She Was Rejected by 86 Investors Before Hearing a Single Yes--and It Was From Jay-Z
As a Black female entrepreneur in America, Denise Woodard knows about taking risks. While still working a day job in 2016, Woodard launched Partake Foods, a maker of allergen-free cookies based in Jersey City, New Jersey, with her life savings, which was around $50,000. The company struggled for a couple of years before she finally landed a break--achieving regional placement for Partake Foods at Whole Foods and Wegmans Food Market in 2018--but she needed cash to boost production. She sold her engagement ring for half of what it was worth. By the following year, she had exhausted her 401(k), and despite successfully launching in two major chains, she had been rejected by 86 investors.
Woodard finally heard a yes in June 2019, when Jay-Z's Marcy Venture Partners led a $1 million investment in the company. The Fresh Market and Sprouts chains soon put in orders--helping her business widen its footprint to 350 stores in the U.S. by the end of 2019, up from just 50 in 2017. By the end of 2020, thanks to a deal with Target, Woodard projects that her cookies will be in 2,700 stores nationally.
Partake has experienced a surge in growth since the killing of George Floyd by Minneapolis police, which inspired both nationwide protests and a call to support Black-owned companies. In June, Partake had more online sales than it had in the entire first quarter--in part because a massive order for product stemming from an initiative supporting drive-in theaters across the U.S. Actor-producer Michael B. Jordan and his production company, Outlier Society, are behind the effort. And although Woodard declined to offer specifics, she says Partake's revenue increased more than 10-fold in the past 12 months, compared with the 12 months prior.
"We've never seen so [many] inbound emails come our way from retailers, from potential investors, from people I cold emailed for years and all of a sudden now I've made it to the top of their inbox," Woodard says.
While Woodard says she welcomes the interest, she feels conflicted about it. "I find myself getting angry and sad because a lot of the actions seem performative," she says. "But as a businessperson, if I can use that revenue to generate change for Black people, it's worth taking it."
She sees what's happening now in the business community as one step toward leveling out historical inequities. "So many deals are made on the golf course or through college roommates, through these social networks and capital that most Black people in America did not have," Woodard says. "While we don't know how much meaningful change will be made, there's definitely a groundswell right now, and we need to take full advantage of it."
To that end, here are five lessons she has for fellow founders of color starting up today.
1. Create a community.
While it's true that more companies and investors are looking to support Black-owned businesses now, change won't happen overnight. And you should be ready to hit roadblocks. Investors still tend to "go with what they know," she says. "Many of the ones you will pitch have never previously invested in a woman of color."
To persevere, Woodard suggests joining or creating a community of other founders of color. Together you can support one another and act as sounding boards for ideas. "I've been fortunate to have a lot of people pouring [their time and effort] into me and now I'm able to reciprocate," Woodard says. "That is part of the joy of it all and that's how we uplift one another."
2. Show the company's potential.
Woodard, who received an MBA in supply-chain management from Arizona State University in 2010, had plenty of opportunities to hone her pitch. After many rejections, she stopped touting Partake's social media buzz and breadth of placement in retail outlets. She knew that if she landed funding, growth would come. Instead, she made sure that her company's spending and profit margins broadcast a company with healthy potential.
"If you build your business in a way that's not fully reliant on venture capital--very lean and very scrappy--that's going to make the fundraising journey easier no matter who you are," she says.
3. Look for diversity programs.
Woodard recommends that founders of color look into supplier-diversity programs at major retailers. That's how her relationship with Target began. She attended a Black-owned business fair hosted by the retail giant in February 2018. There, she got tips from other diverse entrepreneurs and found inspiration.
She also learned about Target's supplier diversity program, which works to boost spending with minority-, women-, veteran-, and LGBT-owned companies. By registering a company as a diverse supplier, she says, founders can increase their chances of doing business with Target or other retailers. "The supplier diversity teams at these large retailers are really, really excited, and it's their job to create a more diverse supplier pipeline for their organizations," Woodard says.
4. Remember your why.
Stay true to what you want to achieve and keep front and center why you're doing what you're doing. For Woodard, her why is her 5-year-old daughter, Vivienne. There are many things Vivienne is allergic to--bananas, corn, and eggs, to name a few--and that made finding safe and tasty snacks a challenge, Woodard says. Success for Partake meant Vivienne and other children would have another snack they could enjoy. It's a problem Woodard sincerely worries about, and she felt investors appreciated that personal element of her story, she says.
5. Believe you can do it.
Woodard made it through, and, she says, other founders can too--if they fight through those hard times. "If you really believe that you have a good product and are building what could be a big business one day, just keep going," she says. "I really, really believed in what we were doing and in the product and in myself, and I knew it would come together."
Correction: An earlier version of this article misstated Partake Foods's involvement with Jay-Z's Marcy Venture Partners. It led the company's June 2019 $1 million round.