◼ ECONOMICS Bloomberg Businessweek June 29, 2020
31entrepreneurshipeducationshouldfocusona
widerrangeofpathsforstartinga business,includ-
ingsmallandmidsizecompanies,multigenerational
ownership, and even lifestyle businesses (those set
up to support a founder’s living expenses and pur-
suits, without growing exponentially), rather than
focusing on pie-in-the-sky pitches delivered on
“demo day” like some half-baked reality show.
The Interise Streetwise “MBA” program,
launched by Boston University in 2007, teaches real-
world strategies, such as prioritizing contract bids
tomaximizeprofitability,toentrepreneursininner-
citycommunities.Theobjectiveoftheseven-month,
part-timeprogramis forexisting small-business own-
ers to gain the knowledge, tools,andnetworksnec-
essarytobreakthecycleofstagnation.Graduates
seea 36%increaseinrevenue,onaverage,andquad-
ruplethejobcreationoftheirpeers,accordingto
theprogram’smanagers.YashiekaAnglin,who
headsAnglinConsulting,a Washingtonfirmthat
providesfinancialservicestogovernmentagencies,
completedThxaversionoftheprogramin 2018 run
bytheSmallBusinessAdministration.“Itchanged
howI lookedatmybusiness,”saysAnglin,whoasa
second-generation Black entrepreneur appreciated
the diversity of faces in her cohort. She says her
“classmates” have continued to support one another
during the pandemic, including trading tips on
how to secure funds through the federal Paycheck
Protection Program and other Covid-related assis-
tance. “It took me from jumping at everything that
moves to being more strategic.”
Expanding access to financing should be
another priority if the U.S. is to replenish its ranks
of small-business owners. According to a 2018 report
by the Federal Reserve, the past two decades have
seen the number of community banks in rural and
urban areas fall by almost half, from 10,700 in 1997 to
5,600 in 2017. That places more capital in the hands
of national and global banks, which tend to favor
loans of $1 million and more. (Most entrepreneurs
seek less than $100,000 in financing, according to
another Fed survey.) Not surprisingly, this further
entrenches the systemic inequality of entrepreneur-
ship. “I stopped counting the number of times I got
rejected by banks when pursuing additional financ-
ing to grow my business,” Anglin says.
What we need are more lenders focused on build-
ing relationships with business owners in their own
backyards. (Think George Bailey from It’s a Wonderful
Life reincarnated as a Latina in Albuquerque.) That
argues for policies to bolster the number of com-
munity development financial institutions (CDFIs),
a federally certified form of private financial institu-
tion created in 1994 to support underserved com-
munities. There are a scant 1,000 across the country.
One of them, the Washington Area Community
Investment Fund, extended Anglin a $25,000 loan.
“They were the people who would take a risk on
us,” says Jason Amundsen, who owns the Locally
Laid Egg Company in Wrenshall, Minn., with his
wife, Lucie. The Amundsens used a $320,000 loan
from the local branch of the Entrepreneur Fund
(a CDFI where Jason once worked), to buy their
farm. “I mean, I’ve got 2,000 chickens, and I’m star-
ing down another winter outside in the fields, or I
can buy a farm and get a barn and not have those
chickensspendwinteroutdoors,”Amundsensays.
“That’sa no-brainer.That’sa lifesaver.”
It’shearteningtoseethatthefinancingecosystem
for small business is evolving and now includes a
handful of “sustainable” venture capital funds such
as Indie VC. Based in Salt Lake City, it invests only in
“real” businesses that are on a clear path to profits.
Indie features a GIF of a burning unicorn on its web-
site, a jab at the mythic valuations achieved by some
startups for which profits remain elusive. Niche
lenders of this type are coming together in initia-
tives such as the Capital Access Lab, a fund designed
to seed new financial products and technologies that
can directly address the needs of entrepreneurs.
Finally, what small-business owners also need
as they try to navigate this crisis is community.
The mythology of a maverick genius like Steve Jobs
obscures the truth that entrepreneurship can be pro-
foundly lonely. Entrepreneurs need peers they can
talk with, who can give them advice and guidance.
These bonds may help ensure survival for some
and lessen the trauma of failure for others. A recent
paper from Germany showed that the psychological
effects of losing your business when self-employed
are worse than losing a salaried job.● In 2017 there were5,600
community banks
in the U.S., down
from 10,700 in 1997