Inner city businesses receive far less funding
A business’s fight for financing can be a vicious one seeing as it is one of many seeking help. It takes a lot to get an investor to hear your story, believe in your business and part with their money in the belief that your business will provide a high return on investment and then some. When entrepreneurs with a similar concept are competing for those dollars as well, or other factors impede a company’s ability to receive financing, the fight becomes even more difficult.
Inner city businesses receive approximately 20-50 percent less funding than businesses that operate outside of the downtown area. This inequality in funding puts inner city businesses at a disadvantage because the limited funding stunts the company’s ability to grow at the pace it’s capable of, as well as that of the pace of competitor companies that have secured sufficient funding. To combat the lower financing success rate of inner city businesses, Inner City Capital Connections helps “stimulate the flow of capital” to entrepreneurs struggling to raise capital. The program is free, sponsored by Bank of America and has raised more than $703 million since 2005.
Inner city businesses in program are also mentored
Businesses that enter the program are educated on available financing options and equity. The program also mentors entrepreneurs by helping strengthen business growth plans and setting up consultations with investors and consultants. Business owners are also taught how to accurately valuate their companies and learn from investors what makes for a strong pitch that will result in rewarded funds. These elements are all taught within a one-day course; after the course has ended, business owners are put in front of investors in a setup akin to a night of speed dating: sit down, tell your corporate vision, story and plan, and move on to the next investor.
Business owners who soak in all of the information given during the day session will be well-prepared when it’s time to step in front of investors. The program works to help inner city business owners put their best foot forward, and get them in front of entities that they may have never had access to without the program. In order to successfully raise capital, the spokesperson needs to be able to confidently articulate why this funding is necessary and how it will positively impact the growth of the surrounding area. The inner city is often a historic, integral part to an area’s identity, therefore there are investors out there that value this and are willing to offer assistance to businesses in these spaces.