{"id":9504,"date":"2023-10-03T20:16:13","date_gmt":"2023-10-03T20:16:13","guid":{"rendered":"https:\/\/imsfund.com\/?p=9504"},"modified":"2023-10-03T20:16:13","modified_gmt":"2023-10-03T20:16:13","slug":"how-the-godfather-of-black-entrepreneurs-is-closing-the-racial-wealth-gap-one-billion-dollar-exit-at-a-time","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/10\/03\/how-the-godfather-of-black-entrepreneurs-is-closing-the-racial-wealth-gap-one-billion-dollar-exit-at-a-time\/","title":{"rendered":"How The \u201cGodfather Of Black Entrepreneurs\u201d Is Closing The Racial Wealth Gap \u2014 One Billion-Dollar Exit At A Time"},"content":{"rendered":"
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Sundial founder Richelieu Dennis talks the racial wealth gap, getting turned away from a party at Essence Fest (despite owning the brand), and what he learned from his second near-death experience.<\/em><\/p>\n
Richelieu Dennis sold Sundial Brands to Unilever in 2017 for $1.6 billion dollars. It was a stunning story and not just because of the price tag; Dennis escaped war-torn Liberia in 1987 and started selling shea butter out of his dorm room at Babson College. He\u2019s now one of the wealthiest Black entrepreneurs in the country. And he\u2019s sending the elevator back down for the next generation. As part of the sale to Unilever (the makers of Dove soap and Ben & Jerry\u2019s), Dennis insisted the conglomerate invest $50 million in a fund to empower Black female business owners.<\/p>\n
Dennis, 54, has since backed Slutty Vegan and invested in Monique Rodriguez\u2019s Mielle Organics which sold to P&G in early 2023. He also bought Essence Magazine in 2018, vowing to \u201cto serve and empower women of color.\u201d But apparently owning the brand doesn\u2019t guarantee admission to the best parties at Essence Festival, he admits here in a new interview series called \u201cCereal Entrepreneur,\u201d hosted by Method co-founder Eric Ryan and journalist Mickey Rapkin. Over a bowl of cereal, Dennis talks big exits, bigger conglomerates, and that rumor that he\u2019s buying BET.<\/p>\n
MICKEY RAPKIN:<\/strong> Rich, you brought Frosted Flakes today. Why that one?<\/p>\n
RICHELIEU DENNIS:<\/strong> First of all, it\u2019s the cereal I like eating. I\u2019ve always loved the commercials. And I like to fashion myself tiger-ish.<\/p>\n
<\/p>\n
RAPKIN:<\/strong> (laughs) In the early 90s, you were selling SheaMoisture on a card table on 125th<\/sup> Street in Harlem. What got you out of bed back then?<\/p>\n<\/p>\n
Richelieu Dennis, CEO and Executive Chairman of Sundial Brands<\/p>\n
<\/fbs-accordion>Courtesy of Essence Ventures<\/small><\/figcaption><\/figure>\n
DENNIS:<\/strong> It was hunger. But that\u2019s every entrepreneur. Rent\u2019s due, you\u2019ve got health insurance you gotta pay\u2014if you could even afford it. But for me there was this overwhelming sense of responsibility: there were no real products or brands tied to [our] ancestral culture. These ingredients existed.<\/em> You\u2019d have people show up and say, \u201cMy mother made so-and-so when we were in South Carolina. And she got it from my grandmother who got it from her mother.\u201d But because Black culture had been interrupted with slavery, that never got translated into actual products and goods and services.<\/p>\n
ERIC RYAN:<\/strong> That\u2019s really powerful. I\u2019ve never heard you say that\u2014about how slavery basically severed these traditions.<\/p>\n
DENNIS:<\/strong> You start to think about all of these young people who have no idea what it is to actually have a product that works for your skin type or for your hair type.<\/p>\n
Disrupting The Beauty Aisle<\/h2>\n
RAPKIN:<\/strong> You once said, \u201cThe only place in America where segregation is legal is the beauty aisle.\u201d You sold Sundial to Unilever. But weren\u2019t they the people responsible for that segregation? Did that come up in the negotiation?<\/p>\n
DENNIS:<\/strong> You bet it did.<\/p>\n
RYAN:<\/strong> (laughs) There\u2019s Tony the Tiger coming out.<\/p>\n
DENNIS:<\/strong> If you\u2019re going to transform a market\u2014if you\u2019re going to transform a way of doing things that is wrong\u2014sometimes you need the people that have perpetrated it to recognize that and then correct it. Unilever, to their credit, recognized that they weren\u2019t serving a vast group of people that had the spending power and the willingness.<\/p>\n
Repeat Offender<\/h2>\n
RYAN:<\/strong> One of the challenges of being a serial entrepreneur\u2014one of the reasons we wanted to do this column\u2014is replicating that first success. After selling Method, I had this real fear: Did I get lucky or was I good? Rich, was that your experience?<\/p>\n
