With Black women receiving less than 0.5 percent of the total venture capital spent in the US, founders have to look for alternative startup funding. So why not give the most important people, the consumers the opportunity to build and grow with a brand? Selling equity in a startup is an effective way to raise capital, expand operations and fund the growth of the business. It can also be an effective way to attract top talent and help build a strong management team.
Abena Boamah-Acheampong, the Ghanaian-American founder and CEO of Hanahana Beauty is allowing customers to own equity in her skincare and wellness brand. She has built a multi million company with over $2 million in sales.
“My motto and Hanahana’s motto is beauty with intention. Do things with intention. Everything that you do, should move with a space of intention around it, and that means from the goal to the strategy. There should be a level of intention. You don’t want to move loosely through things. That’s why we say we like beauty with an intention for Hanahana too because there should be intentionality in everything that we do,” Boamah-Acheampong revealed the secret behind the success of her multimillion company.
A former algebra teacher, Boamah-Acheampong’s students ignited the idea for her brand. She didn’t intend to start a brand but was infinitely curious about the production of shea. In her kitchen, she began experimenting with raw materials and making products in all of her free time. Her family and friends enjoyed using the products and making them became expensive. Consequently, Boamah-Acheampong began to look for cost friendly shea butter.
Her search took her took her her to a shea-butter cooperative called Katariga in Tamale, Ghana. During the visit, Boamah-Acheampong came up with the concept of a socially responsible, sustainable, transparent company that could support the community. She launched Hanahana Beauty in 2017 to provide consumers with clean products to include in their skincare routines. Sourcing its shea butter directly from Katariga, the company ensures the cooperative has access to health care and sustainable resources through what it calls a “circle of care.”
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The brand name Hanahana, derived from Twi (a language spoken in Ghana) meaning “something smooth and malleable” was suggested to her Boamah-Acheampong by her father. Her mission statement to “increase accessibility, transparency, and sustainability” has triggered people’s interest in the brand and its products. Hanahana Beauty has been backed by prominent public figures such as Beyonce and is available in over 450 Ulta Beauty stores.
When it came to raising funds, Boamah-Acheampong initially pursued venture capital (VC) and angel investing as she was not aware of any other alternatives. Hanahana Beauty experienced a pivotal shift in its trajectory when the company received its first check in 2022 from a Black woman investor. The company eventually raised more than $400,000 in funding through VC and angel investors. Boamah-Acheampong however discovered a new path to building wealth and decided to follow it.
Tapping into the power of community, she was inspired to create a communal fundraiser through the crowdfunding company Wefunder. Boamah-Acheampong wanted to give her customers the opportunity to grow with the brand by allowing them to have equity in it. Hanahana Beauty has raised over $80,000 of its fundraising goal of $200,000. Per the campaign page, customers’ investments will help advance the company’s goal of “redefining the shea butter and body care industry.”
Boamah-Acheampong is showing others that brands have more options to succeed and should not be held back by the limitations of VC funding.
“We pivoted. We were like, ‘You know what, I’m giving all of these angel investors the opportunity to build and grow with us. Why don’t I give my customers the opportunity to also have equity in the brand. I really just wanted to look at our strengths, and our strength is our community, and they want to put their dollars in it. They want to be a part. To become an accredited investor, you have to have a certain amount of money, and not all of our customers [have] that,” Boamah-Acheampong explained why she decided to allow customers to own equity in her company.