At the end of 2015, Inner City Advisors and its partner organization, Fund Good Jobs, formally recombined as one organization, uniting a rock-solid team that has a healthy obsession for delivering results, taking smart risks, and learning how to solve challenges in real time.
I am fortunate that my profession is also one of my greatest passions: working with entrepreneurs to improve and scale their businesses. It is a privilege to build on the legacy of our former CEO, Jose Corona. As we celebrate our 20th anniversary, I am reminded of the opportunity Jose gave me nearly ten years ago by inviting me to join the ICA family. I come to this role from a unique vantage point, having worked with ICA Fund Good Jobs over the past 10 years as a volunteer, portfolio manager, COO, founder of Fund Good Jobs, and finally as CEO of the recombined organization.
I have seen first hand the power of people coming together to advise and invest in small businesses that create good jobs for those who need them the most. This energy has led to a number of important partnerships, building an ecosystem of entrepreneur support that is truly poised to move the needle on good job creation.
In fact, every dollar’s worth of advisory support for our companies yields $43 in employee wealth.
Over our 20-year history, we have worked with hundreds of companies that have created thousands of jobs and earned hundreds of millions in revenue. We are extremely proud of the incredible successes of the companies we have served, including legacy companies like Revolution Foods and Blue Bottle Coffee, as well as more recent companies like Back to the Roots, Red Bay Coffee and Firebrand Artisan Breads that have become the foundation of our investment portfolio. Over time, as we have learned about the evolving needs of our entrepreneurs and community, we have drilled down on the strategies that make our model more impactful. This requires an entrepreneurial orientation and commitment to constant learning, as well as intention, focus, persistence, patience, and ultimately a willingness to pivot and adapt based on a rigorous evaluation of our impact.
As we embark on the next 20 years of our history, our mission is to educate, accelerate, and invest in high-growth small businesses in order to create accessible good jobs that lead to equitable communities for all.
The work of ICA Fund Good Jobs is rooted in our hands-on experience and an awareness of broader economic trends. Job quality has decreased over time, becoming a major driver of growing disparity. Many of the fastest growing sectors of the economy produce low quality jobs, so we must support businesses to create not just jobs, but GOOD jobs that provide good pay, good benefits, life ladders and a strong culture. Small businesses supply many of the jobs in our economy, and entrepreneurs have a high degree of agency regarding the quality of jobs that they create and the people they employ. We know that by providing under-resourced entrepreneurs with targeted education, advisory support and access to capital, their businesses can become sites for high quality jobs and for increased economic inclusion at the local level.
The urgency of our mission demands that we invest in disrupting the status quo. We can see where the solutions are missing, and we are uniquely positioned to tackle these challenges by doing what we do best: rolling up our sleeves and working alongside entrepreneurs in order to grow businesses and create good jobs.
This past year has represented a pivotal moment for ICA Fund Good Jobs. As a part of the recombination effort, we rallied our team with renewed focus. We engaged our network of entrepreneurs, advisors and our board members to listen and learn about what we do well, and where we can do better. We developed disruptive, replicable tools that support our core competency: helping small business owners create good jobs. These tools will be instrumental in scaling the impact of our work throughout the Bay Area and beyond. Most importantly, in 2015 we served over 100 entrepreneurs, connecting them to the resources they need to grow and create good jobs.
Three main objectives will guide our activities through 2016 and beyond:
- We will diversify our funding streams across grants, earned income, and investment opportunities to sustainably scale our impact.
- We will deepen our focus on educating, accelerating and investing in good job-creating small businesses.
- We will celebrate our 20-year evolution and set a strategic growth vision to position our work for the next 20 years.
We must move with the same entrepreneurial hustle as the companies we serve, and explore the various ways we can embody our values in our work. We believe that everyone has a role in funding good jobs, and I encourage you to embrace your role in this work, whether as a supporter, advisor, entrepreneur, or volunteer.
Let’s stick together as we work toward building an equitable community and a world in which everyone has access to a good job.
Sean Daniel Murphy
CEO, ICA Fund Good Jobs
At the root of every good job is a good employer – an entrepreneur committed to investing in their employees and their community. ICA Fund Good Jobs creates good employers by educating, accelerating, and investing in mission-aligned entrepreneurs who are committed to becoming change agents in their communities.
Growth is not a strategy. Growth takes strategy.
Our entrepreneurs are experts in their craft, hustling daily to roll out the Bay Area’s very best products and services. The work of ICA Fund Good Jobs begins by helping these entrepreneurs take the necessary time out of working IN their business so that they can focus on working ON their business.
Our signature Growth Strategies course is taught by Michael C. Bush, a serial entrepreneur and the CEO of A Great Place to Work Institute. The course takes academic business concepts and boils them down to practical tools that entrepreneurs can implement immediately. Meanwhile, tailored workshops provide one-on-one advising throughout the year for smaller cohorts of companies seeking support in raising capital, building strong teams, or beginning to think about their growth strategy.
