To boost economically depressed neighborhoods, it takes more than just supporting existing businesses. It’s equally, or even more important, to give aspiring business owners a leg up. That’s what Aja Hardy, a veteran strategist, found when she went to work as a FUSE executive fellow in Cleveland, helping promote early-stage entrepreneurship through public-private partnerships.
In her research, Hardy found that supporting businesses in early stages of launch could be a critical factor to boosting struggling communities. “There are a lot of not-for-profit organizations here in Cleveland helping businesses and entrepreneurs, but their bread and butter is helping businesses that are stage two to four,” she said. Those stages are defined by businesses that are just coming off the cusp of being a startup, have been in existence for three to five years, have $250,000 in revenue or more, a couple of employees, and, in some cases, an equity partner.
As it turns out, the majority of economic development funds coming from state, county, and foundation grants also contained specific eligibility criteria that often pre-selected for companies at the middle stages of the growth cycle. What was missing from the ecosystem were services that could help early-stage businesses get started and more established, late-stage businesses achieve maturity.
“If you look at the business stage pipeline from stage one to five, it looked like a pregnant snake,” Hardy said. “We had so many organizations helping businesses in the middle of this pipeline.”
Strong foundational support for promising entrepreneurs would increase the likelihood that businesses could attract capital, effectively manage inventory, and grow their customer base.
Hardy set out to establish public-private partnerships that could help fledgling business owners in three areas: access to new markets for revenue generation, access to innovative business education, and access to capital. She focused on finding private companies that shared goals with the city’s in order to develop relationships for the long haul and compares the process to a courtship. “We’re trying to date these companies,” she said, “with the intention of putting a ring on it.”
Hardy helped establish the following public-private partnerships.
KIVA
To help entrepreneurs with financing, Hardy secured a three-year partnership with Kiva, a crowd-sourcing platform that enables business owners to raise money, apply for loans, crowdfund, manage payments, and more. The city now has a custom platform through which it aims to crowdsource $300,000 in loans for 60 early-stage businesses over two years.
The partnership made sense on several levels, said Hardy, as Kiva is a mission-oriented business that aims to support many of the same underserved populations that Cleveland is seeking to bolster, such as women, minorities, and low- to middle-income entrepreneurs.
SQUARE
Square, which focuses on helping small businesses grow, is a developer of software for processing payments. Hardy sought a partnership with Square partly because it was already invested and present in Cleveland, having hosted workshops for budding entrepreneurs, including an event that taught startups how to use e-commerce to grow their businesses.
One workshop attendee was Cleveland-native Shirounda Taylor, a former mortgage-lender-turned-entrepreneur who recently opened a boutique spa on the city’s west side. The subject was of keen interest to Taylor, who hopes to open two more locations in Cleveland and, eventually, expand into other states. Since then, Square has hosted additional workshops, and it is investing in credit unions and community development financial institutions in the Cleveland area.
Cleveland signed on to be a local partner with Google for its Grow with Google suite of educational tools, which were developed to help entrepreneurs grow their businesses as well as personal skills and careers. Through partnerships, Grow with Google also provides free resources for teaching digital skills to cities and community organizations. As with Square, Google had already begun to cultivate a presence in Cleveland when it hosted an event for business owners in 2017.
The new collaboration includes development of a custom web portal for accessing Grow with Google and other tools for the city, as well as workshops led by Google or trained city staff. The portal offers interactive modules, for example, that allow business owners, developers, and investors to create their own market analysis reports using real-time GIS and economic data of the city.
To create the portal, the city partnered with EDsuite, which helps cities market themselves for economic development, and Localintel, which provides website tools for data-driven decision making.
If successful, these partnerships will not only help fill a gap in Cleveland’s entrepreneurial ecosystem, but they will also strengthen the city’s ties to its varied small business owners.
Of the partnerships, Hardy said: “I wanted to find global companies that could boost Cleveland’s brand by being here and investing in our growth. Google is a great content developer. EDsuite and Localintel are great web platform developers and data aggregators. Together, it fits.”
If successful, these partnerships will not only help fill a gap in Cleveland’s entrepreneurial ecosystem, but they will also strengthen the city’s ties to its varied small business owners. By building these relationships, the city is ultimately seeking two outcomes: community regeneration and wealth creation.
Cleveland entrepreneur Taylor welcomes the additional support. “Many people have a lot of talent and skills,” she said, “but there’s a difference between that and actually running your business. One of the biggest problems I’ve had is trying to find more knowledge.”
She is especially eager for resources to help her gain access to capital, as well as more events like the one hosted by Square, which was an opportunity not just to learn but to network with business owners who share similar challenges. “It’s very hard to get help,” she said. “Most of the business owners I know are doing everything themselves.”
Rikha Sharma Rani is a Bay-area writer and journalist. Her work has been featured in The New York Times, CityLab, Politico Magazine, and more.
Photo credit: DJ Johnson on Unsplash