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When Maya Lovelace was preparing to open two restaurants in Portland, Oregon, she launched a crowdfunding campaign on Kickstarter to cross the fundraising finish line. She subsequently received a text message from a male restaurateur: “Running a Kickstarter is for kids with cancer—chefs should be able to succeed and get funding based on their skills alone.” Lovelace ended up raising $85,778 on Kickstarter, surpassing her goal of $75,000.
“Women are often expected to be gracious and giving in this industry, so when they turn around and ask for something, it’s hard or confusing, especially to men,” Lovelace told the audience at Eater’s Young Guns Summit on July 27. The conference focused on how the next generation of chefs and operators can improve restaurant culture.
Lovelace’s panel on fundraising got City Paper thinking: What challenges do female entrepreneurs in D.C. face when they start a food or drink business and begin raising capital? Everyone from a soup maker and a bakery owner to fast-casual empire builders explained how they turned their ideas into fully operational businesses and whether their gender played a role in their successes or setbacks.
Knowing your numbers will make it much harder for investors and banks to say no.
“Access to capital is the number one issue women business owners have,” says Emily Bruno, who opened the first Denizens Brewing Co. in Silver Spring in 2014 with her wife, Julie Verratti, and head brewer, Jeff Ramirez. Bruno was previously the research and policy director at the National Women’s Business Council.
In the early or “seed” stages, most aspiring business owners turn to friends and family as potential investors. “Think of it as friends of friends of friends who want to buy a piece of the company for a smaller amount than a professional investor,” Bruno says. Money from venture capital firms or strategic investors typically comes later, when a business looks to multiply. “Working with friends and family is the lowest barrier to entry,” Bruno says. “We were working with people who knew us and our work ethic. We didn’t have to build credibility.”
Debt financing is another option. Using this strategy, entrepreneurs borrow money from investors or banks, which often require assets to be posted as collateral for the loan. This method is generally cheaper in the long run and allows entrepreneurs to retain more equity, according to Bruno. “You have to be willing to put up something if you’re trying to do debt financing,” she explains. “Our house is up as collateral. If our business fails, we lose our home. As two 40-year-olds, that’s all the net worth we have.”
Bruno and her partners fought the most friction when they sought loans from banks and the U.S. Small Business Administration, especially as they expanded from one brewery to two this spring.
“You don’t really know if it has to do with your gender or race, but you feel like it has to to a point,” Bruno says. They met resistance from banks they approached for loans despite what Bruno describes as 30 years of combined relevant experience. “If we’re not good candidates then who is? Are we getting more scrutiny as two women and a guy with the last name of Ramirez? Is there more insecurity on the bank’s part because we don’t fit the stereotype of who a business owner is?”
They eventually obtained two loans: a state-backed commercial loan for their Silver Spring location and a multi-million dollar SBA loan for Riverdale Park. SBA loans are more expensive because they have higher interest rates and higher fees up front “even though they’re supposed to be for people with less access to capital,” according to Bruno.
Bruno was most frustrated when her team sought a loan for the new brewpub in Riverdale Park. “We had to switch our bank because our existing bank wouldn’t give us the loan,” she explains, adding that they had a thorough plan and budget and had been responsible borrowers. “They didn’t trust us to succeed. Would two white guys have had that experience? I don’t know. If it doesn’t have anything to do with gender, it means it’s way too hard for successful small businesses to get financing in this area.”
To prepare for showdowns at the bank, Bruno advises women to know their numbers and be on top of their business plans so they can respond when underwriters dig to determine if a business can turn a profit. “If you have a case based on numbers, it clears the path no matter what situation you’re dealing with,” Bruno says. “Even if you don’t have credibility because you don’t look like everyone else, you at least have credibility because you know your numbers better than anyone else.”
HipCityVeg founder Nicole Marquis similarly attributes some of her success to writing a meticulous business plan. “I knew down to how many forks I was going to have in the building at the time,” she jokes. In July, she opened the second D.C. location of her regional vegan fast-casual chain. She hopes to have eight operational HipCityVeg locations by the end of September.
The first HipCityVeg opened in Philadelphia in 2012 after four years of research. “I was very careful who I told because I had this amazing idea I had to protect,” Marquis says. “But I had a family friend who was a mentor. He said to write a business plan.”
