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    The Rocket Your Dollar Podcast
    The Rocket Your Dollar Podcast

    The power of Self-Directed investing—explained.

    Women get less than 2% of all financing, whether it be from the VC community or whether it be traditional financing. Dr. Roshawnna Novellus, Co-founder and CEO of EnrichHer, decided she must do something about this especially because women build new companies in the US at a rate of over 1,800 per day. Now with EnrichHer, the FINRA approved debt-based crowdfunding platform, she's making a difference in female founders' lives everywhere.

     

     

     

     

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    Transcription

    Nikki Shear :Welcome everyone to Rocket Your Dollar, the podcast from your friends at Rocket Dollar. In this show, we discuss the power of self-directed investing. Today, I'm filling in for Thomas Young. My name is Nikki Shear and I am a marketing associate at Rocket Dollar and the producer of the show. Thanks for joining us. Let's jump in. Today, I am proud to introduce one of our Rocket Dollar partners, Dr. Roshawnna Novellus, founder and CEO of EnrichHER. EnrichHER is an online crowdfunding platform that can provide up to one million in financing and operating capital to allow carefully vetted women-founded businesses to grow and scale. EnrichHER is registered with the Securities and Exchange Commission as a funding portal and as a member of FINRA.

    Dr. Novellus is a gender equality advocate who believes in economic empowerment and inclusive economic growth. Dr. Novellus holds a Ph.D. in systems engineering with a minor in finance, a master's of science in information technology. Roshawnna was honored as one of the Women Who Mean Business by the Atlanta Business Chronicle, one of the 40 Under 40 by the Georgia Trend, as a Halcyon Fellow for Social Impact fellow, as one of the Top 25 Disruptors and Innovators in Tech, and one of the 27 black founders and investors to watch in 2019 by PitchBook. We are so lucky she is here to speak with us today. Roshawnna, thank you for being on the show today.

    Roshawnna: Thank you so much for having me.

    Nikki: Let's just jump right in. Can you give me a little background on how you got started with EnrichHER?

    Roshawnna: Yes. I was a full-time entrepreneur at the time helping people with financial strategies, budgeting, and planning. I attended a lot of conferences on business growth and the state of business affairs. At every single conference, people noted that women get less than 2% of all financing, whether it be from the VC community or whether it be traditional financing. I said, "I must do something about this because it's ridiculous," especially because women build new companies in the US at a rate of over 1,800 per day. If a woman is in the C-suite of a company, the company is more likely to be successful. Women are typically better stewards of finances. I said, "Why is this the case? Why is there such a huge gap?"

    When I looked at the existing status quo or what's going on currently to finance women-led businesses, hardly any capital source is women-run or women-focused. I definitely wanted to provide a platform that can finance women at businesses no matter the industry, no matter if they're high growth or not. That's why I started EnrichHER.

    Nikki: Wow. Yeah, that sounds amazing. Those are some crazy stats. What was your background that made you feel confident and capable to get EnrichHER started?

    Roshawnna: Well, I've always been a super-duper nerd. You listed several of my degrees and certification. I've always been a person that enjoyed solving problems and I love executing. I love coming up with ideas and going from idea to execution and implementation. That's why school was easy for me and the corporate role was easy for me as well. I knew that with my background in technology, you know, at the time when I started EnrichHER, I was already a full-time entrepreneur and every entrepreneur needs to learn marketing. I felt very comfortable in the marketing space, and I've always been an advocate of more women being in charge of their financing. This stems from my mother. At the age of 12, she told me that all women need to be in charge of their own economic power.

    At that age, she started taking me to investment club meetings and teach me about finance. I thought that all women were taught this. Then when I was exposed to other women both in their corporate career and entrepreneurship career, I realized that there is a huge gap. EnrichHER was the intersection of all of these elements of myself.

    Nikki: I love that. Yeah. I felt like as a woman, I wasn't introduced to finance until college because I chose to be a business major and that's solely why. Now working at a fin-tech startup for a retirement company, I am learning so much more about money and finances than I've ever been given the opportunity. Yes, I do think a lot of women are missing that education. Do you have any ideas on why that would be?

