There is undoubtedly demand for Black-owned brands, but without the funding to get them there in today’s competitive market, how can entrepreneurs move forward? Despite more voices demanding their products, investment in these companies declined in 2023 to 0.48%. Even more surprisingly, this was the third consecutive year that funding was dwindling.

Coming to their aid is BrainTrust Fund, the $25 million venture fund of BrainTrust Founders Studio, the largest members-only platform focused on Black beauty and wellness founders. Kendra Bracken-Ferguson (CEO) and Lisa Stone (Chief Investment Officer) are the minds behind the enterprise, seeing BrainTrust Fund as a “blue ocean” investment opportunity to help push the entrepreneurs who are leading culture and creativity in the industry. Anchored by WestRiver Group, the investment branch is advocating for the beauty brands of tomorrow.

To qualify, members need at least one Black-identifying co-founder and brands must demonstrate $1 million in revenue from a marketed-tested MVP (minimum viable product), as well as be members of the BrainTrust Founders Studio. The fund is open to 20 subsectors, ranging from color cosmetics to AI-driven platforms. Its founder community, with 91% Black female members, has doubled to 209 individuals in the last year. Its investor community includes 77% female and 76% BIPOC members.

In January 2023, the enterprise participated in Thirteen Lune’s $8 million seed round. In June 2023, it invested $1 million in Listener Brands, the parent company of Black haircare brands CurlMix and 4C Only. BeautyStat, Uoma Beauty, and AI-led haircare brand Myavana, whose technology was recently integrated into Ulta’s virtual try-on GLAMlab, are also included in the company’s portfolio.

Now the company has released its 2024 Economic Advancement Report, with data compiled from its members on commercial, cultural, retail, and product leadership. CreatorIQ developed a third-party assessment of all participating BrainTrust Studio founders and brands to determine the ethnic diversity among its brand followers.

Revenue and Employment Opportunities

• $142.6 million in collective sales, up 42.5% from last year
• Venture-backed companies drove 69% or $98.5 million of sales
• $44 million in sales were bootstrapped by founder-led business development
• Of its members,10% report revenues of $1+ million to $25 million, 20% revenues of $10,000 to $1 million, and 70% are at the prerevenue or “start” phase
• 332 full-time jobs created in the last 12 months (luxury salon Press Roots being the largest employer with 112 employees)

Retail Success

• 39,000+ product SKUs sold, up from 4,000+ last year (the most sold at Thirteen Lune, with Relevant being its best-selling brand)
• 72%+ more product SKUs marketed
• Product presence at 47,000+ retail doors, up from 23,000+ last year

Acquiring Capital 

• 25 founders have raised $114.9 million in venture capital or angel investment since inception
•  97.6% of the above amounts is concentrated in 11 companies
• 10% of members delayed fundraising to avoid diluting ownership of their companies

A Diverse Customer Base

• Black-led companies sold more to Asian (15.1%), Caucasian (54.6%), and Hispanic (13.1%) customers combined rather than solely to Black customers (17.3%)

Co-written with venture analyst Ryan Pierce, the report also featured entrepreneurial insights from Piersten Gaines, founder and CEO at Pressed Roots, and Candace Mitchell Harris, founder and CEO at Myavana. Gaines comments, “For decades, women of color have been an afterthought in this space, especially when it comes to luxury beauty services. I would like Pressed Roots to highlight the value that this demographic brings to the industry so that entrepreneurs, corporations, and brands begin to create products and services with them in mind.” Commenting on the wider implications of her company’s partnership with Ulta, Harris adds, "Through our personalized haircare technology that will innovate and elevate our shopping experiences, we're excited to bring to market better identification and understanding of our unique hair strands and unique hair journeys while partnering with the nation's largest beauty retailer that prioritizes innovation and inclusion.”

As evidenced by the report, Black-owned brands are a force to be reckoned with in the industry, creating products that appeal to customers across the board. “These data further prove Black entrepreneurs create beauty and wellness products that everyone buys,” Bracken-Ferguson and Stone state. “Despite the fact that venture funding to Black founders has fallen to a three-year low, Black beauty and wellness entrepreneurs are growing the American economy with new, innovative products and services that drive sales by leading retailers—online and in-store—and create jobs. We are celebrating this commercial and cultural leadership by our members, most of whom are Black women!”

Despite the anti-DEI movement across the US, national retailers are continuing to support BrainTrust Founders Studio members and other Black-owned businesses. As evidenced by the statistics cited in the report, raising capital has been more difficult amid said backdrop, not just in terms of overall amount of investing but also brand founders being even more considered in their selection of investment partners. But brands undoubtedly need support scaling their businesses for the increasingly growing demand from the consumer side. In fact, by 2045, a majority of American consumers (51%) will be BIPOC, and Mintel as well as Statista report that roughly 30% of consumers see diversity as an important brand value.

A conversation between BrainTrust Founders Studio member Kim Lewis, co-founder/CEO at CurlMix and Noozi Nwanji for investment platform Afrotech, was also cited to discuss wealth creation. Specifically, the duo spoke about the community backlash to Procter & Gamble’s acquisition of Mielle Organics and Compass Diversified’s $380 million acquisition of The Honey Pot.

“We think that you’re supposed to hold on to these businesses for 50 to 100 years, and that’s not how Black wealth is made. Black wealth is made by buying and selling companies.” [Lewis] added, “People don’t realize that companies either sell or die. Would you rather them die to say that it was still 100% Black-owned? No, you want them to have big exits so that then they can come back and pour into the community, which they often do. ... People think that founders are rich, and we’re not rich. Many founders are living paycheck to paycheck, and they don’t actually get their big payday until they sell. And then that’s when they can actually impact the community and help people.”

When it comes to impacting that community (and beyond), the report lists four actionable ways for readers to take part: by voting with their wallets, seeing founders as the new influencers and not shying away from building their audience; bootstrapping wherever possible;  only investing with companies that have a proven track record of being business allies; and harnessing the power of community. Given the impressive growth among the BrainTrust Founders Studio’s circle, that final point rings especially true.