Editorial Note: Opinions and thoughts are the author’s own and not those of AFROTECH™.
For many founders in the beauty and lifestyle space, the measure of success isn’t just in sales but also in the value of an exit. Recently, Hailey Bieber’s beauty brand, Rhode, was acquired by e.l.f. for $1 billion.
Founded in 2022, the beauty brand has reached its valuation quickly thanks to Bieber’s name recognition and viral social media campaigns. But while Bieber has been praised for selling her company, the majority of Black founders are accused of being sellouts by Black customers when they do.
Over the past several years, Black-owned brands like The Honey Pot Company, Mielle Organics, and Briogeo Hair Care have been acquired by large conglomerates. For every acquisition, a large portion of their Black customers have complained or claimed that they would no longer buy from the brand because they view the acquisition as a form of selling out.
Black founders are held to a different standard than their white counterparts. They have to deal with racism in the industry while facing criticisms from Black consumers whose words carry weight, not just with them but with investors as well. Investors view Black brands as a risk not only because of preconceived notions about Black businesses rooted in racism but also because of fears that investing in the company will invite backlash from the Black community.
When the feminine care brand The Honey Pot Company, founded by Beatrice Dixon, was acquired early last year, customers expressed their disappointment online.
Some Honey Pot Company consumers said that Dixon should never have sold the business and even claimed to boycott the company’s products. However, what many customers don’t understand is that these moves aren’t about the owners relinquishing complete control of their companies but rather about getting paid their worth.
Acquisitions are typically the next step for companies experiencing exponential growth, as they often have more resources to expand and more time to invest in other projects. A company reaching a certain level of success should be a cause for celebration, especially for Black brands that often face fewer opportunities. Black founders deserve significant compensation for their hard work, and for the majority of them, acquisitions provide that opportunity.
The ongoing boycott of Target is a perfect example of the power of the Black dollar. After altering its stance on Diversity, Equity, and Inclusion (DEI) in response to the Trump administration’s attack on DEI in the federal government and the private sector, many Black customers have boycotted the company. In just a few months, foot traffic at Target has slowed, and sales of Black brands at the retailer have declined.
Black customers may not be as respected as they should be, but investors who want to put their money behind Black brands want to ensure that their community has their support. If there is consistent backlash from the Black community about brands investing in their future, investors are less likely to see these brands as viable.
As consumers, we should give Black founders more grace when they are acquired. Black-owned brands are few and far between, and if we withdraw our support or dish out unfair criticisms rooted in emotions, we’re alienating brands from reaching their full potential.
