Innovation at Ventures
Will von Geldern

October 18, 2018

Since our founding in 1995, Ventures has innovated and constantly improved the services that we provide our entrepreneurs. After originally being founded as a microfinance organization, we have focused on listening to and learning from the entrepreneurs that we serve and updating our programs accordingly – and that is why our programs look the way that they do today.

Ventures was conceived after Peter Rose, our founder, was inspired by the success of the microfinance movement in Bangladesh. Since the founding of the Grameen Bank in Bangladesh in the 1980s, microenterprise and small business development have proven to be highly effective anti-poverty strategies in communities around the world. Ventures (originally named Washington C.A.S.H.) was founded with the idea that small business development can provide an accessible pathway out of poverty for underserved communities in the Puget Sound region and around the country.

In Ventures’ early years, our work focused on bringing the Grameen model to underserved communities in Seattle. We found that our peer microlending programs provided access to valuable capital for low-income entrepreneurs, and nonprofits from around the United States experimented with similar models. We started small – we began our peer loan program with three loans, each under $500. But Ventures has always dreamed big.

Since then, the focus of our programs has expanded significantly in response to the needs of the entrepreneurs that we serve. As a certified community development financial institution (CDFI) and a community development corporation (CDC), Ventures acts as an intermediary for loan funds from the U.S. Small Business Administration (SBA), and we also use loan funds from other corporate and philanthropic sources to help our entrepreneurs grow their businesses.

We also continue to tailor our services to individuals for whom business development services are out of reach, with a focus on women, immigrants, and people of color. We know that Latinos and African Americans are more than four times less likely to own businesses than white Americans, and are more than twice as likely to not receive full funding when requesting loans from a bank. Women-owned small businesses also face multiple, interrelated barriers to growth: women-owned businesses receive less than 15 percent of funding from major Small Business Administration loan programs and less than eight percent of all venture capital deployed in the U.S. We began our work by focusing on microlending to try to help “under-banked” entrepreneurs address these challenges, and have since developed our programs to take a much more comprehensive approach to economic development.

So what has changed? In response to demand from our clients, we have developed a much more comprehensive set of courses, trainings, and workshops which we supplement with customized coaching and consulting to help our clients break the cycle of poverty.

Now, every client that comes through Ventures’ doors goes through our eight-week Business Basics Course. From there, everything is customized according to their needs. We have developed a model that allows us to serve a large number of entrepreneurs with limited resources without losing our focus on quality over quantity. We have learned to innovate and expand based on the needs of the entrepreneurs that we exist to serve, and this approach has served us well.

To be sure, microlending is still a part of what we do – but the numbers speak for themselves. Over the last 15 years, the percentage of Ventures clients receiving loans has decreased from 17 to just 3 percent. This is due in part to our ability to serve more entrepreneurs, but also to our decreasing focus on access to capital.

This shift reflects the fact that we are able to better customize our services to the needs of our entrepreneurs. Although we lend less, for example, we have been able to significantly improve the speed with which clients can access capital after completing our Business Basics Course if it is the right fit for their business. Five years ago, it took clients an average of 17 months to receive a loan. Today, we have brought that number was down to five months. By listening to our clients, we have been able to better identify when microfinance is the solution – and just as importantly, when it isn’t.

In the last fifteen years, we have learned that access to capital is just one small part of a comprehensive toolkit of microenterprise services that our clients need. Our entrepreneurs also need a comprehensive toolkit including mentorship, business incubation, and technical assistance – a term we use to refer to customized, one-on-one coaching – to meet them wherever they are in life and help them thrive.

That’s why we structure our programs like we do today. We need to make sure every entrepreneur that walks through our doors is equipped with the basic tools to run a business, and from there we provide a flexible model that maintains our ability to provide every client with the services that are best for them.

Once entrepreneurs have attended an orientation and graduated from our eight-week Business Basics Course, they have access to every other service that we provide. This includes an array of business courses on topics as diverse as financial management, sales, and digital marketing, as well as access to our incubators and microloans. Each of our clients also receives customized advice from our team of coaches and business specialists, many of whom are former or current small business owners themselves.

We have also honed in on this model because we know that it works. We conduct annual surveys and check in regularly with our entrepreneurs, and the numbers speak for themselves. More than two-thirds of our entrepreneurs move out of poverty within two years of entering our program, and entrepreneurs’ median household income increases by more than 50 percent in that same timespan.

With this model as our foundation, we have been able to innovate and try new things based on feedback from the clients we serve. We have invested in incubation through the Ventures Marketplace (our retail store and business incubator in Pike Place Market), affordable commercial kitchen for our food businesses and an online Business Directory that allows anyone to shop for products and services from a Ventures-supported small business owner. In 2017, we celebrated $1,000,000 in revenue for Ventures entrepreneurs through the Ventures Marketplace, and more than $800,000 in revenue for entrepreneurs from our food incubation programs.

We have also focused on expanding our core programs to meet the growing demand. We know that entrepreneurship can be a highly effective tool for many low-income individuals, and we endeavor to reach as many entrepreneurs as possible with high-quality programming. We now serve more than 600 entrepreneurs each year, and we are broadening the geographic scope of our programs through the growth of the Ventures Network, our “consulting arm” that helps us generate earned revenue while inspiring other nonprofits and government agencies to promote economic opportunity through entrepreneurship.

These innovations are just the beginning for Ventures. We have also recently created InnoVentures, a pitch competition for our entrepreneurs, a policy and advocacy program and several other exciting projects that put us at the cutting edge of microenterprise development.

Since our humble beginnings more than 20 years ago, we have discovered that helping low-income entrepreneurs requires so much more than microfinance. We will continue to innovate with our entrepreneurs at the center of everything that we do – and you can stay up-to-date by following us on Facebook, Instagram, Twitter, and LinkedIn or by joining our email list here. You can also donate to support our programs, explore volunteer opportunities and find other ways to get involved. Can’t find what you’re looking for? Don’t hesitate to reach out to us at info@venturesnonprofit.org.