Minority-owned businesses truly are the backbone of many of our communities. They’re the restaurants we love to frequent, the stores we shop at, the businesses we rely on. Additionally, they create jobs and make our neighborhoods more vibrant places to live! So, how can we support them this fall, beyond just shopping at their establishments?
Small Business Saturday is coming up, and there might be a few minority-owned small businesses on your shopping list already, but did you know that there’s another way you can support them?
As a disclaimer: this is not investment advice. These are financial investments and there is no guarantee of a return; small business lending is risky and investors could lose part or all of their investment. Read on to find out more about why Small Business Saturday is a fabulous time to diversify your investment portfolio in more ways than one.
What makes minority-owned businesses so special?
So, when we’re talking about minority-owned businesses here, we’re mostly talking about a few discrete categories of identity that usually have a tougher time getting the support they need in the small business world. This includes businesses owned by people of color, particularly Black-owned businesses, women-owned businesses, LGBTQ+-owned businesses, veteran-owned businesses, and immigrant-owned businesses.
While obviously identity is intersectional, and everyone’s experiences are different, a common thread of a lot of these businesses is that it often takes a fair amount of grit and determination to achieve.
Often, these identities have less connections in the business world that give them a leg up, less assets to begin with, as well as implicit bias and other intangible factors to overcome. Additionally, in the past year, they’ve often been left out of essential grants and government stimulus packages.
Yet, they still persist! Minority-owned businesses are often key to revitalizing their communities, adding jobs, and being small business leaders in their neighborhoods.
Honeycomb is a great place to find minority-owned businesses seeking investments
Did you know that 24% of Honeycomb campaigns are run by minority-owned businesses? We take our commitment to improving minority business owners’ chance of finding funding for their business seriously. Check out live campaigns currently funding!
Why it’s important to invest in minority-owned businesses
So, let’s get into it: what exactly makes it harder for minority-owned businesses to access funding through normal means?
Well, to be frank, the traditional landscape for small business funding is pretty bleak for everyone. Last year, only 13.6% of bank loans for small businesses were approved - and this number dips even lower if you add a minority category to the mix.
Furthermore, it’s sometimes more difficult for minority-owned businesses to find investors. Their inner circles might not be able to sink in thousands of dollars for a business, as much as they believe in it.
This is why crowdfunding can be a great opportunity for businesses in situations like this, because it allows them to collect many different small amounts of money. With investment crowdfunding, like what Honeycomb does, it gives them the added bonus of being able to take out a loan from their communities and in the process pay back their neighbors.
Kinds of minority-owned businesses that have financed their growth on Honeycomb
At Honeycomb, we’ve had the opportunity to work with all kinds of business owners from diverse backgrounds, and have helped them reach their funding goals. These businesses span across industries from distilleries to coffee shops to restaurants and cosmetics!
One Black-owned business that ran a superstar campaign with us was Guidance Whiskey, a whiskey brand based out of Nashville, Tennessee. Owner Jason Ridgel was seeking funding to expand the brand’s distribution and marketing efforts, and raised $120,000!
“I was given an opportunity to be one of the first - I call us the ‘freshman class’ of minority-owned brands in spirits, and we won’t live to see how this ends, you know. Being one of the first brands in the market, it’s my responsibility to hold the door open for those that are coming behind me. I feel that it’s our job and our duty, and that’s what we do,” says Jason.
Honeycomb has also had the honor of helping several immigrant-owned businesses grow, including Kiin Lao and Thai eatery in Pittsburgh. Kiin was rebranding from beloved Squirrel Hill restaurant Bangkok Balcony into a new concept that combined Thai favorites with new Lao dishes. Owner Norraset Nareedokmai raised $33,000 with Honeycomb for this rebranding.
Women-owned businesses also make up a major population of Honeycomb’s campaigns - 48% of our campaigns are run by women-owned businesses. One of these campaigns was our largest campaign to date - Square Cafe! Owner Sherree Goldstein raised $250,000 to move her landmark brunch restaurant to a location three times its size last year. She’s also an incredible advocate for women entrepreneurs seeking to make it in small business.
While Rainbow Capitalism runs rampant and brand after brand show their ally-hood one month at a year, there are LGBTQ+ owned small businesses on Main Street that deserve our support all year round! Scoot! Craft Cold Brew is one of our favorites of these businesses - they’re based out of Cleveland, and raised $49,000 to fund the build-out of their cold brew coffee taproom.
Finally, there are veteran-owned businesses. Despite obviously displaying grit, veteran-owned businesses often find it difficult to get funding for their businesses because, well, they often don’t have business experiences since they’ve been busy fighting for their country! Lucky Sign Spirits is a distillery in Millvale, Pennsylvania which crowdfunded $122,000 to grow their business.
“It's easier to get funds, even if it's smaller amounts, from family and friends because they want to be a part of it,” says Matt Brudnok, one of the owners at Lucky Sign Spirits. “But when someone we don’t know invests, it means they took a cool, calculated look at getting their money back, and they think that we're worth investing in.”
Small Business Saturday is the biggest day of the year for local businesses crowdfunding on Honeycomb
So, what is it about Small Business Saturday in particular that makes this the perfect time to invest in a local business? We’re going to have a ton of different campaigns ready for you to check out. Now is the time to check them out and diversify your financial portfolio - not just by investing in a small business, but also a minority-owned one at that. These businesses are all ready to grow, and are choosing to seek capital from the greatest funding resource out there - their communities, family and friends, and you!
Excited to learn more? Fill out this form to jump on to our investor newsletter and get immediately informed of the exciting investment opportunities you can take advantage of.