    Roshawnna: I think a lot of times women are marginalized in the education system with family members and the like. A lot of times women just aren't taught these things. Then even when we are taught, women typically need to have more experience than our male counterparts in making financial decisions. I've met many women who said, "Hey, I need to make sure I have a man go with me to buy my first house or to buy my car." It's just like this comfort level, even if that man has no experience. It makes sense that we don't have the experience, but if that person has an equal level of non-experience, women tend to feel more comfortable that way. I think it's just how we're wired a bit. We have to have that courage and belief in self to make these financial decisions, which I know we're all capable of.

    Nikki: I wonder if the... I don't want to say the lack of education per se directly towards women in finance also leads to the disparity between fundraising startups that are led by men and then fundraising startups that are led by women. I'm sure that really ties into it.

    Roshawnna: I think it does a bit, but I think the bigger problem is that most people support others that remind them of themselves. If most investors come from a certain community and are men, they typically pick people who are the younger versions of themselves, right?

    Nikki: Yes.

    Roshawnna: There needs to be more like representation and diversity on both the investor side as well as the entrepreneur side. In addition, as women, we're not really used to the level of rejection that the raising capital landscape typically provides to entrepreneurs. On average, people have like 200 meetings when they're going after a venture capital and you'll get yeses from like four or five. A lot of times, like most, we're just not used to that kind of situation. Whereas men a lot of times are used to rejection or are used to not taking everything personally more so, nut the list goes on. Those are some of the...

    Nikki: No, yeah, that makes a lot of sense. That's a good way to explain it. Is it more women that are not as confident to go out and get fundraising to be go-getters like their male counterparts, or would you say both? A lot of women just don't know where they can get money for fundraising or how to fundraise.

    Roshawnna: I think most women don't know where and how. Then, in addition, we want to be more prepared. We want to have this amazing product with all this traction before we even get to pitching to different financing sources. In order to get to that point, we need more resources and capital. A lot of times we don't have access to the financing we need to feel confident with our product to pitch to investors. Then even if we are confident with our product and our traction, we don't know which investors would be open-minded for our amazing idea.

    Nikki: Yeah. Let's say if I have a business for a year and I make 50,000 in revenue, is that the requirements to become an EnrichHER fundraiser or funder

    Roshawnna: Yeah. Because of all these issues in the equity markets, we're definitely not focused on equity investments. We're focused on debt investments. In order to qualify for a debt investment on our platform, you as the entrepreneur need to be able to repay the investors. Because of that reason, our low end of the bar is 50,000 in business revenue for US-based companies that have been in operation for over a year, but most of the companies that we're able to help actually have at least 150,000 in revenue, but we are able to help those with a lower revenue threshold. But the whole goal is to be able to open up financing to women in a variety of industries. We finance beauty salons and event planners and doggy treat companies, as well as high growth companies. As long as they have that revenue, we can help them with the financing side.

    Nikki: Okay. Let's say I have Nikki's Beauty Salon. I meet all of the requirements to work with EnrichHER. How does EnrichHER support me from there?

    Roshawnna: We are a community of like-minded, thriving women-led businesses and that is called EnrichHER Society. Now all the women who want to be our community can come into EnrichHER Society and join other women on our platform. Within the platform, you have access to different trainings if you would like, interacting and networking with people in your industry and like-minded women, and you have that ability to apply for financing on our platform. With financing, we can help you if you need a plan and make sure you use that financing to get the highest ROI on that money and whatever planning you need. We at EnrichHER are not only a financing platform, but we provide business resources to help each company grow.

    Nikki: Very cool. Then you also open the debt platform up to almost like a crowdfunding site, right, to just investors?

    Roshawnna: Yes. With our funding site... Our funding platform includes the crowdfunding site and direct loans. But for the crowdfunding site specifically, investors can lend to the women on our platform. An investor will be able to look at the business details, the terms of the loan agreement, and decide whether or not they want to participate.

    Nikki: As an investor, I guess one of my questions would be how do you vet the companies behind the scenes?

    Roshawnna: When a company applies, they submit an application. On this application, it has their revenue, their story, the team bios and team dynamics, the why behind their company, and other supporting materials such as press and education and accelerators that they've been in or different milestones that they've achieved with their business. After that, if they want to be on the crowdfunding platform, we do background checks, KYC checks. We look at their financials. We interview the entrepreneur to make sure that she is a good fit for the platform. We do some analysis on the financials to verify that it's reasonable for her to repay the loan that she's seeking. Then after all of those diligence checks are complete, then she is eligible to be on our platform.

    Nikki: Yeah, that sounds like a great system. Do you have any success stories of founders working with you on that system?

