Narrowing the Gap:Invest in Diverse Entrepreneurs

Presented by Yvonne Cheung Ho, MEDA

Diverse communities in the Twin Cities

face stark economic disparities

Entrepreneurship is One Solution

o “A critical ingredient in attaining financial security is business development; business equity is second only to homeownership as a share of total household wealth nationally… business creation has often been a route into America's middle class, particularly for minorities, immigrants, and the economically disadvantaged.”(Corporation for Economic Development, Washington D.C.)

Status of Diverse Businesseso Forbes list of “Best Cities for Minority Entrepreneurs”

ranked the Twin Cities 49th of 52 large metro areas

o 16.9% of Minnesotans are people of color. By 2035, 1 of every 4 Minnesotans will be a person of color (Minnesota State Demographer, 2009)

o Entrepreneurs of color own only 6.3% of MN firms and only 3.8% have employees (2007 Survey of Business Owners)

o Self-employment rates among people of color are 53.1% lower than among white males (The State of Minority and Women-Owned Business Enterprise: Evidence from Minneapolis, 2010)

Access Challenges

o Working Capital: Diverse firm loan requests are substantially more likely to be denied and, if credit is granted, it is at higher interest rates, even after accounting for differences like size and credit history (The State of Minority and Women-Owned Business Enterprise: Evidence from Minneapolis, 2010)

o Equity: In 2009, less than 4% of SBIC financing was awarded to diverse businesses (U.S. SBA)

o Technical Assistance: Demand outstrips availability of services

o Markets: Corporate supply chain consolidation has led to fewer opportunities for diverse vendors to grow their companies

MEDA’s Portfolio of Serviceso 1-on-1 business consulting

o Strategic Business Consulting

o Certification Assistanceo Pacesetter Programo Volunteer / Mentor

Program

o Relationship building between minority clients and larger corporations & access to government market

o Procurement Technical Assistance Center (PTAC)

o Construction Partnering Program (CPP)

o Lending & Financingo MEDA Loan

Program / UIP Partner

o Training & Leadership Development

o Executive Development Series

o Leadership Development Program

o Customized training

o www.meda.net

Economic Return on Investment

Brooklyn Park 8 jobs

Eagan75 jobs

New Hope45 jobs

o Successful Diverse Businesses:o Create jobso Expand our tax baseo Improve and stabilize

communitieso Become business leaders o Inspire others as role models

2010 Annual Survey190 Responding Companies

o Each year, MEDA surveys the diverse businesses it serves

o Over the 16 years of the survey, covering 4 to 7,000 workers each year, over 50% are people of color

o In the 2010 survey, 89% of employees were paid a living wage of $14 or more per hour

o 62% of companies provide health care benefits –national average is 54%

ExampleExampleCowles Center for Dance & Performing ArtsCowles Center for Dance & Performing Arts

(Construction)(Construction)

Typical City Goal

Project Goal Results

MBE Participation

10% 10% 10.6%

Skilled MinorityWorkers

11% 15%

17.3%

Unskilled Minority Workers

11% 15%

16.4%

Example: Shelleye and Tony WilliamsonAJASA TECHNOLOGIES(IT Consulting & Staffing)

o Early ‘90s: began the business in their basement

o A MEDA client from 1995 to presento Revenue growth from $3.5 million in

1999 to over $34 million o 200 employees/contractorso MEDA’s 2008 Entrepreneur of the

Yearo Tony now serves on the MEDA Boardo Give back to the community,

including mentoring other entrepreneurs

Help us narrow the disparity gap:

Invest in Diverse Entrepreneurs