Courtesy of The Uncaged Chefs
DCFEED
Chef Damian Brown’s “no rules” brunch pop-up is expanding to Camp Springs on Aug. 18. Try everything from jerked shrimp and grits to snicker doodle banana pudding from 11 a.m. to 7 p.m. inside Fast Eddie’s.
Lend Her Capital
Do female food entrepreneurs in D.C. face more challenges when it comes to generating initial funding for their businesses?
Darrow Montgomery
Sunyatta Amen, Calabash Tea
By Laura Hayes When Maya LoveLace was preparing to open two restaurants in Portland, Oregon, she launched a crowdfunding campaign on Kickstarter to cross the fundraising finish line. She subsequently received a text message from a male restaurateur: “Running a Kickstarter is for kids with cancer—chefs should be able to succeed and get funding based on their skills alone.” Lovelace ended up raising $85,778 on Kickstarter, surpassing her goal of $75,000. “Women are often expected to be gracious and giving in this industry, so when they turn around and ask for something, it’s hard or confusing, especially to men,” Lovelace told the audience at Eater’s Young Guns Summit on July 27. The conference focused on how the
next generation of chefs and operators can improve restaurant culture. Lovelace’s panel on fundraising got City Paper thinking: What challenges do female entrepreneurs in D.C. face when they start a food or drink business and begin raising capital? Everyone from a soup maker and a bakery owner to fast-casual empire builders explained how they turned their ideas into fully operational businesses and whether their gender played a role in their successes or setbacks. Knowing your numbers will make it much harder for investors and banks to say no. “Access to capital is the number one issue women business owners have,” says Emi-
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ly Bruno, who opened the first Denizens Brewing Co. in Silver Spring in 2014 with her wife, Julie Verratti, and head brewer, Jeff Ramirez. Bruno was previously the research and policy director at the National Women’s Business Council. In the early or “seed” stages, most aspiring business owners turn to friends and family as potential investors. “Think of it as friends of friends of friends who want to buy a piece of the company for a smaller amount than a professional investor,” Bruno says. Money from venture capital firms or strategic investors typically comes later, when a business looks to multiply. “Working with friends and family is the lowest barrier to entry,” Bruno says. “We were working with people who knew us and our work ethic. We didn’t have to build credibility.”
Debt financing is another option. Using this strategy, entrepreneurs borrow money from investors or banks, which often require assets to be posted as collateral for the loan. This method is generally cheaper in the long run and allows entrepreneurs to retain more equity, according to Bruno. “You have to be willing to put up something if you’re trying to do debt financing,” she explains. “Our house is up as collateral. If our business fails, we lose our home. As two 40-year-olds, that’s all the net worth we have.” Bruno and her partners fought the most friction when they sought loans from banks and the U.S. Small Business Administration, especially as they expanded from one brewery to two this spring. “You don’t really know if it has to do with your gender or race, but you feel like it has to to a point,” Bruno says. They met resistance from banks they approached for loans despite what Bruno describes as 30 years of combined relevant experience. “If we’re not good candidates then who is? Are we getting more scrutiny as two women and a guy with the last name of Ramirez? Is there more insecurity on the bank’s part because we don’t fit the stereotype of who a business owner is?” They eventually obtained two loans: a statebacked commercial loan for their Silver Spring location and a multi-million dollar SBA loan for Riverdale Park. SBA loans are more expensive because they have higher interest rates and higher fees up front “even though they’re supposed to be for people with less access to capital,” according to Bruno. Bruno was most frustrated when her team sought a loan for the new brewpub in Riverdale Park. “We had to switch our bank because our existing bank wouldn’t give us the loan,” she explains, adding that they had a thorough plan and budget and had been responsible borrowers. “They didn’t trust us to succeed. Would two white guys have had that experience? I don’t know. If it doesn’t have anything to do with gender, it means it’s way too hard for successful small businesses to get financing in this area.” To prepare for showdowns at the bank, Bruno advises women to know their numbers and be on top of their business plans so they can respond when underwriters dig to determine if a business can turn a profit. “If you have a case based on numbers, it clears the path no matter what situation you’re dealing with,” Bruno says. “Even if you don’t have credibility because you don’t look like everyone else, you at least have credibility because you know your numbers better than anyone else.” HipCityVeg founder Nicole Marquis similarly attributes some of her success to writing a meticulous business plan. “I knew down