These offerings are powerful tools for community building. The companies that have participated in our classes and workshops often remain in the family for years, networking with other entrepreneurs, receiving ongoing informal support, or, for a select few, working with ICA Fund Good Jobs in deeper ways. This networked approach to learning allows us to make connections between our companies and workforce development partners that amplify the impact of our work. We are proud to work with agencies like The Bread Project, Youth Radio, Swords to Ploughshares, St. Vincent de Paul, Beyond Emancipation, and others to ensure that new jobs are accessible to those who need them most.
Our network of high-caliber pro bono business advisors has been the foundation of our organization’s success over the past 20 years. Our advisory offerings are what truly set us apart, and we are excited to go even deeper. ICA Fund Good Jobs is proud to announce the launch of the Good Jobs Accelerator in 2016. The Accelerator works deeply with companies to build a strong foundation for sustainable growth and good job creation. The businesses we invite to the Accelerator will develop focused strategies to increase their company’s mission returns as well as financial returns. Leveraging our network of expert pro bono advisors, Accelerator companies receive the resources they need to create good jobs.
This work will ultimately reward entrepreneurs for making decisions that benefit their employees and community. The foundation of our approach helps our companies proactively plan for good job creation, recruit new employees, and develop internal leadership. Simultaneously, we help entrepreneurs identify the amount and type of capital they need to raise to achieve their goals, and the obstacles they must overcome to secure it.
“Betting on people who build people”
is a mantra our whole team takes to heart. The entrepreneurs most aligned with our values and most poised for scale receive capital investments tailored to their individual needs. The small business sector suffers from a lack of access to growth capital. Therefore, we believe in using capital as a tool to meet this pressing need and to influence the creation of good jobs.
Since the establishment of our investment fund in 2013, ICA Fund Good Jobs has invested $2M of growth capital in five Oakland-based businesses. As a result, we have witnessed the creation of dozens of jobs, and the establishment of community pillars that are redefining what it means to be a successful small business in the Bay Area.
This work is only possible because of capital partners that are willing to co-invest in deals that would not happen without the support of ICA Fund Good Jobs. Allies like Signature Development Group, New Resource Bank, Whole Foods’ Local Producer Loan Program, Pacific Community Ventures, Community Reinvestment Fund, and many others ensure that every dollar invested by ICA Fund Good Jobs is magnified for the greatest impact.
Our companies have access to ICA Fund Good Jobs’ deep roster of advisors, professional service providers, and other business experts, who work together to provide hands-on support to meet almost any need. This personalized approach and no-nonsense business expertise truly set ICA Fund Good Jobs apart.
There’s an advisor for any need we have
says Colleen Orlando who co-owns Firebrand Artisan Breads with Matt Kreutz. Firebrand is an artisanal bakery and retail store that joined the investment portfolio in 2015.
“We can be transparent and open without judgment because we know they are committed to our success.”
With the investment, the company was able to open a flagship retail location, and a new 4,800 square foot bakery facility, all while employing more than 50 workers and paying $15 per hour in average wages.
“ICA Fund Good Jobs has created a very trusting, safe space for entrepreneurs. We feel like it’s not just us two owners,”
“Thanks to ICA Fund Good Jobs, we have an army supporting Firebrand and there isn’t a day that we don’t engage with ICA Fund Good Jobs on some level. We know we are no longer alone.”
ICA Fund Good Jobs’ system-changing approach to small business funding involves making bets on companies that other capital providers can’t make. This is because we can embrace risk differently, thanks to deep pre-capital engagement with our portfolio companies. After an entrepreneur has participated in our education and accelerator offerings, we have an intimate understanding of the company’s mission alignment, financial health, growth strategy, and potential for good job creation. Knowing this, ICA Fund Good Jobs can mitigate the risk of an investment and make deals that other lenders and investors deem too high-risk or labor intensive. Specifically, we provide investments of $250K and above, structured creatively to support companies of different sizes, capital needs, and financial conditions. We then leverage our participation to obtain capital from other sources, typically matching our own investments by at least 3:1.
By funding the highest-risk portion of a company’s capital need, we positively alter the risk profile of a business, bringing other capital providers to the table. Furthermore, our portfolio companies can achieve a lower interest rate on the capital we provide by advancing the good jobs mission. This could include activities such as implementing or maintaining health benefits, providing equity to employees, or hiring from workforce development agencies.
These deals are made possible through partnerships forged over our 20-year history. We work with community banks, Community Development Financial Institutions (CDFIs), and local angel investors to make an even bigger impact. Our investments have unlocked more than $13 million from our capital partners.
Back to the Roots is a maker of ready-to-eat and ready-to-grow foods with a mission to “undo foodTM and reconnect families back to where it comes from.” We engaged Back to the Roots through our education and advisory services back in 2010. In 2013 we became their first and sole investor for $650K. We’ve worked together over the past six years and are proud to support the company’s growth and recent raise of $10 million.
