The INSANE Reality of Being the Poster Child for Funding You Can't Get

0:00This is an iHeart Podcast. Guaranteed Human.

0:31members of the Board of Trustees, including Martin Luther King Sr. It's the true story of protest and rebellion in Black American history that you'll never forget. I'm Hans Charles. I'm Menelik Lumumba. Listen to The A Building on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Over the last couple years, didn't we learn that the folding chair was invented by Black people because of what happened in Alabama? This Black History Month, the podcast Selective Ignorance with Mandy B unpacks Black history and culture with comedy, clarity, and conversations that shake the status quo.

1:06The Crown Act in New York was signed in July of 2019, and that is a bill that was passed to prohibit discrimination based on hairstyles associated with race. To hear this and more, listen to Selective Ignorance with Mandy B from the Black Effect Podcast Network on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Bowen Yang. And I'm Matt Rogers. During this season of the Two Guys, Five Rings podcast In the lead up to the Milan Cortina 2026 Winter Olympic Games, we've been joined by some of our friends. Hi, Bowen. Hi, Matt. Hey, Elmo. Hey, Matt. Hey, Bowen. Hi, Cookie.

1:40Hi. Now, the Winter Olympic Games are underway. We are in Italy to give you experiences from our hearts to your ears. Listen to Two Guys, Five Rings on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. How are you doing? There we go. I'm good. I'm good. How are you doing? Good. Thank you for being here. Well, thank you for having me. I really appreciate it. Jessica Spaulding. This is an interesting and it's an important story to tell. So shout out to Adrian Walton, our mutual friend, A. Butter. Legend. Put us together last year and then, you know, had to reintroduce the situation recently.

2:25But long story short, Jessica is an entrepreneur who owns the Harlem Chocolate Factory, staple in Harlem, and have come across some unfortunate situations. But I'm going to let you tell the story because you could tell it obviously better than I can. But it's an important conversation that I think we need to have as far as entrepreneurship, small businesses in our community, access to capital, brick and mortar, different things of that nature. So can you tell a story to kind of open it up? Yeah. I mean, the quick overview is we started the business in 2015 after I joined a business plan competition.

3:07And I was unemployed and I found out about the competition while I was at the library with my kids. And I wound up winning the competition to start my business for$15 ,000. But I started to learn right after that how media coverage can also tank you. because immediately that winter, we went into 250 media kits given out by Sam Adams, and we were flooded with orders. And I was working out of a little six-foot table in a commercial kitchen, and so it was just like a really rapid growth. We went from a two-foot table in the back of a brownstone selling our products to now being in like major tourist attractions and selling out every week.

4:09And then from there, we went to the fancy food show and got selected as like the best bites at the show. And so I'm like, okay, we need to find a larger production space. At the time, Amazon reached out and wanted this huge six-figure order. And so I'm like, let me find a production space. Let me find a production space. And I couldn't find one. And I couldn't find the capital to find a space that was big enough for us to really produce in. So we found the store. And the thing that I didn't realize I was doing was I was changing my business model. I had been doing wholesale and doing corporate gifting.

4:48And that's manageable, you know, with a small team. The introduction of retail and brick and mortar completely shifted the model. and it feels like, okay, I'm making so much more money or the sales are different because they're in the face. But now I have this very, very important part, especially for a Black-owned business, which is customer service. I'm spending 45 minutes explaining to people why my chocolate costs more than what's at the corner store and customer education and customer acquisition and then distribution for each and every individual order. Where before, I'm boxing 100 bars at a time and shipping it out in one box.

5:34Now, Tamika want six chocolates and I got to spend a half an hour making sure every six chocolate is correct and goes to her office. And it really, really, really became a struggle to manage in such a small space. Our kitchen is 200 square feet, and we were pumping out thousands of bars. And we've sustained and carried on this time, but at my sacrifice. And so people are like, okay, well, let me get you more orders. Let me get you more orders. And I'm like, you're actually low-key drowning me. You're crippling you. Yeah. You actually... And trying to explain the economics of why more ordering actually has put us in a worse financial position has been really, really difficult to communicate to people who are like, we support you, we love you.

