RISE to the Challenge: Immigrant Entrepreneurship in Louisville
Entrepreneurship and innovation have been the lifeblood of America since its founding. Immigrants from all over the world have come to these shores to forge a brighter future for themselves, their families and their communities. This land of opportunity lived up to its reputation and instilled hope in the hearts and minds of these new Americans that their dreams could be realized.
America’s economic growth over the past two centuries spurred increasing employment opportunities, which created the need for more and more talent. Immigration was cautiously used to fill the gap. Leading up to the 21st century, America’s appetite for talent brought many foreign, tech-savvy workers to its shores, thus providing greater opportunity for technology-oriented innovations that solidified America’s status as a hub of innovation.
The astoundingly fast pace of technological innovations has changed the economic landscape, with opportunities for technology-based products and services taking center stage. Although the frenetic pace of this cycle of innovation (funding, growth and acquisition) did not always have good endings—the dot com boom/bust being a case in point—the good news is that this heralded the advent of the venture capital industry. Packaging innovation to attract funds and successful exits spawned an adjunct business education system designed for entrepreneurs who could cash in on their innovations earlier. Effective best practices are being developed continually to spur this kind of entrepreneurship, two essential requirements of which are scalability and equity investment.
Many small startup businesses do not fit the existing venture capital model. While these businesses are essential to our economy and make up the majority of business ownership today, they do not get the attention and assistance that scalable models receive. This is the gap that has to be filled.
Anecdotally, it is recognized that America was built by immigrant entrepreneurship and innovation. This is borne out by reports that close to 30 percent of all new small businesses are started by foreign-born individuals and their families. (See Figure 1.) In addition, close to 40 percent of America’s Fortune 500 companies had foreign-born founders and are actively run by their descendants. (See Figure 2.) Many of these examples were not scalable enterprises, nor did they attract investment dollars at the outset. They blossomed because of the innate “entrepreneurial” trait that most immigrant-owned businesses possess.
Percentage of U.S. Businesses Started by Immigrants
Statistical evidence underscores the importance of recognizing the sheer grit, innovativeness and energy that immigrants bring to the business world in our country. (See sidebar at bottom.)
With that entrepreneurial trait in mind, Louisville, Ky., launched a program designed to spur immigrant entrepreneurship. RISE: Refugees and Immigrants Succeeding in Entrepreneurship is a collaborative effort between nonprofits and the city’s Metro Government. Louisville Mayor Greg Fischer, a former businessman himself, has made entrepreneurship a priority for his administration. The goal of RISE is to make it easier for immigrants to leverage their entrepreneurial tendencies and establish sustainable businesses in the community. Success in helping the foreign-born population start and grow businesses will be a big boost not only to the local economy but, coupled with existing capacities in entrepreneurship across the nation, may establish Louisville as the entrepreneurial hub of the Midwest.
RISE is a high-touch, focused program resulting in the certification of aspiring immigrant entrepreneurs as business-ready. It channels their talent, energy and gumption toward successful and sustainable businesses.
Shortage of funding always plagues business startups. Lack of credit history and collateral is compounded in the case of immigrants, often exacerbated by their lack of knowledge regarding how to prepare and present their ideas to potential investors or financial institutions. The situation is often worsened by the lack of a business network, role models, advisers and even something as mundane as having a foreign accent. RISE aims to mitigate many of these factors for an otherwise promising enterprise.
RISE partners include:
- funding sources (Louisville Metro, Jewish Family and Career Services, Community Ventures Corp. and Kiva Zip);
- advisory bodies [Federal Reserve Bank of St. Louis, Small Business Administration/Service Corps of Retired Executives (SBA/SCORE) and Small Business Development Centers (SBDC)]
- refugee resettlement agencies (Catholic Charities and Kentucky Refugee Ministries);
- financial institutions (BB&T); and
- educational institutions (Jefferson Community and Technical College and University of Louisville).
From the time aspirants show interest in becoming business owners to the time they are well on the way to running a sustained business, RISE follows a standardized methodology that is replicable and measurable at each step. (See Figure 3 below.)
RISE standardized methodology for becoming a business owner
Although immigrants come to the U.S. in hopes of realizing the American dream, starting a business may not be their initial goal. One key factor in stimulating immigrant entrepreneurship is popularizing the possibility of entrepreneurship in America through trusted groups and organizations.
Refugee resettlement agencies that have provided initial assistance are a natural starting point, as are community organizations, community colleges and small-business development agencies such as the SBA/SCORE and SBDC.
The intake person should be encouraging and empathetic, with some degree of training to properly guide and capture demographic and other relevant information. The intake process may also reveal that the candidate is not ready to start a business—a better discovery during intake than after a substantial investment of time and money.
An empathetic former entrepreneur, or someone experienced in dealing with small-business owners, is a natural fit for this part of the process. Coaching involves guiding and preparing candidates for business ownership. Additionally, RISE coaches keep abreast of new techniques, software and online resources. They have enough community standing and contacts to make introductions or call on appropriate resources when necessary.
A critical first step is visioning, which allows the aspirant to gauge their own resolve and abilities before investing time and resources. RISE coaches engage in extensive needs analysis and mitigation. They offer appropriate training, online and other education, and helpful introductions to mentors and subject matter experts. Coaches also work with existing immigrant business owners who want to expand and experienced immigrant business people who want to start a new enterprise.
Personal Coaching and Mentoring
Any small-business owner will attest to the need for personal development and financial management, as well as maintaining a work-life balance and health. RISE has made personal coaching a key result area, beginning with an individual SWOT (strengths, weaknesses, opportunities and threats) analysis, which is revisited throughout the process to highlight the importance of personal well-being to the entrepreneur.
A business-ready and RISE-trained entrepreneur will be certified as business capable by an external panel based on criteria drawn up by funding sources such as banks, coaches, mentors and others.
RISE seeks to harness and support the courage, talent and energy of immigrant entrepreneurs, and channel that drive so their businesses can create a tsunami of economic growth and prosperity.
Bridges is a regular review of regional community and economic development issues. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.
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