It was sound advice. “The first people who approached me were husband-and-wife health enthusiasts,” Marquis says. “The first thing they asked me for was a business plan. I went over the numbers again and again so I was able to answer all of their questions. If I hadn’t done the work, I don’t know if they would have had faith in me.” She says they gave her “a large sum of money to open a couple of restaurants.”
Investing in women is trendy, but female entrepreneurs would prefer investors seek them out for their ideas.
“Sexism is so 2005,” says Soupergirl co-founder Sara Polon. The former comedian started her vegan, from-scratch soup company in 2008 with her mother and can only remember being talked down to based on her gender twice over 10 years. “If you’re not going to take someone seriously because they’re a female, I’m sorry, you’re a dinosaur. Some of the coolest businesses out there are owned by women.”
Polon wants to be identified as an entrepreneur without reference being made to her gender. “When I approach the bank and investors I say, ‘Listen to me as a business owner.’ That being said, I find that investors are seeking out female entrepreneurs and I’m going to use that to my advantage.”
D.C. is seeing ripple effects from Silicon Valley, where, Polon says, there are “a lot of pissed off women” being shorted opportunities. “You hear these stories of women having so much trouble getting in front of people and harassment,” she says. “It’s led to a global introspection for the investment community and that’s bled into our world.”
Polon’s advice for up-and-coming entrepreneurs preparing to raise capital is to “just be a badass.” “If you have a passion for your business and your numbers are sound, it’s off to the races,” she says. “Just be confident. That’s hard for women. Even if you’re not, pretend you are. Don’t let anyone know that at 3 a.m. you’re in the fetal position. That’s between you and your teddy bear or your boo.”
Shizu Okusa of JRINK and Apothékary shudders when she thinks people may have invested in her juice company for any reason other than it being a worthwhile idea, especially given the business acumen she acquired working for Goldman Sachs and the World Bank. “I hope people gave us money not because I’m a minority or a woman,” she says. “Those are the buzzwords these days. They’re trying to put money into social impact. Bullshit. This is a business.”
After founding the company in 2013 with $25,000 in savings, Okusa started making cold-pressed juice out of shared commercial kitchen space in Union Kitchen. Her first retail location was inside Epic Yoga in Dupont Circle. When it came time to grow the business, she called on friends, family, and angel investors, steering clear of venture capital. “Once you take in money that outpaces the business’ needs, it makes you change how you grow, the values of the company, which I didn’t want to compromise on.”
Okusa is pleased, however, to see female investors take interest in her company. “Because I’m a woman, I can speak the language of other woman investors,” she says. “We’re starting to make more money as women. They trust me and know what we’re building and they want to feel comfortable about supporting a non-venture backed company.”
More than half of Buttercream Bakeshop’s investors are women, according to owner Tiffany MacIsaac. “I don’t know if that’s because it’s a woman-owned business,” she says. “I try to look at everything as a level playing field, even if it’s not.” The bakery, which MacIsaac opened in 2016 with her business partner Alexandra Mudry-Till, is part retail shop and part booming wedding cake business.
“I’ve never felt that being a woman has held me back,” MacIsaac says. “There are a lot of people who say I didn’t get something because I’m a woman or X, Y, Z. Maybe it’s because not everyone gets what they want? If I don’t get something, I think about what I could have done differently to get a different outcome.”
At first MacIsaac felt uncomfortable in front of investors. “I really don’t like owing people money,” she says. “Everyone I asked I said, ‘If you need this money to survive, please don’t give it to me. I’ll kill myself to make your money back, but if something goes wrong …’ They were like, ‘We’re investors, we know how this works.’”
MacIsaac turned to Kickstarter to raise a final bundle of cash after her contractor went over budget. She received $49,027 from 335 backers. “The advantage of the Kickstarter is it doubles as a way to connect with the community,” she says. Those who pledged $68 or more got a free 6-inch cake. “I wasn’t giving up shares and it was a way to find future customers.”
Since launching vegetarian taco company Chaia, co-founders Suzanne Simon and Bettina Stern only had one negative experience that invoked gender. According to Stern, a former team member they fired told them, “You’re two women, it’s like you have bullseyes on your back. Be careful. People will try to take advantage of you.”