DENNIS:<\/strong> There was never a feeling of I\u2019ve-gotta-do-this-again. That\u2019s not in my nature. I\u2019m competitive around mission as opposed to accomplishment. For me, there\u2019s so much work to be done in bringing fairness to the marketplace. (pause) It is hard being an entrepreneur. Period. But when Black entrepreneurs have been systemically blocked out of opportunities and access it becomes even harder. There was no infrastructure, there was no ecosystem, there was no path that Black entrepreneurs had to rely on or follow.<\/p>\n
RAPKIN:<\/strong> You\u2019ve been called \u201cthe godfather of budding Black entrepreneurs\u201d\u2014<\/p>\n
DENNIS:<\/strong> I\u2019m old enough now that I can be the godfather.<\/p>\n
RAPKIN:<\/strong> The grey in your beard looks good. But let\u2019s talk Mielle Organics. You\u2019re an investor. They sold to Proctor & Gamble earlier this year. But then comes this online backlash from customers saying: They’re gonna change the formulas, they\u2019re gonna cater to white women. <\/em>Was that frustrating to see?<\/p>\n
DENNIS:<\/strong> I think if you\u2019re Black, you understand it. If you\u2019re white, you marvel at how one could feel that way. White kids grow up in this country navigating abundance. And Black kids grow up navigating scarcity.<\/em> That leads to different mindsets. When you\u2019ve been marginalized and left out and in a lot of cases abused, when wonderful things happen\u2014thing that would be celebrated in a white community\u2014they get scrutinized differently in a Black community.<\/p>\n
RYAN:<\/strong> Say more about that please.<\/p>\n<\/p>\n
NEW ORLEANS, LOUISIANA – JUNE 29: Richelieu Dennis, CEO and Executive Chairman of Sundial Brands, … [+]<\/span> speaks during the Global Black Economic Forum’s Access & Economic Opportunity Summit at the 2023 ESSENCE Festival Of Culture\u2122 on June 29, 2023 in New Orleans, Louisiana. (Photo by Paras Griffin\/Getty Images for ESSENCE )<\/span><\/p>\n
<\/fbs-accordion>Getty Images for ESSENCE<\/small><\/figcaption><\/figure>\n
DENNIS:<\/strong> What has historically happened in this country\u2014when we\u2019ve seen success in our communities, that gets destroyed. You can go back to Tulsa. Black community builds up economic footing, gets completely wiped out.<\/em> We come out of slavery and there\u2019s the promise of 40 acres and a mule. Then, no. You\u2019re doing experiments at Tuskegee on people\u2014 That leads to major trust issues. Black companies building scale and exiting them is new. We have to normalize business development over time in the Black community so people embrace what it is to actually build these businesses, take that capital out, and reinvest it back into our community. I\u2019ve had the good fortune of building Shea, which became the largest in the category, and then had the good fortune right after that to partner with Melvin and Monique in Mielle and build the second largest. For me, that\u2019s joy.<\/p>\n
Welcome to Essence Fest<\/h2>\n
RAPKIN:<\/strong> Let\u2019s talk about joy. You likened Essence Fest in New Orleans \u201cto the real-life Wakanda.\u201d Give us a great late-night story from this year\u2019s festival.<\/p>\n<\/p>\n
NEW ORLEANS, LOUISIANA – JUNE 29: (L-R) Richelieu Dennis, CEO and Executive Chairman of Sundial … [+]<\/span> Brands, Doug E. Fresh, and D-Nice speak during the Global Black Economic Forum’s Access & Economic Opportunity summit at the 2023 ESSENCE Festival Of Culture\u2122 on June 29, 2023 in New Orleans, Louisiana. (Photo by Paras Griffin\/Getty Images for ESSENCE )<\/span><\/p>\n
<\/fbs-accordion>Getty Images for ESSENCE<\/small><\/figcaption><\/figure>\n
DENNIS:<\/strong> OK. I come in at two o\u2019clock in the morning, maybe three o\u2019clock in the morning. In the lobby is T.I., Lil Jon, the folks from Target, the folks from Disney, Taraji P. Henson and Jill Scott\u2014all these people just hanging out in the lobby loving on each other.<\/p>\n
RYAN:<\/strong> Only you could have made that happen\u2014bringing those individuals to one place, to an environment where everyone is loving on each other.<\/p>\n
DENNIS<\/strong>: (laughs) I think they were there for the wine.<\/p>\n
RAPKIN: <\/strong>Give us one more story.<\/p>\n
DENNIS:<\/strong> D-Nice does his Club Quarantine. It got a lot us through Covid. He brought it to Essence Festival. And so here I am\u2014another two o\u2019clock in the morning deal\u2014coming from the convention center. And I couldn\u2019t get into Club Quarantine.<\/p>\n
RYAN:<\/strong> They turned you away at the door?<\/p>\n
DENNIS:<\/strong> Imagine that. I\u2019m texting D-Nice, but he\u2019s actually D.J.ing, he\u2019s doing his thing, he\u2019s not looking at his phone. I\u2019m standing outside. I couldn\u2019t get in.<\/p>\n
RAPKIN:<\/strong> While we\u2019re talking media, there were reports earlier this year that you tried to buy Vice. Now there\u2019s talk you\u2019re buying BET.<\/p>\n
