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Lesbian couple overcome investor bias, succeed with Hip Chick Farms

It is no mystery that starting your own business can be difficult. Financial choices, planning and even legal hitches can make the difference between a successful business plan thriving or one that goes cold before it even gets started. These factors are also present in the LGBT community, but in some cases the struggle can be harder.

Married couple Sarafina Palandec and Jennifer Johnson of Hip Chick Farms know too well the conflicts of entrepreneurship, but tell San Diego Gay & Lesbian News how they survived being female and gay within the confines of a male-dominated shark tank.

Palandec talks to SDGLN about some of the conflicts she faced while trying to get her business off the ground. Together with her partner they made their brand Hip Chick Farms a success from the counters of their farmhouse kitchen to those of the marketplace.

Palandec and Johnson have been together for more than seven years, meeting in the social circles of a popular lesbian bar in the Mission District of San Francisco. The two knew they were a perfect match and have been together ever since. The couple have a 4-year-old daughter Rubyrose, and live outside the big city on a farm in Sebastopol, an hour's drive north of San Francisco.

Johnson, a professional chef, said she has worked under the tutelage of Alice Waters and was Executive Chef for the wealthy Getty family. Her skills for making gourmet nutritious food was the inspiration behind the idea that frozen meals need not be unhealthy to be convenient. Thus starting an idea that with Johnson’s skills and a little financial backing, the couple could start a business, giving people across the country access to these meals at their local supermarket.

“When we bought our farm to raise our daughter, learning about farm animals and great vegetables, we thought we’d like to take that out into our larger community and create a line of products that were beautifully made, featured Jen’s amazing recipes, and were convenient because families are really busy today,” Palandec said.

In order for this idea work, the couple had to agree that the meals would need to be transparently sourced, organic, antibiotic free, hormone free and non-GMO. Once this decision was firm, they launched their product line and started placing the frozen meals in local organic stores and specialty food shops. Their biggest vendor was Whole Foods, Palandec said.

Challenges of raising money

All of this work and promotion needed capital. Palandec said they “bet the farm” on it, taking a second mortgage out on their home and getting their friends and family to invest in the business. Going further, Palandec decided to find equity investors, starting with traditional angel investing groups and venture capital organizations, but soon accepted it was a dead end.

“We quickly realized it wasn’t the right fit for us, they didn’t get it,” she said.

Moving on, Palandec began looking into investing groups for women-only entrepreneurs. These groups, such as Golden Seeds and Pipeline, generally invest in women-led start-ups. Palandec was beginning to see that this was the route she wanted to take.

“Pipeline is really an interesting model," she said. “Their mission is to create more female investor and have them invest in more women-led enterprises. I applied to Pipeline. … I go and pitch why Hip Chick Farms is so great and why they should invest in us. I did that in Washington DC last year, and the women -- the investors in the group, they got it! They understood our brand, they understood our target consumer. They saw the potential for our growth. They chose to invest in us, and since we’ve closed the deal they’ve been incredibly supportive.”

When asked if Palendec endured any sexual discrimination or homophobia in her efforts to find financial backing, her answer is surprising.

"Not with Pipeline fellowship,” she said. “Successful fundraising is a very challenging process. Women get something like 5% of the funds from all the equity races out there. Then we’re an LGBT couple, which is a family business, we had some clarifications to make as far as what ‘partner’ means. We’ve definitely had folks who don’t believe in investing in family businesses, they don’t believe in investing in women — they just have different values. We had people blatantly say that, and I know that’s a shared experience.”

How to avoid LGBT discrimination by investors

SDGLN asked Palandec how to avoid being discriminated against if an LGBT person or couple wants to start their own business. She offers encouragment and said there are many allies in the investment community who will take an honest look at your business model and not your sexuality.

“There are a lot of great organizations. Absolutely Pipeline Fellowship, but there is also StartOut: Their mission is to support LGBTQ entrepreneurs, and to match them with investors. They have a lesbian entrepreneurship mentoring program. Also another group we got involved in is the NGLCC, National Gay and Lesbian Chamber of Commerce, you can gain certification as an LGBTQ owned company. There are lots of big companies who are looking to diversify their supply chain,” she said.

Palandec explains that big companies set aside a percentage of their budget to support a certified diverse business. NGLCC helps to make those connections with corporations, lending a helping hand to the beginning LGBTQ entrepreneur.

Their business journey has been one filled with surprises and rewards. From trying to get funding in a discriminatory world to connecting with the right investors who understand the importance of LGBT-owned companies. Their Hip Chick Farms frozen meals are a success selling in Whole Foods markets across the country. But their story doesn’t end there. Palandec said there is an exciting direction the company will take, but can’t reveal any details about it at the moment.

ADDITIONAL READING

If you’re thinking about taking your business to the next level, it is good to know that there are LGBTQ-friendly investors out there that can help. For more information about how you can proceed with getting investors interested in your business model check out the links below.

Pipeline Fellowship

NGLCC.org

StartOut.org

For more information about Hip Chick Farms and where to buy their products, check out their website HERE.