CONNECTIONS THAT COUNT Accelerating small business growth and access to capital
Only 50% of small businesses use social media although 80% of online visitors use social media daily
2010
2013 ICCC PARTICIPANTS CREATE
PROGRAM EXCEEDS 250 UNIQUE PARTICIPANTS
added marketing & sales component
2011
ICCC PARTICIPANTS EXCEED
7,500 NEW JOBS
2012
10,000 NEW JOBS
ICCC EXCEEDS
500
PARTICIPANTS
OVER 1 BILLION IN CAPITAL RAISED
THE GROWTH OF ICCC IMPACT REPORT 2014
CONTENTS 01 Introduction 02 Capital Sparks Growth 04 Knowledge Begets Power 06 Beyond Dollars A look at ICCC’s impact on communities and business 08 Applied Learning in Action 10 The Community Connection 11 Perfecting the Pitch 12 ICCC Mentorship: from Conversation to Milestones 13 Impact Beyond the Inner City
2014
Since 2005, ICCC participants have raised $1.22 BILLION in capital for their companies and created 10,729 JOBS in their communities.
INTRODUCTION Lots of seminars claim to be transformational. This experience truly transforms and inspires. Find a way to participate. It will change your business and could change your life! The curriculum is intense. The numbers-driven professors are outstanding. My only regret is that this wasn’t around 30 years ago. If it had been, both my business and I would have grown much faster! Paul A. Camp, Chief Evangelist Officer, Content that Works
Business owners who base their companies in the inner city know that they are investing in more than a business—they invest in community. When businesses grow, jobs are created, communities are expanded, and wealth can be cultivated for generations to come. The goal of the Inner City Capital Connections (ICCC) Program is to help propel companies toward their next phase of growth so that they may increase inner city vitality. As part of the Initiative for a Competitive Inner City, ICCC helps small businesses in economically distressed areas access capital, achieve sustainable growth, and connect with debt and equity providers. Seminars, led by top-tier professors from leading entrepreneurship institutions, cover a range of practical skills— from talent management and entrepreneurial finance to strategy and investor pitch presenta-
tions. Through intensive coaching sessions, small business owners connect with high-profile capital investors in an exclusive portfolio made available through our partners. Our annual conference at FORTUNE Magazine in New York City is the culminating event, where program participants put learning into practice and can market and pitch their businesses. This year’s Impact Report highlights outstanding alumni who have channeled their program learning into exponential growth in 2014, whether through capital infusion or transformative changes that have better positioned their business for future growth.
The ICCC program offers executive education, coaching and pitching sessions with capital providers, and a national conference.
ICCC IMPACT REPORT 2014
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HDM SYSTEMS
Capital Sparks Growth We were denied by about 30 banks... After we went through the program, we went to five banks, and we had three commitments for lines of credit. So the turnaround was just staggering. ICCC trained us on what to do, what to say, what to have at our fingerJanet Sloan, President, Seville Staffing tips when we went to commercial banks.
AILEEN LIU, CEO Industry: Energy Year founded: 1995 Revenue growth since ICCC: 41%
Meet Janet Sloan! http://bit.ly/1GJdbL3
With a background in automotive chemistry, Aileen Liu is a perspicacious innovator who has a pulse on the future demand of her industry. She saw an opportunity to improve power electronics with clean technology and founded HDM Systems, a power solutions firm that designs and manufactures battery-based mobile and renewable energy applications. HDM Systems’ meticulously tested products revolutionize power through emissions-reducing hybrid systems that function independently from grid power, making them uniquely able to adapt to extreme conditions and ideal for military and remote areas. As such, Aileen saw that HDM Systems was poised for growth and moved to expand her products, beyond major trucking companies and the automotive industry, into the military sector. To find more sources for funding, Aileen came to ICCC and, after participating in the program, was able to procure a significant loan to propel her expansion. With community and global expansion at the forefront of their growth, Aileen’s daughter, LeeAnn joined the company in 2010. HDM Systems is now able to answer some of the
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ICCC IMPACT REPORT 2014
One of HDM System’s products, the inverter/charger combination reduces battery charge time and allows power sources to shift seamlessly between batteries and shore power.
growing needs of the military and the automotive industry. The key to its success, in addition to a keen focus on research and development, is this mother-daughter team—driving changes at the wheel in male-dominated industries. Local communities benefit from the fact that HDM manufactures everything in the United States, while communities in developing nations and areas prone to natural disaster can anticipate future collaboration with HDM Systems as well. With plans to apply HDM technologies to aid in disaster relief and powering cell phone towers in developing countries, Aileen says, “Every step, we capture opportunity and ALWAYS customer service.”
