Oui the People, founded by Karen Young, grew from a small startup to a household beauty brand after launching in 2015. The body-care company—which offers shave creams, body washes, oils and more—has a dedicated fanbase with over 95,000 Instagram followers and coverage in numerous major publications. Because of Oui the People’s ardent supporters, it was shocking when Young took to her brand’s TikTok this past July to warn her audience that many of their “favorite Black-owned brands may close this year.” In her video, Young voices her frustrations after watching many of these businesses struggle or close down altogether. She attributes this trend to a recent decrease in financial support and visibility, and she calls for her audience to continue to shop their favorite Black beauty brands. The video, which has been viewed over 100,000 times, illuminated a much greater issue that has been bubbling under the surface of the beauty industry for the last few years.
After the murder of George Floyd in 2020 and the subsequent rise of the Black Lives Matter movement, people turned to major retailers, big-box corporations, and even everyday consumers to hold them accountable for their support (or lack thereof) of the Black community, including investment in Black-owned brands. This prompted an uptick in sales for diverse businesses and an outpouring of support in the form of Diversity, Equity, and Inclusivity (DEI) grants and programs. Google and Glossier both introduced diversity programs in 2020 that promised Black founders financial backing and mentorship. That same year, Sephora was the first retailer to sign on to the 15 Percent Pledge, committing 15 percent of the store’s shelf space to Black-owned brands. In 2021, Sephora also revamped its existing accelerator program to focus specifically on BIPOC brands. Now, some of these initiatives are under attack, and brands are at risk because of it.
The Atlanta-based venture capital firm Fearless Fund was forced to suspend their Fearless Strivers Grant Contest this past June after finding itself in the throes of a legal battle. The grant program was dedicated to bolstering Black woman-owned businesses and rewarded recipients $20,000. In September 2023, the American Alliance for Equal Rights—the same conservative activist group that helped end race-based affirmative action in colleges—sued the venture capital firm, claiming that the grant program was in violation of Section 1981 of the 1866 Civil Rights Act, a law prohibiting racial discrimination when enforcing contracts. Ironically, this act was initially put in place to protect the rights of Black people post-slavery. This past September, almost a year after the initial lawsuit was filed, the VC settled the case, permanently terminating the grant contest. The firm itself remains open and is continuing to provide education and funding to under-resourced entrepreneurs through other avenues.
The case, though, ignited a public outcry from fellow Black business owners and charitable foundations, as similar grant programs could be at risk of being targeted; opponents of DEI initiatives have long believed the false idea that these programs offer Black entrepreneurs an unfair or undeserved advantage over their non-Black counterparts.
“These small business owners, who happen to be people of color, absolutely deserve the right to access to capital. Before these initiatives, they didn’t have it,” says Melissa Butler, founder of The Lip Bar, a makeup brand specializing in affordable makeup essentials.
For current and aspiring Black business owners, starting and sustaining a company is often not just a matter of passion or trying to fill a gap in the market. They must also contend with a combination of socio-economic imbalances that place Black households, and thus Black entrepreneurs, at a staggering financial disadvantage. “There is a huge wealth gap,” Young says. “There is such a disparity where the Black community is paces behind our white counterparts economically, which is why we need these programs.”
According to a 2021 study by the Center for American Progress, the average Black household holds only 14.5 percent of the wealth of the average white household. Still, women of color are the fastest growing demographic of business founders, per J.P. Morgan, even as they continue to be among the least funded. Ayana Parsons, the co-founder of Yardstick Management and the former COO of the Fearless Fund, notes that according to data from the Fearless Fund, Black women only received .39 percent of total venture capital funds distributed in 2022. That’s barely more than $1 billion in a $288 billion industry.
Beauty has always been deeply ingrained in the Black experience. It’s evident in the sanctity of barbershops and hair salons, the clicking of long, colorful acrylic nails, and the shine of chestnut-brown lined, glossy lips—all mainstays in the community. Yet, until fairly recently, you’d be hard pressed to find more than a handful brands that catered to the needs of Black women.
It wasn’t until the launch of Fenty Beauty in 2017, which debuted with a 40-shade foundation range, that existing beauty brands were challenged to expand their own offerings beyond the few shades previously meant to account for the entire spectrum of Black skin complexions. This mainstream beauty revolution, coined by beauty insiders as the “Fenty Effect,” illuminated to the world what Black people already knew: that authentic representation of our community breeds successful business, and that it’s paramount to support Black founders who understand the needs of their consumers. Ahead, we talked to six Black women entrepreneurs about the importance of investing in Black-owned brands—now and always.
