Microfinance group Community Investment Collaborative launches first class of entrepreneurs

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Darden graduate and businessman Toan Nguyen is one of several local residents giving entrepreneurs a leg up through the Community Investment Collaborative, an organization offering education and microloans to small business owners. (Photo by Ashley Twiggs)

Toan Nguyen has seen a lot of good business plans fail.

As a student at UVA’s Darden School of Business and as an entrepreneur, he’s heard plenty of sound pitches. “But the brick wall that everybody runs into is money,” he said. “It’s always the money.”

Now, as the chair of an organization offering business education and microfinancing to the owners of small start-ups, he’s hoping to tip the scales in favor of local entrepreneurs by arming them with knowledge and helping them get past the catch-22 of needing funds before qualifying for loans.

The Community Investment Collaborative took shape last year during regular meetings at C’ville Coffee, the Harris Street business Nguyen co-founded 12 years ago. About three dozen people gathered weekly to hash out their ideas about what Charlottesville’s would-be small business owners needed to succeed—especially in underserved and minority neighborhoods. Some were already tackling the problem through initiatives like the Piedmont Housing Alliance and the Orange Dot Project, which aims to alleviate poverty by increasing self-sufficiency. They were entrepreneurs, nonprofit leaders, Darden graduates. Some, like Nguyen, were all of the above.

By late 2011, CIC had a staffer and a board of six, including Nguyen, local Web businessman Gordon Bennett, and Center for Nonprofit Excellence founder Wendy Brown. And they had a game plan.

To turn ideas into businesses, people need access to start-up loans, Nguyen said, but the group recognized that they also need solid training and a support network. CIC is poised to offer all three to its first group of entrepreneurs, who begin a three-and-a-half-month training course this week. At the same time, the group is planning a community-wide coming out, of sorts, by joining in a series of talks on grassroots innovation in the weeks leading up to the Tom Tom Founder’s Festival May 11 and 12.

Their guiding principal, said Nguyen, is an extension of the old Chinese proverb: Teach a man to fish, and you feed him for a lifetime. “What this does is not only teach a man how to fish, but fund the buying of that fishing pole,” he said.

CIC’s first class of trainees includes 23 residents from Charlottesville and the surrounding counties, said CIC Program Director Hebah Fisher, who studied microfinance at Darden. Some are established business owners who want to take their project to the next level, she said. Others have only a concept and a desire to will it into reality.

To make the cut, “you had to have a very clear idea of what you wanted,” Fisher said. “And the other criteria was that we wanted the passion and commitment of someone who could put in the hours.” Business ideas include a handyman co-op, an alternative taxi company for low-income and handicapped city residents, and a fresh juice cart. And like the group that’s shepherding them into the business community, they’re looking beyond the bottom line.

“One of the most beautiful things about the entrepreneurs in this first class is when you ask them to share their business ideas, they’re not just saying, ‘I want to start a barber salon,’ or ‘I want to start a soul food catering business,’” said Fisher. “They talk about this vision of the community they want to live in, and how their business fits into that picture.”

CIC negotiated a partnership with the New York-based Workshop in Business Opportunities to use the nonprofit’s acclaimed curriculum, created in the ’60s to give entrepreneurs in Harlem a fast-paced but comprehensive small-business education. Guiding students through WIBO’s chapters, which detail everything from consumer targeting and cost structure to ethics and the law, is a team of volunteer instructors—successful business owners, marketing strategists, members of the UVA community, and others, who will lead classes held at CitySpace, the Downtown meeting venue the city offered to CIC for free.

The students pay at least a small sum to help cover the cost of the WIBO workbooks, though virtually all of them will get financial assistance, said Nguyen. When the course is done, they’ll keep meeting regularly with their fellow start-up students and with business mentors. The guidance and networking are key, said Fisher, but so is the companionship.

“Entrepreneurship is a really lonely pathway, and you need your friends there with you,” she said.

Kathryn Sharpe, assistant professor of business administration at Darden, will dispatch 70 students from her market research class to guide the CIC entrepreneurs. When she’s overseen similar collaborations in recent years, she said, everyone has benefitted. Business owners get the dignity of the focused attention of their own team of advisors, and her students gain confidence and real-world experience.

“It’s been empowering for them to see projects through from start to finish,” Sharpe said.

When CIC’s crop of students completes the course, they can apply for incremental loans of $5,000, $10,000, and finally $35,000, which will be approved by a loan committee and administered by CIC. The group is still drumming up the support needed to offer the loans, but Nguyen said they’re confident the business models they’re fostering will speak for themselves and draw local investors.

With each infusion of capital, CIC will help its members build credit. Ultimately, they’ll be able to turn to banks for bigger loans, he said.
That’s good news for everybody, said Glenn Rust, president of Charlottesville’s Virginia National Bank. His is one of several local banks working with CIC and preparing to receive its first crop of loan applicants.

Rust admitted it’s tougher than ever for start-up operations to get those crucial first loans of a few thousand dollars. New small businesses usually don’t have a solid enough track record to make the loan worth the administrative effort required on the bank’s side, he said, “but $35,000 is a big enough amount to grab people’s attention, and an amount some banks can tolerate some risk on.”

The whole community will ultimately reap the benefits of a corps of savvy, well-prepared business owners, said Rust.

“You get several small businesses going that truly meet a need, and those small businesses begin to employ three, seven, 12 people—that’s the economic engine of every town,” he said.

Nguyen and his colleagues know boosting the local economy by empowering business owners is not something one group can do alone. They wouldn’t have come as far as they have if not for the support of other individuals and organizations, he said. Going forward, he wants CIC to kickstart even more partnerships, and offer inspiration to others.

“That’s the power,” he said. “It’s hope. Without that, it’s hard to move forward.”

 

Talking Tom Tom: “When people think of innovation, they think of biotech and IT,” Nguyen said. “But we want to look at innovation from the ground up.” Join in Wednesday night panel discussions on innovaiton in business and design with CIC founders and others as part of the Tom Tom Founders Festival starting April 18. For more info, visit www.tomtomfest.com.

 

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