This article originally appeared on NextCity
Yolanda Jones gets to the office at Yolanda’s Construction Administration & Traffic Control (YCAT-C), which she founded in 2010, every day at 6 a.m. There’s a lot happening.
YCAT-C has $6 million in contracts earned or lined up for this year, its biggest year so far. She’s got something in the pipeline that could add another $10 million in annual revenues and perhaps 20 more employees in the next year. And, oh, NBA star LeBron James gave Jones a shout-out recently on Facebook and Twitter. She won a small business contest he held last fall.
That’s a long way from the $200 Jones used to buy a pair of flags for the company’s first traffic control contract back in 2010. YCAT-C workers direct traffic and pedestrians around construction sites.
The $200 was the money Jones had left over after burying her son, Leonard Bradley. Police shot and killed him during a chase in November 2009. He was unarmed, and 16 years old at the time, and Jones didn’t want to see it happen to anyone else.
The company’s main office is in San Francisco’s Bayview-Hunters Point neighborhood, a historically working-class neighborhood of color where Jones grew up, that the city now hopes to change. The goal, housing officials told The New York Times, “is to reinvent an isolated island of poverty into a ‘mixed-income’ neighborhood with sophisticated architecture and a coherent urban design.” Development dollars are pouring in, and Jones is making sure that her neighbors and other underrepresented people get a piece of that pie.
For every contract she picks up, if she needs to hire new employees, she goes out into the community and finds someone she knows and trusts to take on the job. If she needs to, she reaches out to local organizations like Mission Hiring Hall or Young Community Developers. She may also reach out to Jobs Now!, the city’s subsidized employment program. YCAT-C has around 20 employees currently, including three of her five surviving children and her husband.
“It was always a mission, because I’m from the community, and I was formerly incarcerated, and I’m a victim of domestic violence,” says Jones.
Entrepreneurs like Jones are ideal candidates for Inner City Capital Connections(ICCC), a program of the Boston-based Institute for a Competitive Inner City (ICIC). She joined the program in 2015.
“One of the things we look for is the readiness for growth, the readiness to be a good job creator,” says Hyacinth Vassell, director of ICCC. Since the program’s inception in 2005, ICIC says participating businesses have created over 12,000 jobs, 61 percent of them paying more than $40,000 a year.
To participate, businesses must be headquartered, or have a majority of physical operations, or have 40 percent or more of its employees residing in an economically distressed area, defined by city, state or federal criteria. So far, 62 percent have been minority-owned, and 37 percent have been woman-owned. Since 2005, 1,122 businesses have participated, from 44 states, hosted in 13 cities.
A host city, says ICIC CEO Steve Grossman, needs two things: local buy-in from mayors or other elected officials, and a funder (typically banks or corporations). Entrepreneurs don’t pay anything and, for now, ICIC avoids taking money from the public sector. Grossman, a former state treasurer, says public money can be too fickle. It’s crucial, he says, to have a commitment of three to five years, in order to generate a critical mass of small businesses in target neighborhoods that know each other and can support each other.
It’s not a program for startups. There might be relatively new businesses, but half have been around for at least 10 years. The average business in ICCC has $4.7 million in annual revenue. Jones had about $3 million in revenue when she came into the program.
“When I got to $3 million, that’s when I said OK, it’s a real business now,” she remembers. “That’s when I realized I needed these other classes.”
Every November, ICIC holds its Capital Connections Conference in New York City. All ICCC CEOs past and present are invited. Around 150 investors attend, and there are public, Shark Tank-style pitch sessions and some behind closed doors. Grossman says the goal is to get each pitching business a second meeting with at least one investor.
Since 2005, ICIC says participants have raised $1 billion in debt and $385 million in equity investments after participating in ICCC. The track record is enough to generate a little FOMO — fear of missing out — among investors and that keeps them coming back for more.
“In the beginning, I would have to do some selling to investors,” Vassell says. “But not where we are right now, where we have proven results they hear about. The thing with capital providers is they know each other, they talk to each other.”
Jones raised some debt capital post-ICCC, with the help of alternative lenders who didn’t require a personal credit check. That helped her purchase some additional equipment. But more than that, she says she benefited most from learning how to plan out two to three years ahead for her business. “I probably couldn’t have gotten to where I’m at now without them,” she says.
ICIC drives inclusive economic prosperity in under-resourced communities through innovative research and programs to create jobs, income, and wealth for local residents.
PO Box 191297
Roxbury MA 02119
Sign up for our mailings and stay up-to-date on all research, commentary, and news related to ICIC as we continue to drive inclusive economic prosperity in America’s under-resourced communities.
© 2023 ICIC. All rights reserved.