Creativity — It is your super power. Take creative dates.
As a part of our series about “Why We Need More Women Founders”, I had the pleasure of interviewing Jessica Norwood.
Jessica Norwood is the Founder of RUNWAY, a financial innovation firm that uses entrepreneurship as a strategy to close the wealth gap in African American communities by providing pre-seed, friends and family capital, or what Jessica calls “Believe in You Money “ to fund people of color led companies. Jessica is a financial activist and social entrepreneur who was awarded the Nathan Cummings Foundation Fellowship for Economic Disruption. An immediate past fellow of RSF Social Finance Integrated Capital, Jessica speaks worldwide on the intersection of culture and investing, emerging leadership, community investing and African American wealth creation.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I am the daughter of a civil rights leaders turned politician from Alabama and an entrepreneur from Chicago who understood that the next step in the justice movement was about economics. In fact, this is what Dr. King was advocating for, economic inclusion, when he was assassinated in Memphis. As a Black woman in business, I faced barriers to getting the capital I needed for my business due to the legacy of racism inside of the banking and investment field –something in my field that we call the racial wealth gap. This “gap” meant that great ideas from Black founders did not get the financial support they need to get off the runway and take off. I started RUNWAY because Black founders need capital with terms that take into consideration the impact of the wealth gap. We believe that when Black companies get the reparative capital they need they can create jobs and restore communities.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
The funniest story has to do with our company name — RUNWAY. When we launched, it was called the Runway Project. The name came from a phone call I had with my early investors. I was explaining that Black companies were not the source of the problem with getting capital. “You don’t have a pilot problem. There is nothing wrong with the founders. You don’t have an airplane problem, because there is nothing wrong with Black companies. You have a runway problem; the infrastructure the need to take off is missing.” The name Runway Project stuck after that. However, we didn’t think about the TV show, Project Runway, and the power of the brands name association. As you can imagine, people began my confusing my companies founding with the TV show. I just started to laugh when people thought I was a model from the show who used her winnings (I did win a national award for economic disruption which I used to start the company) launch a company that helped Black founders get reparative business capital.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Unknowingly, my first investor was my mom– she was my friends and family investor. I was eight and had an idea (cue light bulb). Uh-oh. It was the 80s and press on nails were so cool and all the girls in my grade wanted them. But our fingers were tiny and our parents thought it was too grown up — but I knew could make them and there was a huge demand.
Mom had this cherry wood dining table in the room we almost never used and I set up my Operations. I would dollop Elmer’s glue on the table with a piece of plastic and let it harden. My butter knife would scrape the glue and the table up and with my school scissors, I’d cut the glue into oval shapes. The idea was to moisten (read: lick) the backs of the glue nails and it would naturally stick, no tape needed. I packed them into tiny paper packets and off to school I went — they sold out! I’m grateful to my mom for investing in me in all the ways she could. She nurtured my creativity and my passion for business.
According to this EY report, only about 20 percent of funded companies have women founders. This reflects great historical progress, but it also shows that more work still has to be done to empower women to create companies. In your opinion and experience what is currently holding back women from founding companies?
Women founders are critical to our society’s success, but they face barriers to bringing their vision to life such as pay inequality, accessing debt capital and the ongoing impact of their unpaid labor. While Black women founders make up 45% of all new women-owned companies, they face the double impacts of gender and race discrimination which means by year 5 — most of those companies have closed. COVID has changed this even more with record high closures making our challenge not only to encourage more women business owners but to sustain them too. Right now, Black business owners who apply for funding have a rejection rate three times higher than that of their white counterparts. When we overlay this with what we know about pay inequality and the unpaid labor of women’s work at home and in the community, we can see that the size and amount of personal capital investments that a woman can bring to the table is lowered from the start. And if she is a Black woman, she cannot rely on banks or private investors either which means that great companies are being perpetually held back.
Can you help articulate a few things that can be done as individuals, as a society, or by the government, to help overcome those obstacles?
As a society, it is time to make space for women’s work, influence and power. One of the most important things we can do is to recognize the staggering impact on wealth accumulation for women. Prior to the Equal Credit Opportunity Act of 1974, a bank could refuse to open an account or issue a credit card to an unmarried woman, and if a woman was married, her husband was required to cosign. Not having access to money can not only cause a women’s dreams to be denied, but it can also mean staying in unsafe environments and maintaining co-dependent relationships. If we are wanting to support women founders, we have to invest using a strategy of repair. That means that our government, banks, VC firms, and Angels need to be using reparative terms like the ones RUNWAY uses. Reparative investing utilizes traditional ideas like friends and family character-based lending, generous timelines to repay, quick access to the funds, trusted guidance from mentors in order to repair the inequity faced by women founders.
This might be intuitive to you as a woman founder but I think it will be helpful to spell this out. Can you share a few reasons why more women should become founders?
When I meet Black Women founders, they often tell me that one of the main reasons they decided to pursue entrepreneurship was because they wanted their hard work to be appreciated. Women often talk about the way the workplace under values their contribution from the wage gap to being talked over in meetings, women want to feel valuable. And they are right! If you’re spending the majority of your waking hours doing work that is underappreciated gets old really quickly. They also care deeply about having a flexible work schedule and more control over their financial future.
Is everyone cut out to be a founder? In your opinion, which specific traits increase the likelihood that a person will be a successful founder and what type of person should perhaps seek a “regular job” as an employee? Can you explain what you mean?
The reality is that no matter what happens or who is involved, the final responsibility for the company’s success rests on the founder. That’s a lot of pressure. If a person is comfortable under pressure, they certainly should try being a founder of a company. Additionally, I find that people who love building teams and enjoy collaboration do really well too. That’s because the real power of any leader is the people who work alongside of them.
Based on your opinion and experience, what are the “Five Things You Need To Thrive and Succeed as a Woman Founder?” (Please share a story or example for each.)
Collaborate — If you want to go fast, go alone. If you want to / Build Good Teams — You want this to be the
Creativity — It is your super power. Take creative dates and
Responsibility to Serve — Baba said tested in battle
Negotiate — You can always negotiate. Modeling good communication and building right relationships > where you both understand your value and interdependence.
Teachers — you will need someone to help you as a thought partners and friend.
We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
I love me some Dolly Parton! She embodies the type of power and impact that I want to have as a woman in business. Dolly has always used her company to build wealth for Tennessee families. The University of Tennessee found the annual economic impact of Dollywood was more than 1.8 billion dollars creating more than 23,000 jobs for the region. From increasing the reading levels of children and supporting public libraries through her Imagination Program to the famous Dollywood, Dolly has been a positive influence on the lives of the people around her. But more than that, I just love Dolly’s spirit. She is kind, beautiful and always true to herself — with big heels, big nails, big boobs, big hair, big talent and an even bigger heart– what’s not to love!
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.