While she was getting her MBA at Harvard, poor customer experience and value drove Britney Winters, founder and CEO of Upgrade Boutique, to develop a business plan for selling wigs and extensions.
“I always thought the process was too time-consuming, inefficient, and expensive,” she emphasized. “I never felt like the amount of money and time that I was spending was commensurate with the level of service that I received.”
Upgrade Boutique provides customized hair and beauty solutions and flexible work options for stylists. Its online platform allows women to skip the salon while accessing top stylists. For stylists, it enhances their efficiency and expands their clientele.
However, it wasn’t until two years after graduation, after complaining to a schoolmate about how unfulfilling her job was, that a friend paved the way for Winters to start Upgrade. Kate Lazaroff Puck asked Winters what was holding her back. “Money,” she replied. Lazaroff Puck invested $50,000 in Upgrade so Winters could test consumer demand.
“A lot of Black women don’t get that first injection of capital to prove out that there is demand for their business,” sighed Winters. “I was very fortunate.” Black women face a 90% wealth gap, a large and widening earnings gap, and an access-to-capital gap, according to Black Womenomics: Investing in the Underinvested by Goldman Sachs.
Winters did some popup shops to test demand. It was there!
“I tried to raise more capital and got a lot of nos,” said Winters. Venture capitalists—primarily white men—didn’t understand the market’s pain point. Blacks drive the ethnic hair and beauty market, representing 86% of all expenditure according to Black Impact: Consumer Categories Where African American Move Markets by Nielsen.
“I got another blessing from God in the form of another Harvard schoolmate,” said Winters. Anya Hayden, an investor in Founders Fund, facilitated an introduction to the partners of the fund.
Raising pre-seed was easier than raising seed funding. It wasn’t just that investors pulled back from early-stage investing due to Covid-19. There was an educational hurdle in pitching white men on products used primarily by women of color. Black female founders have received just 0.6% of all VC investment since 2009, according to ProjectDiane 2020. Even though this was very discouraging, Winters persevered.
Again, Winters’ Harvard network provided access to capital. Winters and her mother attended a Harvard networking event to honor Emily Keeton. During the Q&A session, Winters asked a question. Keeton interrupted Winters’ introduction of herself and asked her to give her elevator pitch. After the event, Keeton reached out and asked for Winters’ pitch deck. Keeton then offered to help with the raise.
Well BOOM! Then it happened
Having a champion opening the door to venture capitalists made all the difference. In just a couple of months, Winters had commitments from three VCs to whom Keeton had introduced her. Mercury Fund and The Artemis Fund co-led the $1.7 million seed round, with additional investments from Next Coast Ventures. The seed investors join existing investor Stray Dog, a Founders Fund investment vehicle led by Anya Hayden. Since its founding in 2019, Upgrade Boutique has raised nearly $2 million in venture capital funding.
“I think of all the people with great ideas who don’t have access to networks [like Harvard’s alumni],” said Winters. “I feel immense pressure to do well and succeed so that I can open the door for the next Black female founder.”
The death of George Floyd was more than just a moment that focused the world on social and economic injustice. It focused some investors on investing in Black founders. Winters was raised in government housing in the Third Ward, just like Floyd. “I had a personal connection to someone who changed the world,” she said. “This was quite powerful to me. I hope the family knows that this tragic death was not in vain.”
While some investors embraced the PR aspects of investing in Black founders, others genuinely seek to make a difference. “I want to create more opportunities for people who look like me,” said Winters. Women are over-mentored and underfunded. The growth in the number of women angel investors is a step in the right direction. Since 2004—the first year the Center for Venture Research at the University of New Hampshire started tracking angel numbers by gender—the number of female investors has increased nearly eightfold, from over 11,000 to almost 94,000 in 2019. On the other hand, venture funding hit a record in 2020. For women founders, it dried, wrote Rebecca Szkutak in Forbes about research All Raise did.
Covid-19 not only played a role in focusing people on the disparities in health, economics, and social justice. It also leveraged technology to deliver products and services. Winters’s original business plan had a much bigger emphasis on brick-and-mortar stores. “Our salon space [in Houston] temporarily closed.” Upgrade Boutique had already developed an online platform but pivoted to focus on it. Future flagship locations are planned in Los Angeles, Miami, New York City, Washington DC, and Memphis that will provide an in-person experience for customers and workspaces for stylists.