After ICA Fund Good Jobs’ lead investment, the company secured additional capital from local investors like Annie’s President John Foraker, Joie de Vivre Hospitality founder Chip Conley, Living Social’s co-founder Aaron Batalion, former Jamba Juice CEO, James White, and many others. Since joining the ICA Fund Good Jobs portfolio, in addition to closing their $10 million investment round, the company has more than doubled its revenues and expanded its sales nationwide. And while the company is growing rapidly, it is holding to the good job covenants that accompanied our original investment, by offering full health, vision, and dental benefits to all of its workers.
Going Deeper With The GEM
ICA Fund Good Jobs’ mission has always been about growing jobs, but over our 20-year history, we have realized that simply creating jobs is not enough. We have now turned our focus to growing GOOD jobs, defined by livable wages, health and wealth building benefits, a supportive culture, and career ladders that provide opportunities for professional development and advancement.
Meanwhile, as the social fabric of “the inner city” transformed, we shifted our focus from solely on the geography of the job, to also include the people accessing the job. Many in our community face barriers to employment, such as criminal records, disabilities, or limited education, which prevent them from ever being considered for good jobs. Therefore, it is essential that we support entrepreneurs who are committed to providing accessible good job opportunities.
Finally, we have learned that entrepreneurs and disadvantaged job seekers must overcome a challenging combination of anxiety and cultural hurdles to make the employer/employee relationship a successful one. Preparing for people feels just as daunting to our entrepreneurs as preparing for capital, and it is just as critical for building thriving local businesses and communities. Now, we see that a core part of our model is not only the creation of good jobs, but of good employers, because good employers create good jobs.
That is why, in 2015, we developed the Good Employer Matrix, or GEM. This proprietary tool provides a framework for understanding the pathway an employer takes to creating accessible good jobs and is built explicitly to represent the entrepreneur’s perspective. It does this by scoring job quality along five core pathways to a good job: wage levels, job accessibility, benefits provided, company culture, and professional development.
Thus, the GEM also provides a comprehensive assessment method for ICA Fund Good Jobs to measure the quality of the jobs our companies provide and establish a plan for sustainable improvement.
The GEM is used in all stages of our work, from companies that apply to the Growth Strategies course, to the growing businesses going through our Accelerator program, to the companies in our investment portfolio.
And with the positive entrepreneur feedback we’ve received, we are excited that the GEM is working – we are bringing added value to our businesses, and we are even more excited about what it can do at scale.
You can smell the delicious aroma of coffee blocks away from Red Bay Coffee’s new warehouse and roastery in East Oakland. As you enter, two gleaming Probat roasters take center stage; one of which just recently cleared customs on its way from Germany. Several Red Bay workers busily mill about, while others huddle around Macbooks on reclaimed wood benches.
Having secured funding from ICA Fund Good Jobs, the East Oakland startup is in full growth mode. These jobs are the product of a relationship between founder Keba Konte and ICA Fund Good Jobs, which started more than five years ago.
As the owner of Guerrilla Café in Berkeley, Konte attended our 10-week Growth Strategies course at Mills College. After finishing the course, Konte opened a second coffee shop, Chasing Lions, on the campus of San Francisco State University. All the while, he continued to grow his vision for a sustainable business that could support his community by transforming traditionally low-wage work through a profit-sharing model. Thus, the idea for Red Bay Coffee was born.
With the pro bono support of strategic advisors like Michael C. Bush, Konte grew his vision and quickly transformed it into concrete plans; the company was officially launched in 2013. As the business grew, Konte engaged with ICA Fund Good Jobs’ strategic advisors and professional service providers. When Konte needed to access growth capital in 2014, the team at ICA Fund Good Jobs was already intimately familiar with Red Bay’s business, growth strategy and potential to create good jobs.
Over the next year, the team worked to build out Red Bay’s capital readiness, focusing on long-term growth strategy development, capital scenario planning, debt readiness, and financial forecasting. Founder Keba Konte and COO Kori Chen worked with our team to build out their company’s “people readiness” through a job-creation forecasting model, tactical strategic HR support, and leadership development for the Red Bay management team.
Two years, a successful Kickstarter campaign, and a $500,000 investment later, the company has opened its new roasting space and acquired new wholesale contracts, including one with ride-sharing app company Uber. Today, Red Bay employs over 20 people and pays a minimum starting wage of $15 per hour.
Red Bay has also benefitted from the network effect of engaging with other companies in the ICA Fund Good jobs family. For example, ICA Alumni company Give Something Back Office Supplies has long been a champion of hiring employees through workforce development partners. Red Bay is working with Give Something Back to develop new strategies for recruiting employees from the local community and to build partnerships with organizations that work with the prison reentry population. Red Bay Coffee actively sends out job descriptions and seeks placements for open positions at organizations like Pathways to Resilience and Roots to ReEntry. The company offers professional development and training opportunities for its staff and for new hires.
As for what’s next? Red Bay is “bringing beautiful coffee to the people” by opening a retail location in Oakland’s HIVE complex – a coffee shop in a converted shipping container that will operate as a worker-owned cooperative, allowing current and future employees to directly share in the profitability of business. We’re proud to invest in entrepreneurs like Konte, who is committed to generating wealth in ways that make sense for the community and the bottom line.