Another firm that counts excellent customer service among its pillars for success is Commonground. Coupled with their ability to create compelling content that is customized to their clients’ needs, this Chicago based advertising agency experienced growth on completely new grounds following their participation in the ICCC program. Co-founder and owner Sherman Wright recognizes the program’s alignment with his interests in “continuing education as a business owner and networking.” He explains, “I saw the [ICCC] participants, the instructors, and the fundamental purpose to help minority-based programs access capital...
Commonground’s latest first print ad for Primaloft
Even for a two day session, the contacts I made and relationships I made were very beneficial.” After experiencing ICCC in 2013, Sherman’s company secured a loan and reached an unprecedented level of record growth. Commonground increased their Chicago employee base from 80 to 150, and then expanded to New York where they started with five employees and grew to fifty within four months. Less than a year later, Commonground has a new presence in Los Angeles. Now, not only do they aim to continue their growth trajectory by expanding regionally, they are also looking to take their business global.
COMMONGROUND
SHERMAN WRIGHT, CO-FOUNDER & MANAGING PARTNER Industry: Media & Publishing Year founded: 2004 Employee Growth since ICCC: 54%
Commonground creates design for clients across multi-platforms including digital, print, and TV. ICCC IMPACT REPORT 2014
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Smedberg Machine Corporation
Kenneth Smedberg, President Industry: Manufacturing Year founded: 1942 Revenue growth since ICCC: 16%
Xtra 21 Express Trucking
Braylon Lester, President Industry: Transportation Year founded: 2005 Revenue growth since ICCC: 23%
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ICCC IMPACT REPORT 2014
Knowledge Begets Power It’s like an MBA on steroids.
Frances Guichard, Co-owner, Gallery Guichard
Family-owned businesses tend to rely on resiliency to sustain their business for the next generation. This is a challenging, if optimistic, approach. For executives to sustainably grow their business, they must be able to weather an ever-changing market. Two standout executives in this position are Kenneth Smedberg, President of Smedberg Machine Co. and Braylon Lester, President of Xtra 21 Express Trucking, exemplary third generation CEOs who are preserving their family legacy and impelling its growth into the 21st Century. Kenneth and Braylon were same-year participants who came to ICCC to learn how to efficiently run their businesses and respond to current economic demands. On his experience with ICCC, Kenneth recalls, “We got the highest level of education there that you can get—that most people can’t afford to get… We are speaking with a level of intelligence that banks can appreciate. Knowledge is power.” At one time, Kenneth could only get loans from banks that had known the family since 1952; whereas after ICCC, he benefitted from fruitful negotiations that enabled him to secure the capital he needed to modernize his facilities, take on new contracts, and obtain specialized industry-specific training for his staff.
Braylon attended the ICCC program “wanting to get more knowledge” and ended up finetuning his growth strategy, increasing his financial know-how, and securing a loan. Xtra 21 Express Trucking has since been listed as one of the fastest growing companies based in the inner city. He admits, “I didn’t think I would learn what I did: how to value my business, how to explain that value to a customer, and overall different sources of revenue…I was really looking for knowledge and got more than I was looking for.” This is also true for non-family-owned businesses.
Smedberg Machine Co. employee with hydraulic cushion
Since founding Sandstorm Design at age 24, Sandy Marisco had grown her Chicago-based firm from a one-woman office to a twentyperson operation with more than half of her employees residing in distressed areas. Sandstorm was ready for growth, but Sandy, the daughter of an entrepreneur, had surpassed what her father and MBA offered her. Looking to the ICCC program, Sandy praises her experience as “outstanding and some of the best
training that I have ever received. The program transformed how I looked at valuation, and thus brought about new goals to build equity.” Sandstorm’s revenue has increased 16-fold over the years and is positioned to take on additional business and increase their employee base. Sandstorm projects an increase of fifty full-time employees and $10 million in revenue in the next five years.
SANDSTORM DESIGN
Sandy Marisco, CEO & Principal Industry: Media & Publishing Year founded: 1998 Employee Growth since ICCC: 23%
Sandstorm’s digital and print marketing campaigns for CCIM Institute Sandstorm has been named Top Interactive agency in Chicago by Crain’s B2B Magazine.
