it's been our experience that financial education is very important, because predatory lending takes advantage of those populations who are already most vulnerable. That's why our Business Financing Masterclass covers both how to organize your business' financials and how to apply for grants, loans and VCs.

What are some of the unexpected ways you've seen small businesses use technology to stay afloat right now?

One of our community members who runs an eco-resort focused on wellness has started running virtual yoga classes. That's such a great pivot because it allows people to make space for mindfulness in the middle of this time where our schedules have all been turned upside down and we're trying to balance work, homeschool and 1,000 other responsibilities. She was able to reframe her business model in a way that really meets her customers where they are right now.

There's been a surge of interest in supporting Black-owned businesses right now amid the reinvigorated Black Lives Matter movement. Have you seen that energy translate into a surge in funds being donated to Black-owned businesses?

Yes, it has been gratifying to see things like #buyblack become important on a national and international level, because it means there is a growing recognition of the connection between economic power and the advancement of historically marginalized groups.

What's one thing you want more people to understand about the systemic barriers that Black-owned businesses are facing?

That economics affects mental health. I live a little less than two miles from the protests that occurred in Atlanta after Breonna Taylor's murder. I noticed the increased police presence in my neighborhood, as well as the evidence of cleanup happening the next day. After the first evening of protests, I decided to talk to the women working in security and concierge positions to better understand how they were navigating the difficult situation. These women were afraid but had to take care of their families, so they had to come to work.

This narrative has continued to be true throughout time. Time and time again, women have had to suck it up and bottle up our pain, bottle up our hurt, bottle up the weight that exists on our shoulders, all to make sure our communities stay intact. We do it by focusing on our love for others and often overlook our own needs. Black feminist Audre Lorde famously said, "Caring for myself is not self-indulgence, it is self-preservation, and that is an act of political warfare." She meant that Black women must replenish themselves because they spend so much energy caring for their communities in the face of oppression. Economic freedom lets people not have to choose between security and rest; they can have both.

What do you see as EnrichHER's role right now, both during the pandemic and this civil rights movement?

Compassionate economics goes a long way in shaping the world. Without compassion and the ability to put ourselves in other people's shoes, we can't be the change that we want to see in this world. That means using money to elevate diverse perspectives and make conversations richer because the people who have them aren't homogeneous. For companies like EnrichHER, this means being intentional about who we hire, what businesses we partner with, and where we donate and invest, in addition to encouraging the investors we have in our networks to commit to compassionate economics themselves.

What more do you think people who pledge support for the movement should be doing to help boost and save Black-owned businesses right now?

They should commit to putting their money where their heart is — to be intentional about monetarily supporting Black-owned businesses, both locally and globally.

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