DENNIS:<\/strong> [pause] We are at a stage in the development of Black business in America where there are quite a number of Black people that can be in that conversation. For me, that\u2019s the big win. There are multiple people who have the access, the resources, and the skillsets to pull something like that off.<\/p>\n
RAPKIN:<\/strong> OK. But are you buying BET?<\/p>\n
DENNIS:<\/strong> We’ve been very focused and bullish on media. We continue to look at whatever there is that\u2019s out there that we think can really benefit from our expertise and drive the culture forward. That\u2019s all I\u2019ll say on that. But I\u2019m extremely motivated by the fact that there\u2019s multiples of people that can have a real serious conversation about this and that can actually pull it off.<\/p>\n
[Editor\u2019s note: After this interview was conducted, the <\/em>Wall Street Journal reported Paramount Global had informed potential bidders\u2014which included Tyler Perry, Sean \u201cDiddy\u201d Combs and Byron Allen\u2014that it would not be selling its majority stake in BET Media Group.]<\/em><\/p>\n
Getting Schooled<\/h2>\n
RAPKIN:<\/strong> We often talk about successes. But entrepreneus can learn more from our mistakes. Tell us about a mistake you made with SheaMoisture and what lesson you took away.<\/p>\n
DENNIS:<\/strong> We were selling our products the street. We were having real success and we got an opportunity to go into Macy\u2019s. I took great pride in the fact that I was selling a product on the sidewalk\u2014on a table outside of Macy\u2019s\u2014and I was also selling that same product inside<\/em> Macy\u2019s. And that nearly put us out of business.<\/p>\n
RAPKIN:<\/strong> How?<\/p>\n
DENNIS:<\/strong> I didn\u2019t understand the pricing models, I didn\u2019t do the work to understand them, I didn\u2019t know that I\u2019d have to pay chargebacks. I didn\u2019t understand that I was responsible for labor. I didn\u2019t understand that I couldn\u2019t schedule that labor and tell it when to be and where to be. I didn\u2019t understand all of those other costs that went into being in a department store.<\/p>\n
RYAN:<\/strong> After we had our first big Method launch at a grocery chain\u2014it was our biggest order ever\u2014we got a check for a few dollars. (laughs) We went and looked at all the deductions they took. My partner and I were just like, \u201cWhat the f\u2014?\u201d<\/p>\n
DENNIS:<\/strong> We grew like a weed<\/em> in Macy\u2019s. But the more we sold, the more we lost. That nearly bankrupted us.<\/p>\n
RYAN:<\/strong> Switching gears in a big way: You\u2019ve had two near death experiences in your life. How did that affect your outlook on business? Or your motivation?<\/p>\n
DENNIS:<\/strong> The most recent one, the most recent near-death experience was Covid.<\/p>\n
RYAN:<\/strong> I love that you said \u201cthe most recent one.\u201d<\/p>\n
DENNIS:<\/strong> I think that\u2019s God’s way of constantly reminding me that I\u2019m here for a reason. And I can\u2019t forget it. But I got Covid very early on\u2014in February of 2020. It was before the medical establishment really understood what they were dealing with much less how<\/em> to deal with it. It was a horrific experience. I\u2019m lying in the hospital, I\u2019m in the ICU, and every day they\u2019re wheeling people by me\u2014people that didn\u2019t make it.<\/p>\n
RAPKIN:<\/strong> That was a scary time.<\/p>\n
DENNIS:<\/strong> One day an overwhelming calm came over me. I had spent that entire day thinking of my children. And I was like, \u201cYou know what? They\u2019re going to be all right.\u201d Literally that got me through it. Once I realized I had done what I needed to do as a parent, I became very calm. I think that enabled me to focus on fighting as opposed to worrying. That empowered me [then] and that empowers me today.<\/p>\n
RAPKIN:<\/strong> Last question. This column is called \u201cCereal Entrepreneur.\u201d We\u2019re talking over cereal. What were you eating for breakfast when you were selling SheaMoisture on that card table on 125th Street?<\/p>\n
DENNIS:<\/strong> I wasn\u2019t eating breakfast. Those were one-meal-a-day days, my friend. I ate from a lot of food trucks. (laughing) Food trucks are sexy now. There may even be a few Michelin-starred ones out there. But back then, that\u2019s not what they were.<\/p>\n
The conversation has been edited and condensed for clarity.<\/em><\/p>\n<\/p>\n
Cereal Entrepreneur, a new interviews series from Forbes conducted by Method co-founder Eric Ryan … [+]<\/span> and journalist Mickey Rapkin<\/span><\/p>\n
<\/fbs-accordion>Courtesy of Eric Ryan<\/small><\/figcaption><\/figure>\n
The conversation has been edited and condensed for clarity.<\/em><\/p>\n<\/div>\n