ICCC IMPACT REPORT 2014
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BEYOND DOLLARS
A look at ICCC’s impact on communities and businesses
THE REACH
THE BUSINESSES 50% of participants have
189 CITIES 39 STATES
54% of employees are from
been in business for 11+ years
an Inner City
71% of Jobs have salaries
41% of Businesses have
over $40k
11+ Employees
23% of businesses have
revenue $5M of more
Total Participants
677
BY INDUSTRY
4%
3.9%
Transportation & Logistics
5.2%
Media & Publishing
6.1%
Wholesale Trade
Other
17.2%
Business Services
10.4%
Manufacturing
THE PARTICIPANTS
10.4%
11.7%
IT & Telecommunications
Construction
4.7%
74%
MINORITY-OWNED
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ICCC IMPACT REPORT 2014
41%
master’s degree or higher
32%
WOMEN-OWNED
10.1%
Health Care
8.6%
Food & Beverage
4.9%
2.8%
Energy
Finance, Insurance & Real Estate
Consumer Goods & Services
RESULTS AFTER ICCC CAPITAL RAISED:
$1.22 Billion EQUITY: $371 Million DEBT: $853 Million OF THOSE WHO RAISED DEBT
71%
RAISED IT IN LESS THAN 1 YEAR AFTER ICCC PROGRAM
JOBS CREATED TOTAL: 10,930 DIRECT: 10,729 INDIRECT: 98 INDUCED: 103
80%
28%
PROJECTED CAGR FOR 2012-2014:
OF THOSE WHO RAISED EQUITY
82%
RAISED IT IN LESS THAN 1 YEAR AFTER ICCC PROGRAM
ICCC MANAGEMENT EDUCATION HELPED 2013 PARTICIPANTS TO:
91% Address business needs 56% Enhance business plan 22% Enhance workforce 16% INCREASE REVENUE 47% POSITION FOR CAPITAL 7% TAKE ANOTHER ACTION
OF PARTICIPANTS PLAN TO HIRE IN 2015
ICCC IMPACT REPORT 2014
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AVPOL
Applied Learning in Action There is just no price I can put on this.
Lisa Brazelton, CEO, Total Coordination Professionals
BUSINESS GROWTH CYCLE
EXIT MATURATION
Sandra Walls, CEO Industry: Transportation and Logistics Year founded: 1997 Revenue growth since ICCC: 43% Employee Growth since ICCC: 233%
EXPANSION SUSTAINABILITY GROWTH START-UP IDEA GENERATION
Sandra was featured in Black Enterprise, praising the “Art of the Turnaround” and Sandra’s work building AVPOL from a small petroleum company into a million-dollar logistics business.
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ICCC IMPACT REPORT 2014
Sandra Walls, CEO of AVPOL, had served in the Air Force for 22 years working in logistics when she realized that the opportunities for women in this field were dismal. Her solution? Sandra created AVPOL, a competitive acquisition management and logistics firm. AVPOL experienced rapid growth, but its biggest challenge over the years was a need for capital infusion. “I was tired of hearing no,” Sandra said. It was at this juncture that she participated in the ICCC program with hopes of positioning her business for capital. After participating in ICCC, she procured a substantial loan that enabled her to hire key senior personnel and further expand her business. Acknowledging the role of ICCC in helping AVPOL “to do more,” Sandra’s
No matter the industry all small businesses experience similar growth stages. ICCC helps firms in the growth-to-exit stage overcome obstacles to reach their respective goals. The following firms experienced different challenges from the need for capital to restructuring growth strategies, but the results after ICCC were the same.
new plan is to increase revenue by $100 Million in the next five years. Part of Sandra’s vision for doing more is her commitment to her community. She believes firmly in the marriage of healthy investment in both her company and her employees, among whom 35% are residents of distressed areas. Additionally, Sandra plays a key role in improving her community by actively buying real estate in distressed areas. This is exemplary of the positive multiplying effects that ICCC can have not only on a participant firm’s business but also on its community. Like Sandra Walls, ICCC program participants leave with a clearer vision for future growth and a concise blueprint on how to get there.
Learning about company valuations and really understanding how to keep margins strong was really important... I did make a lot of successful contacts in terms of potential for finding funding…[ICCC] was very, very valuable from an educational perspective.
THE SHRED AUTHORITY
Caroline Wilhelm, Founder & CEO, prairie states enterprises, inc.
A Shred Authority employee hard at work
Ken Williams, president and owner of The Shred Authority, attributes much of his growth to ICCC. Ken began his company in 2005 and by 2013 had nearly doubled his revenue. He remembers how attending the ICCC program transformed his business and reframed his perspective on his growth strategy. “That’s when I had an ‘ah-ha’ moment. We needed to look at how we could actually restructure our debt loans, and [ICCC] helped me to do that.” Despite attending the seminar with the expectation of gaining general education, he instead came away with an improved business strategy and restructured business model that increased his profit and reduced his debt. Mother-daughter duo Felicia and Caroline Wilhelm shared a similar experience. Curiosity and a desire for increased funding brought this woman-owned enterprise to ICCC, but they walked away with more practical knowledge than they’d bargained for.
