The Vault of Opportunity
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What Black Business Owners in Portland Don’t Know About The Money Earmarked Specifically for Them
By Fawn Aberson
If you’re a Black owned business in Portland, Oregon right now, there is an abundant amount of money and resources reserved specifically for you. Sounds like a joke? It’s actually true. If you fit this mold, the key to claiming these benefits lies in two specific skills, paying attention and navigating the system. Before we get to this, it may be helpful if we give some historical context to how this abundance came about.
In 2014 Prosper Portland@prosperportland ( then known as PDC) after nearly two years of planning and community input, unveiled their five year strategic plan to help guide the development of the city’s work plan and investments for 2015-2020. Within this plan they outlined five essential goals with third goal listed as follows:
“Increase equitable opportunities to foster wealth creation within communities of color and low-income neighborhoods.”
The plan also included language on how the strategy would put a laser focus on businesses located in Multnomah County and N/NE Portland in order to address the highest concentration of economic blight in communities of color. Like so many public investment strategies that can take years to come on deck, once the GO button is finally pushed, it can be tough to keep up with the flurry of cash that ultimately follows. For the “woke” entrepreneur of color, who is at the very least aware of the opportunities, it may feel a bit like standing in an enclosed wind tunnel with cash swirling all around while you frantically try to grab as much of it as you can. For the “unwoke”, by the time they realize there even is a tunnel all the cash has been shelled out having impacted a select few but leaving the many out in the cold.
The powers that be behind this strategic goal insist there is an effort underway to try to change this narrative so that instead of funds depleting, they multiply. Chris Harder who was the Economic Development Manager for PDC during the creation and launch of this plan prior to moving to his current position as Director of Business Oregon explained it in this way back in 2016 after the initiative had rolled out.
“We recognize that things have been going great, but for a lot of people it is not so great and they don’t feel like they are a part of this new growth dynamic that is occurring. We wanted a strategy that would change this and from the public sector perspective that meant honing in on how we do that for the underrepresented population.”
By “going great” he was referring in part to Oregon’s Gross Domestic Product (GDP)@ogdp which grew by 3.3 percent in 2016 according to the Bureau of Economic Analysis@bea. This was more than double the pace of national growth (1.5%) and the second-fastest among all states. Entering 2018 Oregon is still among the top performing states in the country.
It is now two years into the strategic plan’s launch and millions of public dollars have been invested around strategic goal number three particularly. These funds have primarily been funneled out to organizations selected for their culturally specific focused business training modules and lending practices. Early evidence is emerging that the needle of prosperity is moving for “communities of color.” Overall program effectiveness seems to be positive for women and minority owned businesses in general, but according to some of the service providers, benefit for Black owned businesses specifically is still not what it was hoped to be.
We decided it might be helpful to take a closer look at the organizations receiving funds to provide these services and the programs they are implementing to see if we could glean any insights on what might reverse this trend over the next three years. This meant first knowing who has the money and how to get in their prosperity pipeline.
The first program we examined is called the Increase Project@increase. Five to seven months in length, the program focuses on a suite of services wrapped around a small business owner to help them grow in scale and reach wealth creation opportunities. These are typically neighborhood small businesses with growth potential. This program is free for the selected candidates but it is a competitive application process. Once selected, you can expect to meet with other selected cohorts weekly gaining technical support with everything from finance and accounting to marketing and expansion. Upon completion of the training you get a small amount of cash and a pipeline for long term mentorship. This program is overseen by Tory Campbell, Entrepreneurship & Community Economic Development Manager at Prosper Portland and is currently contracted out to be implemented by Portland State University’s Business Opportunities Program (BOP).
The program was initially a spinoff of a program called Streetwise MBA which was birthed out of Boston University and implemented by an organization called Interise@interise, the initial group awarded City funds from 2015-2016. In their first year, Interise worked with 12 small businesses, four of which were African American owned; Champions Barbershop, Good Green Print, Hestmark Designs and Imagination Station Daycare Center. Overall each of these business owners shared with us that the training was helpful and would recommend it to their peers. Also, most of them were approached directly by Prosper Portland staff to apply.
Now in its second year under PSU, Project Increase recently selected 11 applicants from what they called a “very highly competitive process” and shared that only a few Black owned businesses applied and of those, only two were selected.
“One of our goals is to have more African American applicants for all of our business support programs. It is a core element of both Prosper Portland and the PSU BOP to support local entrepreneurs of color. We really want and need to get the word out about the programs and support we have available” Stated Gavin D'Avanther, Business Advisor, Business Outreach Program Portland State University. D’Avanther can be reached by emailing gavin.d@pdx.edu
As a Black owned business ourselves, Flossin Media found out about this program back in 2015 after the first round had already been selected. Although not necessarily promoted that effectively, we actually happened to discover its existence accidently when we started asking Prosper Portland what elements were being designed for the strategic plan three roll out. To our surprise, things were already in motion. The program was not to come back open for new participants until 2017. So we continued to watch the calendar, followed the variety and ever-changing key contacts, made regular phone calls and emails over the 2016/17 calendar year. Then in the fall of 2017 we finally heard back from D’Avanther that things would be moving forward and provided us with a link to submit our online application for consideration into the program. Victory! Or so we thought. We submitted our online application in November of 2017 and found ourselves among the rejected applicants in January of this year.