They didn’t encounter anything similar while raising capital leading up to the opening of their Georgetown restaurant in 2015 or their Mount Vernon Triangle restaurant in 2019. “Chaia was a really attractive brand when we set out for our first seed round in September 2014,” Stern says. “We secured money really quickly and it was mostly men who gave us money. It wasn’t until our second seed round that we brought in a few women.”
Like others, Stern wonders if some investors ponied up because of their gender. “Two women in business was attractive to them because that’s hot right now,” she says. “They want to be involved in that and [be] seen as feminists.”
The Chaia partners also secured an SBA loan and sought out strategic investors who now have some equity in the company. “Now we’re ready to go big or go home,” Stern says. “I didn’t open Chaia in Georgetown to open one taco shop. I don’t want my tombstone to say, ‘She had a taco shop in Georgetown.’ I want it to say, ‘She had a taco empire. She created taco trust funds for her grandbabies.’”
Women should consider the financial consequences of tying a business to a love interest.
“When people come to me saying, ‘I’m thinking of partnering with my significant other,’ my first response is ‘No!’” says Sunyatta Amen, the owner of two locations of Calabash Tea & Tonic. “It’s difficult enough. There’s no prince. The only Prince I liked died a couple of years ago.”
Amen grew up working at her parents’ herbal shop and juice bar in Harlem and has opened seven retail spaces for herself or family members in D.C. Calabash sells everything from immune-boosting tonic and superfoods like raw Incan berries to Jamaican jerk seasoning and teas with names like “Black Magic Woman.”
“As a woman there’s this sort of forgone conclusion that you will join finances and it’s not a big deal,” Amen cautions. “You buy a house together, have joint bank accounts, take their name. All that conveys in terms of losing your own identity in some capacity.”
Speaking from personal experience, Amen says a split can adversely impact your credit. “The work that myself or someone like me may have been doing for decades is undermined by my inability to walk into a financial institution and say, ‘Here’s my experience and money in the bank,” she explains. “They’re like, ‘Yeah, but your credit score is here and we want it to be here.’”
There’s a behind-the-scenes network of female entrepreneurs in D.C. helping each other and the next generation reach their goals.
“As a woman, it’s hard to put into words how grateful I am for the women who blazed the trail before me,” Polon says, emphasizing the work of Ruth Gresser of Pizzeria Paradiso and Jamie Leeds of Hank’s Oyster Bar. “The camaraderie behind the scenes, the support network is shocking what we all do for each other.”
Bruno agrees. “I have a lot of really positive experience working with women in the industry in D.C. … People are coming together and supporting one another’s business, buying each other’s products, and hosting meet-ups to pool resources or share information.”
Okusa, for example, will happily share her deck—a brief presentation used for pitching investors—with others. “I send it to my friends and let them use it as a base so they don’t have to waste their time because it takes so much time,” she says. “I’m happy to be a resource. Money is one of those taboo topics no one wants to talk about, but it has to happen.”
Female business owners seem to have a shared urge to nurture others. Here’s The Scoop has only been open since June 29, but its founder, Karin Sellers, is already thinking about how to pay it forward. The city awarded Sellers a $50,000 Great Streets Retail Small Business Grant to help the ice cream shop near Howard University get off the ground. She wasn’t able to obtain a loan because she didn’t meet the requirements despite previously owning her own hair salon for 15 years.
“I want to lead by example,” Sellers says. “I want to use the ice cream as a draw for all types of people.” Her goal is to hire from the community and connect employees with people in her network with relevant skill sets. “If you want to open a business and have the greatest idea, but don’t have the management and financial knowledge, you have to kind of restart. I want to get them young so they understand how to conduct themselves. A lot of kids don’t get that guidance.” Sellers’ mission isn’t limited to women and girls. “I have two sons of my own,” she says. “I know the struggles of young black males.”
Amen shares the same spirit. “A real master is judged by how many other masters they create,” she says. She already offers profit-sharing for Calabash staff and hopes to convert managers into franchisees.
“My job is to help other people who may be awesome workers who want to put their back into it, but can’t go to the bank and get a loan,” she says. “My goal is to help them crowdsource funds like we did with our shop and let them come up with the rest of it through friends and family so they have skin in the game.”
Her own hits and misses have positioned her to offer wisdom. “As an old witch, that’s the advice I can give to young witches.”