Before starting her company of 25 years, Prairie States Insurance Agency Inc., Felicia Wilhelm practiced as a registered nurse at an inner city Chicago hospital. It was this specialized experience that sparked her interest in health and wellness and ultimately led her to explore the world of third-party insurance administration. Felicia explains, “At the time I felt, as a nurse with degree from Vanderbilt, that there had to be a better way to deliver healthcare.” That way was Prairie States, now a nimble technology driven company that provides comprehensive employee health benefit plan administration and clinically oriented health enhancement services for self-insured organizations. Caroline Wilhelm joined the venture in 2012 to build marketing and sales efforts in order to allow for expansion into other regions. Felicia continues to look towards enhancing her business: “Even though Prairie States is 25 years old, we always think there’s more to do to make ourselves stronger and better.” Today, Prairie States boasts a revenue of over $7 million and employs over 60 full-time personnel.
Ken Williams, President and Owner Industry: Business Services Year founded: 2005 Revenue Growth since ICCC: 9%
Prairie States Insurance Agency, Inc.
Felicia Wilhelm, Founder & CEO Industry: Business Services Year founded: 1989 Revenue Growth since ICCC: 13%
ICCC IMPACT REPORT 2014
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OLU’S HOME, INC.
The Community Connection Joining ICCC was a really important aspect to TerraCycle and its growth, partly because we are an inner city company and there aren’t that many of us out here. Tom Szaky, CEO, TerraCycle, Inc.
Gloria Freeman, CEO Industry: Healthcare Year founded: 1999 Revenue Growth since ICCC: 36%
TerraCycle’s testimonial http://bit.ly/1tVqsJF
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ICCC IMPACT REPORT 2014
Dr. Nawab Baloch, CEO of Clinical Trial Network (CTN) in Houston, Texas, shares: “Being a part of something that brings changes and gratification to other people in your lifetime is the main reason we do this.” Beyond increasing revenue, CTN holds to a mission of “helping the common man and increasing health and wellness,” according to Nawab. Through ICCC, business owners are able to network with one another while sharing their visions and ideas for innovating both company and community growth. Another such community advocate is Gloria Freeman, CEO of Olu’s Home, Inc (OHI). Olu’s Home Inc. provides support services for the mentally ill and developmentally disabled in a segment of the healthcare industry that is dominated by large corporations and owned mostly by men. Servicing inner city populations, Olu’s Home Inc. has seen mounting growth over the past fifteen years.
After ICCC, Gloria was successful in securing loans to accommodate her growth. She says, “I don’t think I would have been able to receive this information from any other place. This experience has enriched my life and business, and my coach was extremely helpful.” Today, Gloria continues to enrich her community. She will be expanding her operations to include an intergenerational day center for individuals who require assisted care. Gloria expects to grow her staff by at least 30 employees in order to accommodate the new service and anticipates a 1.2 million increase in revenue by 2015.
Gloria Freeman’s new intergenerational day center will add at least 30 new staff members in 2015.
Perfecting the Pitch ICCC brings together a host of dynamic professionals who understand the market and can forward us to meet our goals and objectives in an entrepreneurial way. Van Vincent, President and CEO, VLV Development
for improvement but also highlight a firm’s strengths in order to enhance its growth strategy. Sheri Neely of the Neely Agency recalls: “The coaching session was very empowering and enlightening. It helped me to prioritize.”
Mimoco markets designer USB flash drives at the ICCC Inner City Marketplace
Connecting CEOs with their peers and experts is an integral component of the ICCC program experience. By bringing together participants and coaches, ICCC creates a community forum for continued dialogue and fosters like-minded collaboration at the same time that it facilitates rich mentorship from seasoned practitioners. Executive coaching is, for some of our participants, a new kind of professional development experience. Participants are matched with coaches that not only bring awareness to areas
By utilizing an experienced and effective sounding board, businesses can easily streamline their pitches for more productive meetings with capital providers. When a firm has an effective pitch, they are better equipped to access capital and experience growth. Janet Sloan, CEO of Seville Staffing confirms, “We needed to be more focused and clear in our pitch. [ICCC] really gave us a chance to hone our skills and because of that, it worked. It sharpened our communication with banks and gave us access to sources that we would not have met otherwise.” It is this kind of collaboration that ICCC espouses in the small business community.
At the ICCC National Conference, program participants are matched with expert capital providers for personalized advice on ways to improve their business pitches.
