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Sunday, 01 April 2018 22:47

Organizations support minority entrepreneurial initiatives in West Michigan

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GRAND RAPIDS –– An array of organizations in West Michigan have launched new initiatives aimed at bridging the wealth gap in a region characterized by vast income disparities. 

From large financial institutions to universities to entrepreneurial support organizations (ESOs), local institutions want to create more opportunities for minorities and people in “marginalized” neighborhoods. 

For example, Grand Rapids-based Start Garden has tapped more than a dozen banks to help with its inaugural 100 Ideas program. Aimed at “promoting the entrepreneurial spirit for everyone,” the 100-day-long program will wrap up early this month. It gives fledgling entrepreneurs the ability to pitch business ideas by video for the opportunity to receive $1,000 to flesh out their concepts. 

In the 100 Ideas initiative, entrepreneurs could receive another $20,000 to further grow and scale their business ideas.

While the amount of capital may not be massive, to Start Garden co-director Jorge Gonzalez, the program is more about giving opportunities and a “hand-up” rather than hand out to would-be business owners in areas of Grand Rapids where disinvestment has been rampant. 

Financial institutions were a natural partner for the program, which has a total pool of about $300,000, according to Start Garden executives. 

“When I talked to banking partners, they realized that a lot of the entrepreneurs that are starting up, when they go to a bank and try to get a loan, they’re going to get denied because they’re not bankable,” Gonzalez told MiBiz. “It’s in their best interest for them to partner with us and provide resources to us so we can go back and equip these entrepreneurs and say, ‘You know what, you’ve got a great idea.’” 

As this story went to press, more than 600 people in the community had pitched business ideas ranging from technology startups to service businesses and restaurants, he said. 

Gonzalez, the former executive director of the West Michigan Hispanic Chamber of Commerce, acknowledges that $1,000 might not be enough capital to grow a business, but ultimately, the initiative will help to connect entrepreneurs with potential institutional partners. 

“Historically, (minority) communities have been marginalized, and they haven’t been given the opportunities,” he said. “For someone who has never had that opportunity to have a free $1,000, what we’re saying is, ‘(It may) make it or break it and if you break, so what — it’s not your money.’ Right now, people in the neighborhoods that have ideas, they don’t have the rich uncles or the access to banks or credit.”

Fifth Third Bancorp’s Patrick Lonergan agrees. 

The Cincinnati-based financial institution has invested $50,000 into the 100 Ideas initiative with plans of investing another $50,000, said Lonergan, the bank’s senior vice president for community and economic development in Grand Rapids. 

Ultimately, the bank’s executives want to better connect startup businesses of all kinds with needed capital. 

“We’ve been working around just where are there gaps in access to capital and the resources necessary to start a business,” Lonergan said. “The 100 Ideas really came from asking that question. We have a pretty robust entrepreneurial ecosystem, but there are gaps that are keeping us from having the most diverse possible small business environment that we could have.”

In addition to Fifth Third Bank, 12 other banks from around West Michigan, as well as a variety of philanthropic foundations, have chipped in to support the 100 Ideas initiative.

Sources contacted for this report noted a variety of recent studies showing that West Michigan continues to struggle with broad-based wealth creation. For example, Forbes named Grand Rapids the worst place economically for African-Americans in 2015. Additionally, a 2016 study from the Economic Policy Institute, a Washington, D.C.-based think tank, found the average income of the wealthiest 1 percent in the Grand Rapids-Wyoming metropolitan statistical area was 25 times higher than the remaining 99 percent, making it the 59th worst MSA in the country for income inequality. 

The reports have spurred the creation of several initiatives, including 100 Ideas at Start Garden. 

FROM ‘HUSTLERS’ TO ENTREPRENEURS

While Start Garden seeks to ramp up its support for minority entrepreneurs, higher education — also with the help of local foundations — is  expanding its efforts in the area. 

Ferris State University in late March received additional funding for its Latino Business and Economic Development Center, which is aimed at addressing “issues of workforce development, economic disparity, civic engagement, and overall leadership development in Grand Rapids’ Latino community.”

The Grand Rapids Community Foundation’s Fund for Community Good supported the center with a three-year, $150,000 grant.

“Grand Rapids Community Foundation is committed to working with community partners like Ferris State University to build an inclusive economy to grow a thriving community,” Foundation President Diana Sieger said in a statement. “This program amplifies the ability for our region to thrive due to the focus on diversity. The bilingual, culturally-relevant and mentorship-based efforts of the LBEDC have proven to help young people gain workplace and community leadership skills and grow networks of support.”

With the increased funding, the center seeks to ramp up its programming and networking opportunities for participants, according to Executive Director Carlos Sanchez. 

Start Garden’s Gonzalez said the emergence of institutional support for minority entrepreneurship might be a newer movement, but it’s in response to a need that has always existed. 

“To be honest, we say this and we’re honest about it: The entrepreneurship spirit has always been there in low- to moderate-income neighborhoods, it just wasn’t called that,” he said. “Instead of being called ‘entrepreneurship,’ it was called ‘hustling.’” 

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