However, as a consolation prize we were rerouted into another PSU program, also supported by funds from Prosper Portland, called the Long term Business Support Program. This is a three year commitment to growing business through one on one mentorship and connecting to other networks of business services. We will keep you posted on our progress in upcoming issues and on our Flossin Media Facebook page
A second program we examined was the Small Business Technical Assistance Support Partnerships@sbtasppp. Prosper Portland invested about one million dollars into community based organization through a competitive round of request for proposals process. A variety of culturally specific business training organizations applied and finalists were selected and awarded funds in the summer 2017. The list of selected providers were, Asian Pacific American Network of Oregon, Hacienda CDC, Hispanic Metropolitan Chamber, Immigrant and Refugee Community Organization, Micro Enterprise Services of Oregon (MESO), Native American Youth and Family Center, Oregon Native American Chamber, Portland Incubator Experiment, Portland State University Business Outreach Program, TiE Oregon, Xxcelerate Fund.
Black business specific serving funds were actually pulled from this funding pool in an unusual move by Prosper Portland after reviewing 16 initial proposals from culturally specific organizations specializing in African American outreach and engagement, including Soul District Business Association and the Urban League of Portland. Despite this embarrassing debacle on Prosper Portland’s part, the RFP process was reopened and in the end, Microenterprise Services of Oregon (MESO)@meso who had not submitted in the first round under the African American Specific category was awarded the contract, there second under the STARS funding cycle. They will serve as the N/NE Business Navigator to cultivate relationships with business owners or aspiring business owners of color, provide culturally specific support and provide connections to resources and opportunities for those businesses to thrive. Nita Shah, executive director of MESO, said, “MESO will provide entrepreneurs in N/NE Portland with business services such as planning, credit and access to capital, market research, and resources and referrals for your small business.” Meso has also been funded by Prosper Portland to give out micro-loans and lines of credit.
We met with Shah to inquire as to their plan on how they would reach out to Black owned businesses to let them know about their services. She shared no specific strategy and chose to concentrate on what they were providing rather than how they would get the word out. For more information about MESO’s resources you can contact Felicia Wells-Thomas, Business Navigator at 503-841-3351.
A third and final program we examined, receiving funding for Strategic goal #3 is called the Inclusive Startup Fund @isfpp. Here is where some of the bigger bucks for businesses of color come into play. The fund provides early-stage investment capital and mentoring to local high-growth companies founded by underrepresented groups across a variety of industries. The fund is run by Elevate Capital, a Venture Capital firm who was awarded through a competitive RFP process back in 2015. According to Nitin Rai, Elevate’s Director, they took on two challenges- Raising money for a fund intended to elevate minority entrepreneurship in a post-Trump regime, and finding minority owned companies with the potential to grow to the scale of 2,000-5,000 times their current financial status.
Examining the first of these two challenges, Elevate received 1.5 million in initial public money to launch their fund with the intent that they would raise an equal match and start lending once they had secured the three million. This didn’t quite go as planned. Rai explained,
“It has been very challenging to get money from private investors who in general don’t seem to be excited about funding minority enterprises. We thought we would get an influx of Latinos and African Americans who would want to invest, but we didn’t get that. It has been very disappointing and surprising. Despite this, we are fortunate enough to have the support, both financial and influential, of two wonder African American female leaders, Ruykaiyah Adams of the Meyer Memorial Trust, and Commissioner Loretta Smith from Multnomah County.”
Regardless, Rai and his staff have recently made their funding goal and actually were able to make investments while raising money. “We were building the bicycle while riding it.” Joked Rai.
To date they have funded 14 companies, 12 which are in the Portland Metro and two outside of the market. (Prosper Portland gave a little leeway to invest in African American entrepreneurs outside of the state as long as these companies promised to do business in Portland.) The average fund amount was between $25-75,000 with an opportunity to access an additional $250,000 in future funding rounds. Of the 14 companies, 4 have been Black owned including; Bendoor -a software analytics company, Red Rezi- a data analysis firm, Hue Noir a beauty line for Black women and Chelsea a line of jewelry for African American women. Elevate’s website@elevate also lists GlobeSherpa, developer of the TriMet ticketing app. Rai was a lead investor in this Black owned company started by Michael Gray. It was acquired by Daimler and now it is called Moovel, a division of German automaker Daimler. Moovel also owns Car2Go and mytaxi.
The second challenge of Elevate’s challenges is in identifying more minority businesses who are actually prepared to grow to scale in the thousandth. Black owned businesses in particular have been hard to identify.
“Some businesses come in with the expectation that they can get this money and although they are good businesses, they are not necessarily scalable (2-5,000 in returns). Instead of rejecting them, we refer them to our TiE xxcelerate program run by TiE Oregon ( www.oregon.tie.org). This way they can better prepare for what elements investors are looking for when they consider funding a company.” Explains Rai.
Also, Rai and his team are committed to finding more minority owned businesses but do know that regarding Black business outreach, they need to become more thoughtful. To assist with this they have recently hired Chevonne James as their Community Liaison. (chevonne.james@oregon.tie.org). James herself is a graduate of the TiE program and entrepreneur.
“We are beginning to develop a good pipeline of companies that have a really good shot at growing their business and create wealth, which is why we were established. We want to be intentional about investing in certain communities because when we are, they come out in droves proving that our thesis is both meaningful and correct.” Concludes Rai.
With three years remaining on the focus of strategic goal #3, and with a new strategic plan for 2020-2025 almost certainly beginning to take form, it is important now, more than ever for Black businesses owners to get into the flow of the pipelines of prosperity. The examples we shared here today are great places to start but certainly not all that is out there. The one thing that is certain is if you want to create wealth for and through your business, the time to start is now.
With three years remaining on the focus of strategic goal #3, and with a new strategic plan for 2020-2025 almost certainly beginning to take form, it is important now, more than ever for Black businesses owners to get into the flow of the pipelines of prosperity. Like us, you may discover there are a lot of dead ends in the process so we caution you to stay diligent and wake up. Pushing through the barriers and gatekeepers is key to claiming the wealth that has always belonged to you.