ICCC IMPACT REPORT 2014
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ICCC MENTORSHIP: FROM CONVERSATION TO MILESTONES ICCC’s wide portfolio of experienced capital providers offers intensive coaching sessions to enhance the growth trajectories of our participant companies.
“Great information overall to ensure our growth & expansion.” Jorge Fierro, Owner & President “We received valuable guidance for meeting business milestones that helped us secure capital.” Arnulfo Ventura, President
Small businesses are a significant driver of local economies. By strategically leveraging our philanthropy and the expertise of our employees, we can play an important role in equipping business owners with the knowledge and skills to expand their businesses, grow jobs and access the capital needed for long-term growth. Kerry Sullivan, President of the Bank of America Charitable Foundation
Rico Brand Salt Lake City, UT
Coba’ Los Angeles, CA
“Great environment in which to learn from those knowledgeable in the field.” Nadine Cino, CEO & Co-Founder
“Helped me to better our plan for growth.” Harry Clincy, President
Tyga-box New York, NY
ACU CONSTRUCTION Carrolton, TX
Thanks for making this opportunity available. I’d love to provide business coaching on a consistent and regular basis. Can the ICCC model be expanded into more markets to drive small business growth? If so, I’d be happy to get involved. Client Manager, Business Banking, Bank of America Merrill Lynch 12
ICCC IMPACT REPORT 2014
The opportunity to coach a rising CEO was very rewarding. It was a great opportunity to share my expertise, and I was overwhelmed by his gratitude and appreciation. We have another session planned, and I can’t wait. “Absolutely awesome! Very useful feedback.” Christy Valentine, President
Senior Client Manager, Business Banking, Bank of America Merrill Lynch
Valentine Medical Center New Orleans, LA COACH
COMPANY Participant
IMPACT BEYOND THE INNER CITY GET TO KNOW US BETTER
CONNECT WITH US! ICCC has grown immensely since our inception in 2005. Most remarkably in 2014, we have seen how one aspect of our program’s impact has taken flight: beyond facilitating access to capital, executive education, and professional development opportunities, ICCC has become an arbiter for continued dialogue on small business matters. From ICCC’s seminars and coaching sessions to the culminating networking conference, small business owners consistently demonstrate an unquenchable hunger for continued conversation. To that end, we invite you to join our virtual community with #smallbizsalon, a community thread to connect our network of partners, participants, and small business advocates. We are always thinking about ways to increase our reach and impact so that we can help as many small businesses to grow and access capital in as many cities as possible. Would you like to discuss ways ICCC can help grow your business and community? Email me at hvassell@icic.org. I look forward to connecting with you. Yours in growth,
Hyacinth Vassell, Program Director
innercitycapitalconnections @ICCC_ICIC iccapitalconnections www.iccapitalconnections.tumblr.com www.iccapitalconnections.org 617.238.3019
JOIN THE #ICCC #SMALLBIZ COMMUNITY
THANK YOU TO OUR FRIENDS AND SUPPORTERS WHO MADE THIS YEAR’S IMPACT POSSIBLE: Educational Training Professors Steven Rogers, Senior Lecturer of Business Administration, Harvard Business School Sonia Marciano, Clinical Professor of Management and Organizations, NYU Stern School of Management Derrick Collins, Dean for the College of Business, Chicago State University Michael E. Porter, Bishop William Lawrence University Professor, Harvard Business School Greg White, Adjunct Professor, Kellogg School of Management, Northwestern University and President & CEO, LEARN Charter School Network
ICIC’S MISSION IS TO DRIVE ECONOMIC PROSPERITY IN AMERICA’S INNER CITIES THROUGH PRIVATE SECTOR INVESTMENT TO CREATE JOBS, INCOME AND WEALTH FOR LOCAL RESIDENTS. ICIC.ORG
ICCC PARTICIPANTS CREATE
Exceeded 100 unique participants
2007 2006 25 company participants
2005
PROGRAM FOUNDED to introduce inner city business to equity organizations
PARTICIPANTS RAISED
$41M IN CAPITAL
Dow Jones Industrial Average gains .49%, first all-time high in more than 6 years
2,500
NEW JOBS TO DATE
Women are starting businesses at twice the rate of men and expanding businesses internationally
2008 34%
$118M
OF PARTICIPANTS ARE WOMEN-OWNED BUSINESSES
CAPITAL RAISED
Manufacturing, clean tech, and alternative energy industry participation increases
Stock Market crashes
2009
ICCC PARTICIPANTS CREATE OVER
5,000
NEW JOBS TO DATE
CURRICULUM CHANGES to incorporate strategy component and full spectrum of financial options