A conversation featuring
- René Graham, Founder and CEO, Renzoe Box
- Jesse Martinez, Founder of Latinx Startup Alliance and Founder & CEO of LSA Global
- Sonny Messiah-Jiles, Publisher and CEO, Houston Defender Network
- Nicholas Perkins, CEO, Fuddruckers
Epicenter-NYC convened and led a conversation among Black and Brown leaders and entrepreneurs on how they got started, the opportunities we need and how one can get a footing in owning or starting a business. Sponsored by UBS, the group gathered in Houston, Texas, and themes echoed much of what small businesses tell us they need in our regular features. Some key takeaways:
There’s a formula: Creative financing, winning contracts, the people who can help.
Sonny Messiah-Jiles wanted to buy the Houston Defender, the Black newspaper dating back to 1930. A banker told her she had three strikes against her: being Black, a female and single. Then she was advised to take a calculated risk, put her assets on paper, add it up, and see what she needed to do to make it happen.
She recalls:
I actually ended up going to Mr. [Clifton] Richardson [previous owner of Defender] and said, tell me how you came up with this number.
I worked at Xerox at that time and Xerox said, always probe me before you pitch.
And so I said, how did you come up with this number? And he says, this is my mortgage, this is my car loan, etc. And then I said, well, how much of this was cash? And he says X amount. And I said, oh, I have borrowed that amount from all my relatives, what if I give you this in cash and assume all your debts? And he said, I don’t think you can do that legally. I said, if I can find a lawyer that will do this, will you let me buy the paper? He said, yeah.
And that, my dear, is creative financing.
Nicholas Perkins, CEO of Fuddruckers, founded the Perkins Management Company, which specializes in contract food service management. It was through this company that he successfully engineered the $18.5 million acquisition of the Fuddruckers restaurant brand.
His journey:
So while in undergraduate school, I worked as a breakfast cook at a mental health hospital in my hometown. That contract came up for bid and I was out of undergraduate school about a year and a half, came back, competed for the contract and won. And that’s how I launched the company.
I was 25 starting the business. I was the cook, the food server, the food delivery guy, the janitor. And so I worked very diligently, had $2,000 in an American Express card––a lot of times people think you gotta have this massive amount of resources to get started. I never allowed that to be an impediment to getting started. I dreamed beyond the resources I currently control and reinvested the profit that I had earned in the company. And then I went into the SBA 8(a) business development program, and started competing for government contracts.
It took two years to get that first opportunity with the Department of Defense. Once I got that opportunity, I knew how important it would be to perform well. And we did that. And from there it just kind of took off and then got involved in college and university food services, and then I began building Perkins.
René Graham applied her background in architecture and real estate development when she wanted to innovate in the beauty industry. Her tendency to view and solve problems spatially birthed Renzoe Box.
She explains:
When I started Renzo Box, I had no background in the beauty industry whatsoever. And when I was doing the research, I was like, okay, LA, New York, that’s where I need to be, that’s where the beauty industry is. Spent three months in LA, three months in New York trying to learn, network, meet people. I quickly realized that as a new startup, what I needed more than anything is my people—I needed my connections, I needed people who had worked with me in architecture or real estate, granted a completely different industry, but they trusted me. They knew my work ethic, they knew what I was capable of delivering. And that was more important than being completely plugged into the beauty industry.
Epicenter wrapped up with our signature question: What do you need? From the room, from each other, from us?
The answer was resoundingly the same: ACCESS TO CAPITAL.
Perkins:
Banks need to be held accountable. Deposits need to start reflecting their loans. When you look at the bank, the businesses and people that they’re financing versus the people who are actually their customers––it doesn’t make sense to bank where you can’t borrow.
Capital is everything. If you got access to capital, you can make the investments that you need so that we find ourselves and working IN our businesses more so than working ON our businesses because of the lack of access to capital to make the investment in technology and things of that nature.
So our businesses only grow to a certain point. It’s not really sustainable. We’ve demonstrated the ability to be able to have the grit, the wherewithal, the intelligence, the drive, the work ethic––the only thing that we lack access to is the gas that goes in the car to make it move.
Messiah-Jiles:
Automation is more of a threat right now than AI is. But the real challenge is, are we doing anything to prepare people, especially the under-skilled. I think that some of the community colleges are now saying “we need to fill this void.”
So I think that’s one of the opportunities. But I don’t think there’s a real concentrated strategic approach to this, which means going forward, are we looking at an underemployment number, not unemployed, underemployed? I think there’s a lot of noise around AI so you gotta flush through that noise.
The fundamental piece we’re missing is the capital for the infrastructure. I’m talking about the human capital that we need. That’s where we need the capital, to fund that human capital because you learn how to use all this tech and then you gotta hire somebody to do the work. And the question, where does that funding come from? Which comes first? The chicken or the egg. You gotta go make the money to be able to fund the person to operate the tech that’s supposed to be making the money. I think it’s capital focused on human capital that we need more than just the tech and the training. I understand the tech now, I understand what I gotta do, I just need some money to go get the people who can do it.
Jesse Martinez, who in an effort to ensure there are spaces where we are represented, launched the Latinx Startup Alliance to empower Latinx tech entrepreneurs and give them access to people and resources.
He broke it down:
So think about capital, and women and female founders. For Latinos it was 2% and then for Latinas it’s like decimal points. So for us how do we help change that ecosystem? We need more Latina tech founders so we’re embarking on a new journey this fall to launch the first Latina venture studio at the Ion. So we’re focused on hosting a pilot that has a percent of Latinas that have a tech idea, but don’t know where to start or what to do.
It’s important that we create these success stories so that––next year we have two cohorts, spring and fall. And then the following year we have a co-ed cohort. And the year after that we raise a small fund to provide some pre-seed funding. But it all goes back to capital.
Graham reflected on creating a space at SXSW for tech-focused women entrepreneurs that enabled empowerment and connection:
I quickly came to realize the state of funding for female founders—I’m a solo female founder, if it’s a female founded team, it is so horrifically low. So the year before last, it was 2.4% of all venture capital dollars went to women––and I thought that was terrible. And then last year, 2022, it dropped to 1.9%. So I was like we need a space for women. There are these incredible women that are leaders of the fields that are coming to speak at South by Southwest. I know there’s all these entrepreneurial, tech focused women that are starting companies that will be at SXSW. I also know that there are female venture capitalists that will be here as well. Let’s bring them all together into one space.
Key takeaway: It takes dreaming beyond the resources, getting creative with financing, surrounding yourself with people that know your work ethic, and creating spaces that will help us collectively go where we need to be.