6:37And people mad at us because you're not open. And I'm like, I have to be closed because I have to satisfy contracts that actually make us money. Because I'm basically breaking even in this retail space. So it's just, it's led us to really, really, really pay attention to how we need to shift the model and do the thing that I was afraid to do in the first place, which is go after what we truly needed, which was a larger production space and satisfying larger clients and larger contracts. When you say larger clients, larger contracts, that's inside of the new model, I'm assuming. What else is entailing inside the new model?

7:23Because this is interesting, right? People would think if I bring in more revenue, that would help the business. But I'm like, you're saying like, hold on, we have to catch up to our obligations to actually make sure this makes sense. So what have you done internally to design the new model? So what we did is we identified key partnerships that would allow us to scale out. So we have to reach a specific price point in a specific volume to have the profitability to grow the rest of the business. Right. Like it's a it's a different model because now our terms are net 60, net 30. I mean, I'd be trying to get due on receipt for certain partnerships, but identifying people that had enough growth for us to start at this smaller level, but then also scale with them.

8:17So we have, I cannot mention, I asked for permission to mention it today, but I cannot mention it today, but it rhymes with All Star. you'll be seeing a new partnership this week that we're launching that again just allows us to open up doors to larger volumes because especially for chocolate this is not like any other CPG business the CPG business the next you know break point might be 2 ,500 and then I can go to a co-packer I'm competing at the co-packers. I'm competing with grocery stores. I'm competing with big brands. So my little, oh, I got a 2 ,500 bar order. They're like, baby, that's going to cost us$8 a bar to make for you.

9:06And so we're not really seeing a break point until we're in the high, you know, we're in a six figure kind of like unit number. So by having these partnerships that allows us to like really negotiate with co-packers or even if we're taking on production ourselves to increase our volume, because now I have something to kind of like bet against with it when it comes to funding. I just thought that I have all these eyes on my business. I can get funding. And it's not. But when I talk to venture, when I talk to investors, they're like, you're not going to grocery? And I'm like, no, that's where our business would go to die because that's what everybody else did.

9:47And that's why their businesses are closing. But it's a non-traditional model. And so they're like, well, prove that it works first and come back. So the partnerships are just at a larger scale for us to say like, hey, over the course of this year, we're going to do 100 ,000 bars with this one company, or we're going to do 50 ,000 bars with this one company. And that gives us a little bit more leverage when it comes to proving that this has scalability versus I'm going to try to convince 50 more people to come in here per day. Knowing everything that you know now for the entrepreneurs watching tonight, how would you identify what's the perfect business model for your business?

10:33because we've always taught more is better right scaling i even seen the comments someone's like why don't why not start a venture fund more is not always better right so how if you can go back i know you said your your business model is different but oftentimes the different business model is the one that's going to lead the way how would you identify what your perfect business model is? I think that if I was able to restart, I would start with the equations that I've created now, right? Like, what's the volume of products that I need to make in order to sustain at a specific margin for not only operation, but for my own life?

11:17Like, there's all the statistics. Black women, we're the fastest group of entrepreneurs. We're the, you know, most educated, most everything but the reality is we make the least amount of revenue out of out of every group we are over educated in degrees that don't actually make money like we have the lowest um our degrees are the lowest income generating degrees so there's the other side where we're in a lot of the marketing around it and i know for myself my face was used as a part of many many many campaigns to show love and support for Black women. But I think that when I get back to the forefront of it, that I would really make sure that my business had me in it and was, and whatever model I was choosing, made sure that there was some version of salary for me, maybe not a big ticket item, maybe not whatever, so that I can make these decisions more clearly.

12:13A lot of this business model shifting is out of a place of no for no better words but desperation like right like i need cash in here now this contract they love us and everything but they're not going to pay me for 60 days and that's after i get all of my paperwork uploaded for them to even process the ach and then what happens when she'll go have a baby and then my invoice don't get processed You know, like there are real life things that can, you know, derail you. So when you're choosing a business model and when you're choosing a price point, I think that we have this idea that we want to be these like mega billionaires, but you might be more profitable at a at a two hundred and fifty thousand dollar a year, you know, like price point.