    Roshawnna: Yes. To date, we funded 70 companies, 70, but specifically on our platform, I'll tell you about our very first company. Barbara Jones built an IT consultancy and she needed working capital because she trained employees for six weeks prior to placing them on a contract and she didn't have enough funding in her account to do this for a new employee. She was able to go through this process, and she launched her campaign on our crowdfunding website. In less than 24 hours, she raised the full amount that she needed to get the working capital. That was when we launched earlier this year and she's already fully repaid the loan that we provided to her.

    With that new employee, not only was she willing to place or hire this new employee in place, that new employee on the contract, she was able to also qualify for an additional $300,000 contract based on the success of her team. It really had a domino effect in her company and her growth, and I love sharing about her story.

    Nikki: Yeah, that's an awesome story. That's great that that was your first run and it was successful.

    Roshawnna: Yeah.

    Nikki: Yeah, very amazing. Back to the crowdfunding investor, if I wanted to invest in Barbara's company, what would have been the timeline for me to see a return on my loan?

    Roshawnna: All of the loans repay on a monthly basis. You'll start receiving that within 30 days of closing the campaign, so that's after the raise amount. In Barbara's case, she received her funding amount within 24 hours. All campaigns have to stay open for 21 days, but 30 days after that is when the first payment would go to you as the investor.

    Nikki: Okay. Very nice. I already signed up for your newsletter. You let people who sign up for your newsletter know when you have another investment coming up, right?

    Roshawnna: Yes. Yeah. We're definitely educating everyone on that. We've been really focused in the last few months about making sure what we're offering goes in alignment with what people are looking for. We've been really focused on the community and the resources, but now we're receiving excellent feedback on everything and intend to ramp up the number of women that we find on our platform moving forward. We received lots of lots of applications. We received over 3,000 applications since we started seven months ago.

    Nikki: Oh my gosh. That's amazing. You are good at the marketing side of this.

    Roshawnna: Yeah, the marketing I'm like I have that because you can't have a business without marketing, so I force myself to read book after book, go to seminar after seminar, and test and learn.

    Nikki: Well, after you've read all these books and gone to seminars if you could give a business owner one piece of advice about fundraising, what would it be?

    Roshawnna: I have two pieces of advice. One, not take it personally, and then two, aggregate capital from different sources. That's really, really important. I could say that's called crowdfunding, but it's not. I don't mean it on a platform sense. That's what most people think of when I say that. I mean, hey, if you can give 5,000 from this pitch competition, plus you get a business loan from us at EnrichHER, plus you get equity investments for your company, maybe that's the best solution for you. A lot of times as founders, we believe that all of our money needs to come from one effort when in reality that's unusual for most founders. It's just that we're taught that that's how it goes.

    Like I'm going to raise money for six weeks and get all the money that I need. Maybe you don't need all the money on the same terms, right? Maybe you need inventory and you'll get the money back in 60 days. It might not make sense to use investment dollars for that because investors are expecting a 10X return. Maybe for that inventory, you need to just take a business loan because you're only paying maybe 15% interest and you could pay that off. 15% is way cheaper than 1000%, right? A lot of times we think that there's only one way to get capital and my advice is to aggregate capital from different sources and use the capital that makes the most sense for you.

    Nikki: Yeah. If you need even more proof that that works, I know that works for Rocket Dollar. I mean, we've done a bunch of pitch competitions I think more for marketing than fundraising, but we do end up winning money. Then with Rocket Dollar accounts themselves makes it easy for people to go to their friends and family and do a fundraising round through them so they can access their IRA, 401(k) with our self-directed accounts. You don't realize how easy getting money is if you know who to ask and how to help them get that money. I think that's really good advice. I'm just going to wrap up because I think we got everything I wanted to hear about EnrichHER. If people want to reach out to you, what's the best way for them to get in touch?

    Roshawnna: You can reach out to our website at EnrichHER.com or email our team at hello@iEnrichHER. EnrichHER has two H's, E-N-R-I-C-H-H-E-R. You could also follow us on social medial at IEnrichHER.

    Nikki: Yes. Follow them on social media and go sign up for their newsletter so you can see when their next investment is. I know I'm waiting for that. Thank you so much, Dr. Roshawnna for coming on. I really enjoyed our talk today.

    Roshawnna: Thank you so much for having me. It was so much fun speaking with you.

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    Topics: Podcast

    Published on November 27 2019