PHILADELPHIA–(BUSINESS WIRE)— On December 9, 2019, over 50 regional leaders of color and women — including entrepreneurs, investors, thought leaders, and philanthropic executives — convened at The Enterprise Center in an Opportunity Zone in West Philadelphia to repair gaps and begin to create innovative equity solutions to today’s capital access system for minority- and women-led businesses. These leaders joined others focused on transforming disinvested communities of color by beginning to create a continuum of inclusive capital, including impact-focused Opportunity Zone equity.
“Small business can be used as a social good, generating good jobs, infrastructure, ownership, and wealth,” said Congressman Dwight Evans (D-PA-3rd). Philadelphia is a majority-minority city where approximately four out of five businesses are owned by white individuals (comprising just 36% of the population). The Roundtable was designed to showcase regional and national innovations, including newly assembled Opportunity Zone business-focused funds, that can be replicated and adapted to finance minority- and women-led businesses and close the racial wealth gap, a contributing factor to the city’s persistent 25% poverty rate.
“How do we grow — 5x or 10x — the number of businesses owned by people of color?” asked Bruce Katz, co-founder of the Economic Equity Network and Director of Drexel’s Nowak Metro Finance Lab. “Through a new system of community wealth-building to regenerate our cities.” Allison Kelly, of ICA Fund Good Jobs (a CDFI) agreed, explaining, “We need to align investor expectations and timelines with actual community needs and expectations. Our [traditional] timeframe with returns is extractive. If we want to create value, it takes time.” It also takes flexibility to scale existing businesses, noted entrepreneur Patricia Claybrook, founder and CEO of Jidan Cleaning, which received its first equity investment from the Enterprise Center.
“If you look at scaling and growing minority entrepreneurs in urban and rural communities, the most important change agent is capital,” said Della Clark, President of The Enterprise Center, an intermediary that has connected minority-owned businesses to capital, community, and business for 30 years. “We are determined to bring capital not only to West Philadelphia but also to other parts of this city and region,” said Clark, who also introduced an equity fund that her organization is raising for this purpose.
Indeed, a highlight in this second regional Roundtable spearheaded by the Economic Equity Network, consisted of introductions and networking among equity investors and OZ-headquartered minority- and women-led businesses seeking capital to scale. The venture-focused OZ funds attending, ArcTaris, Community Outcome Fund, CapZone, and the Verte Opportunity Fund, represented a component of Opportunity Zone community-driven impact financing that has seen little take-up until now. These investors joined existing Philadelphia lenders, philanthropy, and impact investors including, The Reinvestment Fund, Ben Franklin Technology Partners, PIDC, United Bank of Philadelphia, Halloran Philanthropies, Patricia Kind Family Foundation, United Way of Greater Philadelphia, and EJF Philanthropies, in rolling up their sleeves and exploring new capital stacks and networks. Katz praised Philadelphia’s first-mover potential in this capital-access space, given the amount of innovation and the incredible network of practitioners in the room.
“The resources are here,” said Lin Thomas, Philadelphia-based founder of Supra Office Solutions and CEO of EMSCO. “It’s not about what Philly can’t do or won’t do, it has to be about what we WILL do.”
One of the key takeaways from the session is the critical role of responsible community real estate development in strengthening and scaling local business. “When we look at both place-making and place-saving, we provide opportunities for every type of business: from the small mom-and pops to the large commercial businesses,” said La Shon Walker of FivePoint, continuing, “Because that’s what community really looks like.”