13:01you might be able to take more margin out of that than if you was trying to

13:09scale globally like i from myself i realized we've been really boxing above our weight class uh trying to do this direct to consumer model and and and reach all these individuals that takes money like i you know and and it takes dedicated staff human capital there was a real benefit to not having to pay for staffing for some other businesses. You know, they had 500 years of free labor. I don't have that. My cousin want to come work for me. My cousin bills ain't going to go nowhere. I have to pay her for the day. She can't volunteer. She might volunteer at night after work, but I need somebody during the day.

13:50I need somebody to answer the phone. And AI is doing a lot to help and assist, but there are real physical human capital needs that I would consider and incorporate into whatever model I was choosing. And I think we confuse models with sales channels and thinking that like, oh, we're just adding another sales line and you're really shifting your entire model. If it requires you to operate differently, then it's a different model and it's not an additional sales channel. Yeah, I wanted to bring you on. I want just to put it in perspective for people. So, yeah, you've become a staple in the community as far as Harlem Chocolate Factory, but I thought it was important.

14:32It's like a real life case study because we bring a lot of entrepreneurs on. And a lot of times the stories are extremely successful. You're a success story also, but you're facing hard times right now, right? So I think that this is real education that people can actually learn from because it's ups and downs in entrepreneurship. It's not always somebody making a million dollars a month and somebody that's killing it and stuff like that. Like we've highlighted that story a lot. But I think it's also important to highlight people that may have currently be going through rough patches right now.

15:05So talk specifically about where the business is right now. I know that you're in a business. You're currently closing the physical location. right? And then also talk about how like the access to capital conversation and how you were actually on New York City's website. Yes. Explain that part of it. Right. Like I do a lot of like behind the scenes work because I mean, I literally needed money for myself because there's also a reality, right? Like I don't want to even participate in my own gaslighting where I pretend like there wasn't a sacrifice that went into scaling this, right? Like the original SWOT analysis said that this was capital intensive and it was going to be hard and the market is saturated and all these things.

15:52And the only way in was through this niche. But what I did is I built like a platform for myself because I am extremely, I find myself to be honest about what it really takes to build a business. I'm not going to front for you. I'm not I'm not going to pretend like, you know, like, oh, whatever. I've been on Oprah's favorite things. I did. And they called me twice and all of that. And I could do all of that and I could swing. But what does that do for anyone? If the reality is when I go for funding, I get turned down. When I've tried to raise money for contracts, they shift the goalposts. And so I think I just got to a place of frustration because my face was on the New York City's fund finder.

16:36I launched this GoFundMe campaign after I got rejected for accounts receivable funding. I don't want to close our store. The goal is to keep it in operation. Let's slow it down a little bit. Let's take it. Your face was on New York City's GoFundMe. Explain that. It's called the funds finder, right? That's a website from New York City where you go to get money for your business. Yes, where you find funds. It's literally the funds finder. And you were essentially the poster child for that. Your face was on there. Yes. But you couldn't get funding. Zero funding options available is what it said to me.

17:19And that becomes the thing, right? Like people are like, oh, well, you have all these connections. Like you good. Like you could get funding whenever. And I'm like, yeah, you know where the funding comes from me. I keep my salary in that business every year. like we are still here at my sacrifice and so people were like responding to our go fund me by saying like well you want funds finder or there's like hey i found the link to the new york city funds finder go on there like oh wait your face is on there so i kept getting it and kept getting it so i literally made the video to show like there are no there were no funds like it was zero from 250k plus to to less than 10 000 i there was no funds so how how did they respond to have they responded to this like what what's the update obviously you brought this to their attention obviously you're getting hit up and it's like yo this is this press is actually working negative for me because people think i got it they're not likely to help if they think i got it it's just unfortunately how have they responded since you brought it to their attention obviously they put you there they know it uh they called me that told me that they took the picture down and that i should find some grants to apply for which grants are not the easiest thing just to for those who don't know they just don't fall out the sky why did they why they put the picture up there to begin with um i think that i think that black women are the marketing i think that it's very very easy i think that's the way in to prove that you like show support for the community and i think black women some sometimes are very, very, and I can't, let me not talk for all Black women.

