Getting money to grow may be about to become easier for inner-city businesses. The Inner City Economic Forum on June 1 will bring together 30 to 40 inner-city businesses and private equity managers who are looking for investment opportunities. Sponsored by Bank of America, the Forum’s Inner City Capital Connections 2006 will give business owners from New York, New Jersey, Connecticut, Pennsylvania, Maryland, Massachusetts and Rhode Island a crash course on how to plan and implement strategies to expand their enterprises. The event will take place at the Westin Times Square Hotel in New York City.
“In a good relationship investors play the role of mentors, coaches and advisers. [At the conference] investors get to see the sound foundation of these businesses first hand, the potential for growth and the good return on their investment,” says Majari Raman, senior vice president for the Initiative for a Competitive Inner City (www.icic.org ), a strategic partner of the Economic Forum and director of the Forum itself.
The Initiative is a not-for-profit organization founded by Harvard Business School professor Michael E. Porter in 1994 to promote economic prosperity in inner cities. It publishes the “Inner City 100,” a list of the fastest-growing inner-city businesses nationwide. To be on the list, a business must be an independent for-profit corporation, partnership, or proprietorship; be headquartered in or have 51 percent or more of its physical operations in an economically distressed inner-city area; have at least 10 employees; have a five-year operating sales history that includes at least six months of sales in the first year of consideration, an increase in year-five sales over year-four sales and fifth-year sales of at least $1million.
In addition to matchmaking between entrepreneurs and investors, the day-long June conference will offer discussions on building relationships between entrepreneurs and investors and networking opportunities. A pre-event coaching session, “Getting Ready for Equity,” will take place May 18 at Columbia Business School, part of Columbia University.
Inner-city businesses are key contributors to a city’s regional and urban competitiveness, Raman notes. “These businesses are an accelerator for other businesses and they are a vibrant part of the community as they hire local workers from entry-level to managerial positions,” she says. However, the business owners are too busy running their businesses to reach out to private investors, she adds. “Private equity tends to work in networking relationships, and many business owners don’t have the time or access to network with investors. This type of event offers great opportunities for both.”
The New York conference will be the second of the ICCC series that began in Los Angeles in October 2005 and which will culminate in Miami in December. The conference moves from city to city as a result of recommendations from focus groups with entrepreneurs and investors, Raman says. The focus groups not only uncovered obstacles entrepreneurs face in meeting investors, but also revealed that investors are willing to invest in businesses in their own region but had difficulty finding candidates, she says. While Forum plans to host other events throughout the country to facilitate entrepreneur-investor meetings at the local and regional levels, “we don’t discourage entrepreneurs from reaching out to investors who are not in their region,” she adds.
Inner-city businesses can grow to 100,000 times their current capacity and in many cases employ more than 500 people, Raman argues. “[They] are not only employers within their own communities, but they are also role models within that same community where they become business leaders,” she says.
By Inés Bebea