After a rough several months, the owners of the Oakland spiritual and wellness store Queen Hippie Gypsy are finally getting some relief.
First the shutdown slashed revenue to basically zero and then rioters during the Black Lives Matter protests smashed two of the storefront’s windows.
“Like most businesses in these times, we have experienced quite a bit of setbacks,” said Kyrah Ayers, who quit his steady job in the federal government in January to focus full-time on running Queen Hippie Gypsy with his wife, Lilliannia.
Struggling to make ends meet as rent, utilities and taxes piled up, the couple was connected to the Oakland Black Business Fund, an investment platform started in June to support Black-led businesses. The fund provides access to much-needed capital to Black-owned business and technical assistance via partnerships that include the Alliance for Community Development, The Clorox Co. and Okta.
Through the fund, Ayers was granted $15,000 in capital to fix his broken windows and pay backed-up bills and in technical assistance, including a professional photoshoot for their business, an upgrade to their e-commerce platform and help negotiating the lease with the landlord.
“The assistance we have received has been very helpful,” Ayers said.
The OBBF was created by Elisse Douglass and Trevor Parham, who are experienced investors, entrepreneurs and real estate developers. The original aim of the fund was to support Black-owned businesses in Oakland that were vandalized during the protests. But after raising $150,000 the duo saw that the potential of their efforts could be much greater. The OBBF now plans to raise $10 million in relief grants to help local Blacked-owned businesses and then launch a series of investment funds totaling $1 billion over the years that will be accessible through an a investment platform, similar to an early growth venture fund.
Black business owners often get shafted when it comes to accessing capital, both historically and in recent times. According to the Brooking Institution, large banks approve just 29% of Black business owners’ loans, compared with 60% of loans sought by white business owners. Even worse, Black founders receive less than 1% of venture capital.
On top of that, Parham said that Black-owned businesses are twice as likely to fail during the pandemic. Parham calls the historic lack of access to capital combined with the recent challenges of Covid a “double threat.”
“These businesses have a structural institutional double threat that they’re faced with,” said Parham.
The $10 million relief fund will target 500 businesses with the average grant being $20,000. Parham said he aims to raise all of the money over the next year or so through a mix of individual, public and private foundations and government donors. To date, they have raised $150,000, have received 50 applications and dispersed grants to 20 businesses.
Parham said that they are close to closing funding deals from Bay Area tech titans, like Facebook, Lyft and Square.
While the relief fund will be under a nonprofit structure, the $1 billion investment fund will be a for-profit enterprise, with the capital being raised from limited partners like it is in venture capital.
The venture fund for Black founders will evolve over time with a series of different types of funds becoming available as capital is raised. But in general the $1 billion fund will fall into two buckets: a $500 million venture fund for Black founders and a $500 million real estate fund.
Queen Hippie Gypsy is located in downtown Oakland and sells a mix of items and trinkets linked to improved spiritual wellness, like crystals, bath salts and candles, and in pre-Covid times hosted community events upstairs.
Ayers said they are offering curbside service and sell products on their website. As of late, the store is generating 60% to 70% of revenue before the shutdown, which is pretty good, considering.
“We are blessed,” Ayers said. “We definitely took a hit but others had it much worse.”