19:00I think that there are times that I've approached entrepreneurship, happy to be invited. And it's encouraged in air that I'm easy to take advantage of. And so I snapped and I went online and I told the whole world that there was no funds because normally I'm quiet and I don't say nothing because maybe it could help someone else. And Black women are very, very amenable. And And, you know, that we get this rap about our attitudes, but I've seen women cry after haircuts and when their nails is messed up. So I we don't say anything. And I said something this time. So they took the picture down. Still no funds.

19:38They they connected me to another funder who had already rejected funding me. But I guess people are moving now, but it's like a eight to 12 week process. And I'm like, I needed money years ago. And so it's just literally like, I would never want to turn to my community that I already know is facing things to like beg for money. But where we're at in this, and especially on the precipice of these partnerships, I'm like, nah, I've taken all the L's that I'm going to take. And I can only come to people and be transparent about where we are and what we have going on and ask for some assistance because my goal ultimately is to help my community.

20:29Like, this ain't Jessica Spaulding's Chocolate Factory. This is Harlem's. And so I feel like I'm just a steward of the opportunity. And so it's worth the fight and the embarrassment because somebody just left a comment before I came on here telling me I should stop begging and all different type of losers and whatever. I took a screenshot of you and you and my file of all the people who ever talked about me because I plan to come back around the block. But, um, you from my tribe. You really from all of us. You really from all of us. No, no, no. For real, for real. I grew up on one level between Fifa and Lennox.

21:02I've lived in Harlem my whole life. Stop playing with me. Y 'all be talking very crazy on this Internet. And I'm trying to be then. Stop playing on Beyonce Internet, please. Please. When you never see nothing. Yeah, but a lot of people are going through pain and take it out on others. To have a successful business, what pushback were they giving you for not giving funding? For those who are looking to pitch, what roadblocks were they putting in front of you to tell you no? I will tell you that the amount of goalposting that I have faced during this, so it's like when I first started and I was in, there was money at the bottom.

21:44When I had the sad story, the single mom that, you know, I have my two kids and I don't have my life together and I'm going to try to find a job. They was throwing money at me. I got a micro loan when I had no job. So it built in me that like, OK, well, if I prove that I have whatever, I'm going to get it. Then they gave me$10 ,000 and I paid it back. And then they gave me$20 ,000. and I paid it back. And then it was time to like, put your money where your mouth is. And I'm like, yo, I want to build out this facility. I think that we can really like grow contracts. I found a way in, into this industry.

22:25Then it was like, ooh. Too risky. We don't know if you, too risky. Like, ooh, what? You're going to do what? What do you, everything I just said, I was going to do. The things that I, I didn't. And, and so the goalpost moves. It was get a contract and come back. Come with a contract. Yeah, but how do we know it sells? Like airports? Like people don't even spend money in airports. Huh? Okay. Hotels. I mean, are people even staying at hotels anymore? Is there any, like, what? Then I'm like, all right, let me come back with the invoice. I'm going to come back with the invoice. Yeah, but you didn't ship the product yet.

23:08So, you know, this doesn't really funder, you know, fall under accounts receivable. you need growth capital okay well you look at the growth give me the capital yes but you know what we would really want is the is the contract i can't get the contract until i give them the product and they that they see that it sells yeah so after it sells then we'll do it but we know it sells because it's been selling because i got 10 years of historical data that it sells what and And that's when I realized like, oh, everybody's lying to me. Y 'all hate me. And let me just stop. And I just did the GoFundMe. And I was like, here, boom.