Oui the People’s Karen Young on Investing in Your Community
“I was motivated to speak out because it felt like, at least every month, a brand was quietly coming out saying that they were closing or downsizing. It felt like brands were carrying the burden alone. It was frustrating, because no one was talking about it. It is difficult to raise capital in general, and when the market is volatile, it’s even harder. If there’s not enough genuine, authentic interest in your brand, gaining access to capital is even more challenging. We, as founders and as Black people, are the canaries of culture through beauty and fashion. The origin of so many of the big trends that become mainstream or end up on runways can be traced back to the Black community. The way a Black woman can envision a world that she wants to build, and figure out a way to build it and make it a reality, is unbelievable. But we’re always going to see that innovation, we’re always going to see our people trying.”
Ayana Parsons, Yardstick Management and Fearless Fund Co-founder, on Investing in Your Exit
“When it came to co-founding the Fearless Fund, I realized that there is a psychological security that comes with looking across the table and seeing an investor that looks like you. Because a lot of investors don’t look like me, where does that leave women of color when they are trying to raise money? It leads them to a lot of no’s and sometimes into situations with investors who have no understanding of the communities they’re trying to serve.
With this in mind, alongside my husband, I co-founded Yardstick Management, a boutique management consulting firm, which we recently sold to private equity, making it the largest Black-led consulting exit. I’m so grateful to have seen both sides of this industry and successfully exit, because that’s the dream. The dream is to be able to generate wealth. It’s my belief that when you create wealth for your family, you can create jobs through companies, you can transform communities, and quite frankly, you can also help close disparities whether it be health, educational, or wealth, because they’re all related.”
Brown Girl Jane’s Malaika Jones on Investing in Good Business
“What I know to be true is that it is an emotional and instinctual process to invest in people who look like you or that you understand. It’s important for us to sit on both sides of that table. With Brown Girl Jane’s main VC being the Fearless Fund, I talk to them, and I know they get me.
I never have to over-explain myself or defend my ideas. They advocate for me. It also goes back to being good business. When you look at the people who drive culture and create beauty trends, to not invest in those people and those founders is just awful. It’s on the investment community to realize where they are leaving a ton of growth potential and business impact on the table.”
Femly’s Arion Long on Investing in Your Health
“I started Femly after being diagnosed with a non-cancerous tumor that was linked to chemicals in feminine care products. Right then, I noticed that there was a need for healthier options. Having smaller brands innovating in the feminine care aisle is extremely important.
Black women are 30 percent more likely to get cervical cancer with a mortality rate that is 60 percent higher than our white counterparts, according to the American Journal of Preventive Medicine. I was frustrated with the lack of sustainable, chemical-free menstrual care products. I see myself as both a consumer and a founder, finely tuned with the needs of my community, so I want to deliver products that work for them and are healthy.”
Thirteen Lune’s Nyakio Greico on Investing in the Future
“I started my career in beauty over 23 years ago with a luxury skin-care brand, Nyakio, named after my grandmother. Years later, I co-founded Thirteen Lune with a mission to debunk the myth that Black and brown beauty founders only make products for themselves. But we also wanted to hyper-prioritize a consumer that’s been underserved for far too long. To date we’ve raised about $12.5 million for Thirteen Lune. As we are currently fundraising and supporting our brands, we’re seeing how tough funding is within this economic landscape, especially with diversity programs taking a hit.
I do think that there are categories of investors who want to move the needle forward with an understanding of what the world will look like in the future. From a strictly business standpoint, the smartest investors are those who are looking at the profile of the next 50 to 100 years of consumers and not just looking at what the profile was 50 years ago in regards to spending power. It’s not our job to take down an old paradigm, they’ll take themselves out. It’s our job to usher in a new one.”
The Lip Bar’s Melissa Butler on Investing in Your Story
“I started The Lip Bar because I noticed a shift where people in our community were looking outside of ourselves for our beauty goals. It was frustrating. So I wanted to make a statement that beauty did not just look like one thing.
When we started I had no money, no team, and I realized that while not having access to capital is challenging, you don’t always need capital—sometimes you need a story, a clear vision, and a greater purpose. We have to take responsibility as consumers. If you love a small business, you have to support it. So as we continue to move our support from larger corporations to smaller brands, we have to look at our own individual shopping patterns. I think we’ve given the idea of fundraising way too much power; we see it as almost a right of passage. Just build your business. Build your community. Make something that people really care about and need and keep them coming back again and again. All you need is a great story and great product. So, that means that right now is the time to get creative and luckily that’s what we do best.”
These interviews have been edited and condensed for clarity.
Tasha Nicole Smith is ELLE Magazine’s beauty assistant. She loves all things hair, makeup, and skincare so you’ll find her talking about it here. She enjoys Marvel movies, a good pair of vintage heels, and lemon drop martinis and also shares a birthday with Beyoncé, which is her go to fun fact.