Long Beach Strengthens its Entrepreneurial Ecosystem: The City of Opportunity for Workers, Investors, and Entrepreneurs
Long Beach is partnering with trusted community-based organizations to help entrepreneurs start up, stay up, and scale up.
The following blog post is part of the City Accelerator initiative, a collaboration between Governing, the Citi Foundation and Living Cities that aims to speed the adoption of innovative local government projects within and across cities that will have a significant impact on the lives of their residents, especially those with low incomes.
In April 2017, Mayor Robert Garcia and the City Council adopted the Blueprint for Economic Development (Blueprint). The Blueprint serves as a call to action for the City of Long Beach, private sector, academia, and community-based organizations (CBOs) around a strategic vision for economic vitality. It is already producing new, more efficient ways of assisting entrepreneurs and cultivating an environment that not only welcomes but encourages partnership. Still, a question remained: How does Long Beach ensure this work is radically inclusive, equitable, and collaborative? The answer has been found in the Long Beach City Accelerator Initiative, a collaboration between Governing, the Citi Foundation, and Living Cities, on local business and job growth.
City Accelerator is built around proactively ensuring entrepreneurs are equipped and supported to create jobs and become high-growth businesses. During the 12-month initiative, the City of Long Beach is building on an existing micro-loan program; establishing and intensifying partnerships with the private sector, academia and CBOs; and increasing access to technical assistance, mentorship, and other vital resources.
“Long Beach thrives when every person in our city has the best access to the tools and skills they need to succeed. Our business community is a big part of what makes Long Beach so unique. The partnerships facilitated through the City Accelerator have allowed for expansion of cross-sector efforts we’ve been working on to open up our business environment for everyone. Bringing together Long Beach’s business community with our educational partners like Cal State Long Beach ensures we are growing the ecosystem for entrepreneurs to prosper here,” Mayor Robert Garcia said.
Access to Inclusive Capital
In 2018, Long Beach became a “Kiva City.” Through the Kiva Program, Long Beach entrepreneurs can access zero-percent interest, no-fee loans to sustain or grow their business. Kiva is great for business owners who may be unable to access traditional commercial loans. While other cities have created similar programs, Long Beach’s program is unique. Through our partnership with the Los Angeles Local Initiatives Support Corporation (LA LISC), local Kiva borrowers who are endorsed by a Kiva Trustee can access a matching fund. Every dollar that is lent from Long Beach residents and people across the world is matched dollar-for-dollar, in real time. Trustees are local, trusted CBOs that publicly vouch for entrepreneurs in their community for a Kiva loan. They identify and reach out to businesses who would benefit from a Kiva loan, evaluate borrowers based on their business model and the impact a Kiva loan would have, and, most importantly, help support borrowers throughout the loan process. To date, the City has recruited 13 Trustees that have partnered with us to provide these loans to 17 businesses, deploying $157,000 in capital.
Seventy-seven percent of businesses that have benefitted from a Kiva loan are owned by entrepreneurs of color and 41 percent are majority woman-owned businesses. The program has supported businesses in different industries at different stages in the business life cycle. Arturo Ensico, owner of Gusto Bread was approved for a loan of $10,000 that helped fund the purchase of a second oven and a heavy-duty dough mixer so he can offer more quality artisanal breads to meet growing demand. Prior to purchasing new equipment, Arturo was mixing all his dough by hand.
Tanai Holder, co-owner of The Salt Lounge, received a $2,000 loan that helped pay for a salt chamber, which is an important component of her new holistic wellness business. The Salt Lounge has been open for less than a year. This business was supported by its Trustee, ABC Black Foundation.
Long Beach is on its way to becoming a leader in addressing funding gaps for small businesses through the support of an Executive Fuse Fellow, Daniel Han. Through an initial scan and meeting with local lenders, the city is now creating and strengthening partnerships between lenders and CBOs that are on the front line of serving underserved entrepreneurs. This work gets at the larger, systemic issues around capital and entrepreneurs-of-color and will fuel efforts to bring more investment into the city to be accessed by a diverse set of business owners.
Helping Entrepreneurs Grow
Beyond expanding access to loan funds, Long Beach is providing one-on-one mentorship to entrepreneurs to help them plan for the next stage of growth. Participating entrepreneurs receive an individual assessment of their business by a qualified business coach; are paired with an experienced business owner that can impart his or her experience and wisdom; create a one-year action plan based on their individual business needs; and participate in a series of cohort meet-ups where participants will network, share challenges and opportunities, and receive training on issues ranging from access to capital to branding and digital communications.
Ambitious Ales, a majority minority-owned craft brewery and Kiva loan recipient (watch their Kiva video here), is excited to participate in the program.
“I feel that the initiative would bring value to my personal growth as an entrepreneur and provide professional support for our startup business.” Juan Carrillo, co-owner of Ambitious Ales shared. “Our team is comprised of new entrepreneurs with no formal business experience. We have leveraged our skills and passion to help us get to this point. We seek to continue developing our business acumen with the support of seasoned professionals that can provide us insight from their successful business experiences.”
This is high-touch approach is delivered in concert with other business support in the community, such as our local Small Business Development Center, SCORE South Bay/Long Beach Chapter, and the new California State University, Long Beach Institute for Innovation and Entrepreneurship.
The city is also launching its first ‘entrepreneurial pop-up space’ this summer, a first-of-its-kind partnership between LINC, a community-minded affordable housing developer, the local workforce board, Pacific Gateway, and the city. A historic corner storefront will serve as a testing-ground for entrepreneurs, who will work with a team of experts to activate the space, each over two consecutive weekends. The goal is to create a popular consumer destination for new products and businesses that leverages each startup’s social media following and the city’s six million annual visitors into a unique entrepreneurial lab.
Mapping the Ecosystem and Expanding Access
To successfully increase opportunities for all entrepreneurs, we need to refine our understanding of the existing business resources and know what is missing. Long Beach is working with local partners to create and validate a directory of existing business resources categorized by resource type, similar to models that have proven effective in other cities. The directory will serve as a digital and physical reference document for our partners to provide to entrepreneurs they encounter and help us establish a baseline of mutual understanding about what exists. It will also help us collectively identify resource gaps. Identifying the neighborhoods where resources are available, knowing the languages and formats information is delivered in, and understanding the types of business resources there are not enough of is an important step in helping us define a collective action plan to address the gaps.
Building the Community’s Capacity to Support Entrepreneurship
The city and its network of business support programs are often not the first place an entrepreneur looks for guidance. Immigrant communities and other entrepreneurs of color often first access neighborhood support systems, including many of the city’s cultural organizations. The city recognizes these CBOs as critical partners of this work, as they act as liaisons to the wealth of resources the city is bringing on line. An important part of the City Accelerator Initiative is coordinating groups such as United Cambodian Community, Ronnie’s House, and Long Beach Fresh, through technical support, the establishment of an entrepreneur referral system, and funds to incubate entrepreneurs within the neighborhoods too often left out of the economic growth. Through this work, our partners will become champions of local entrepreneurship and lead a new, shared vision among ecosystem builders that will result in a measurable impact. These are the first building blocks of a long-term commitment and approach that will reshape the city’s entrepreneurial ecosystem, ensuring it is accessible and equitable for Long Beach’s future business leaders.
Erick Serrato, assistant director of the Pacific Gateway Workforce Innovation Network, contributed to this post.