23:48Like, let me do this. And then I'm going to double back and charge everybody twice. And I have a list. I want you to know you're all in my little black book. Allegedly. We're just trying not to make the list. Not in that way, but just like, yo, you know, because these same people, when the cameras come out i know what y 'all are gonna do y 'all want to pull up y 'all want to oh let me take a picture i'm so proud of you i'm so proud and we knew you was gonna make it i want you to know i know who who all you are and i am it's me and 50. you will not get in you will be standing outside you will not get it i am very nice i'm very sweet i don't have i i no no but we don't we're gonna pray for them now we're gonna pray so so chocolate factory definitely a staple in the community explain the go fund me explain the go fund me what's it for what's the goal um yeah and uh it yeah explain that so it's yeah so what we what we're trying to do is we have like some specific debts that we need to clear in order to just free up cash flow then on the other side there are deposits that we need to make immediately in order to fulfill these contracts and the if we wait we're going to be outside the window and we're not going to be able to fully take advantage of them and so the gofundme we're trying to raise 50k if we could get to 100 y 'all would literally be saving my little life but 50 is what we need to like you know like really make these specific investments to have that leverage the way that we need to for our cash flow and really not be waiting for 60 days for the invoices to clear and be able to go out after even more contracts.

25:46And what's the website or what's the Instagram? How can people, if they're interested, where do they go? You can go to harlemchocolatefactory.com and we have the link there. And then on our Instagram, it's Harlem Chocolate Factory. The link is in our bio. Ultimately, I want to create an entity with community shares. I'm still researching on how to do that and how to set up the structure because I want the community to have shares in it. This is the temporary need that we have that will help us bridge. And yeah. well thank you for coming on thank you for having me we really appreciate your story and I'm going to encourage everybody to try to give what they can because it's important we got to trying to save a black business a vital part of our community we understand that entrepreneurship is a real gateway and you talk about businesses it employs people, it gives level of inspiration hope and is the whole um economic system that's done and when you think of harlem you think of the mecca of black culture going back from you know 1920s harlem renaissance and sugar hill and all that so you know um it's the it's the season of giving some people say christmas is the season of giving but it's black history month so i feel like february is the season of giving and we wanted to highlight you just to you know for educational purposes but also we have a platform so we try to do good with our platform when we can as far as to help people that have some level of need because we're all going to need help at some point in time.

27:34And it's a good story as far as what you've been able to accomplish and would love to see the trajectory change on the situation. So yes, go to Harlem chocolatefactory.com if you're interested and we will definitely stay in contact. Wish you all the best and thank you for coming and telling your story. We greatly appreciate it. We appreciate you. Thank you so much. Thank you for sharing. Thank you. Thank you guys. 1969, Malcolm and Martin are gone. America is in crisis and at Morehouse College, the students make their move. These students, including a young Samuel L. Jackson, locked up the members of the Board of Trustees, including Martin Luther King Sr.

28:22It's the true story of protest and rebellion in Black American history that you'll never forget. I'm Hans Charles. I'm Menelik Lumumba. Listen to The A-Building on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Over the last couple years, didn't we learn that the folding chair was invented by Black people because of what happened in Alabama? This Black History Month, the podcast Selective Ignorance with Mandy B unpacks Black history and culture with comedy, clarity, and conversations that shake the status quo. The Crown Act in New York was signed in July of 2019, and that is a bill that was passed to prohibit discrimination based on hairstyles associated with race.

29:00To hear this and more, listen to Selective Ignorance with Mandy B from the Black Effect Podcast Network on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Bowen Yang. And I'm Nat Rogers. During this season of the Two Guys Five Rings podcast, in the lead up to the Milan Cortina 2026 Winter Olympic Games, we've been joined by some of our friends. Hi, Bowen. Hi, Matt. Hey, Elmo. Hey, Matt. Hey, Bowen. Hi, Cookie. Hi. Now, the Winter Olympic Games are underway. We are in Italy to give you experiences from our hearts to your ears. Listen to Two Guys Five Rings on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

29:43What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have? Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. Mind Games, a new podcast exploring NLP, aka neurolinguistic programming. Is it a self-help miracle? A shady hypnosis scam? Or both? Listen to Mind Games on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts.

30:23This is an iHeart Podcast. Guaranteed human.