Q & A

We recently sat down with Ixchel McKinnie to find out more about her passions, her calling, and generally dive in deeper to get to know her.

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What are some of the biggest challenges you’ve faced in your work over the last few years?

Mental health and self care continues to be a struggle and challenge for black folks in the Twin Cities. That’s especially the case for those doing equity work. For our entrepreneurs, who are often sole-preneurs, it can be lonely work. So we created a position within our organization, a mindset coach, who works with those entrepreneurs. We add this to our business consulting program, so they have a more comprehensive support system. Sometimes we are delivering tough love which takes some time to digest. We want to make sure that they have someone to go to process the constant change and challenges that come with entrepreneurship.

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Developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternatives want to balance profit and purpose and put a premium on sharing power and resources.

Why is getting investments in this alternative model crucial for those who seek it?

We know Black and Brown women are starting businesses faster than any other population. We also know that they're underfunded. What we are doing in our alternative model is helping these businesses with capital and infrastructure development so that they can actually grow and thrive. Simply being able to add one employee had an impact. We don’t look at credit scores in our character-based financing. We are creating something different in our community. We are in relationship with them, checking in with them on a monthly basis and providing them with support. We know them from the beginning. We are collaborators. I don’t know any banker who does that anymore. We are also preparing them to access traditional financing capital and sources in the future.

One of our biggest challenges in getting investments in this alternative model is highlighting the importance of micro and small businesses to the community and the economy. Venture capitalism is hot right now. Everyone is looking for high returns. Even when folks talk about investing in BIPOC entrepreneurs, the focus is on VC-ready companies which can be code for tech. But while the majority of BIPOC launch a micro and small BIPOC any one of them could be the next Carol’s Daughter. So I hope we can change the mindset. Because what is really going to make a difference is growing and scaling everyday businesses because they create jobs and have the potential to create generational wealth for more people.

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How do we shift the narrative about the role of capital in BIPOC communities and reframe the perceptions of the risk involved?

The biggest segment of entrepreneurship right now is Black and Brown women, and as those businesses grow, the economic success of the community grows. Our model includes working with a business consultant and mindset coach for 6 months. During that time they work to put together all those things needed to be ready to receive capital from traditional sources in the future. Because these founders, with our support, have invested the time to fully understand the cost of goods sold, develop cash flow, and build accurate projections, it significantly derisks the investments. These companies have a solid foundation and infrastructure so they are investment ready.

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What are the top three pieces of advice you would give to BIPOC entrepreneurs, who are dedicated to both purpose and profit, as they are starting or scaling their business?

1. Hustle mode has a shelf life. When you start a business, you’re just doing this and that. You’re trying to get it off the ground. Then there comes a point where you have to build that infrastructure. You need a solid foundation so that you can grow and scale. So the faster you make the transition and get to work the sooner you will be able to grow your business.

2. You’re doing too much. While I can’t be one hundred percent sure, most entrepreneurs have a tendency to do too much, especially in the beginning. For example, don’t have 50 products, have three and do those well. Take your time to find out about your customer, the market, and opportunity before expanding your product line.

3. Be patient. What we are seeing, and I don’t think it is unique to our ecosystem, we are finding that entrepreneurs skip steps. They have an expectation that they will grow quickly. When in reality fast growth and large cash investment are the exception. Most businesses have a slow and steady growth trajectory especially in the first few years. The “valley of death” is around the three year mark. This is when many businesses fail for many reasons. But the most common are lack of capital and growing too fast. Slow, steady growth allows for learning. Skipping steps or going too fast can be really detrimental or lethal to your business. So be patient.

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What is the call to action for investors who seek to promote social justice through investment solutions?

Allocate dollars for medium and small businesses in addition to the high risk, high return VC investments. It’s the micro, small, and medium size businesses that have the potential to have the most impact on the community and economy. Also remember to fund the support work that helps to de-risk and build entrepreneurs build a company that will last.