Meet the VC Fund Helping Startups in Underserved Communities Grow
In recent months, community leaders from New York, Baltimore, Detroit and Washington, D.C., have come to Oakland, Calif., to ask: How can we launch something like the local-business-building program ICA Fund Good Jobs? The program helps new companies create jobs in underserved communities, and does so in many ways -- with workshops, an invite-only accelerator, venture funding of $250,000 to $1 million and relationships with community banks and local organizations that pitch in as well. Since launching in 2013, Fund Good Jobs has invested more than $2 million in five startups, unlocked $6 million more in outside capital and created more than 100 local jobs. Here’s how one of those businesses grew, using the right tools at the right times.
Oakland-based Keba Konte is accepted into an ICA 10-week business class. At the time, he owns and manages Guerilla Café, an organic coffee shop in Berkeley, but he dreams of building his own small-batch coffee roaster business and a chain of cafés.
Konte opens a second coffee shop in San Francisco, Chasing Lions Cafe. The shop does well, but he still wants to roast and sell his own coffee in his shops.
Over the summer, Konte builds a roasting lab in his garage, where he experiments with coffee blends and roasting techniques while getting pro bono advice from ICA’s advisers on launching Red Bay Coffee.
Red Bay Coffee opens in Oakland as a micro-roaster, roasting less than 130 pounds of coffee at a time. Now that Red Bay is an official business, Konte joins ICA’s accelerator program and spends the rest of the year developing a fund-raising plan and financial and job-creation projections.
Konte works with ICA to construct a Kickstarter campaign with optimal prizes and prices, then raises $87,000 on the site to fund a coffee bar -- and, with the organization’s help, also begins negotiating a sizable seed round with several of the philanthropic fund’s financial partners.
Red Bay Coffee closes a $725,000 investment round of debt and equity; ICA Fund Good Jobs contributes $300,000, and the rest comes from a handful of angel investors. Konte opens his dream 7,800-square-foot roasting facility in East Oakland.
Red Bay Coffee employs more than 25 people, most of them minorities, many of them formerly incarcerated. Wholesale customers include Uber, Salesforce, Twitter and Instagram. By year’s end, he’ll have opened his Kickstarter-funded coffee bar and another one inside the roasting facility.