Conscious Investing & Social Change w/ Jeremiah Robinson - Part 1

Discover the profound impact of conscious investing with our guest, Jeremiah Robinson, an entrepreneur and advocate for social change. Jeremiah, the entrepreneur in residence for Mountain BizWorks and Neighborhood Economics, enlightens us on how investing in each other can revolutionize our society and economy. We steer into the heavy topics of national debt and the role of big banks. Be prepared to have your perspective on investing shifted as we spotlight institutions like Project Equity and Shared Capital Cooperative and their inspiring work towards creating a balanced economy.

Dive deeper into the world of entrepreneurial support with Mountain Bizworks, a CDFI committed to fostering economic growth by providing essential financial capital, educational resources, and personalized coaching. Hear real-life success stories of entrepreneurs overcoming financial barriers with the help of Mountain Bizworks, and learn about the widespread issue of mixing personal and business funds. Jeremiah shares his experience of mentoring a budding entrepreneur, who, through perseverance and exceptional business acumen, transformed into a Mountain Bizworks coach and facilitator. Join us in our second episode with Jeremiah, where we explore the transformative work of Neighborhood Economics. This is a conversation that challenges us to reconsider our financial habits and compels us to invest with intention and purpose.

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Transcript

Joel: 0:33

What if investing in each other could change the world? I'm Joel Skeen with bizradious, and this is the Mindful Marketplace.

Joel: 0:44

Come back to an exciting first video episode here of the Mindful Marketplace on bizradious. I am your host, joel Skeen, and this is your first time with us. On this program we talk to the entrepreneurs, advisors, industry leaders, investors and economic experts who are not only solving a market problem to make a profit, but who are also solving a social problem to make an impact. It's where we learn how to connect our money and our businesses to our values, our community and ourselves. Today I'm excited I'll get to be talking with Jeremiah Robinson, who is the entrepreneur in residence for Mountain BizWorks, and he also works for the fantastic organization called Neighborhood Economics. But before we get into the conversation with him, first let's hit on the balance sheet the assets, liabilities, debts and investments. So first, in the assets column, I wanna talk a little bit about an organization called Project Equity, who is helping businesses transition to models of employee ownership. So they recently announced that US cities are starting to recognize more and more that employee ownership is a good model to help promote, because more than half of local business owners are actually nearing retirement and most of them lack options to sell their business in a way they want to. Several of these cities see the benefits of employee ownership as the solution. They retain local businesses, jobs and tax bases. They provide pathways to quality jobs, financial stability and wealth building for frontline workers and workers of color, not to mention help businesses better recruit, retain and engage their workforce and create a more resilient and equitable local economy in this post pandemic world. So a few cities are doing that in a variety of ways, including Tucson, arizona, which has launched an awareness raising campaign to educate business owners and advisors about employee ownership. Berkeley, california, has invested in employee ownership to retain all their beloved legacy businesses and have added employee ownership to its beneficiaries of several programs, including their by local bid preference program, their business permit application and the revolving loan fund in and our funding technical assistance for local businesses to transition to employee ownership. And lastly, city of Chicago recently made a historic $15 million commitment to catalyze sustainable economic recovery and advanced economic and racial equity by investing in a variety of communal wealth building strategies, including support to build awareness and local capacity to support employee ownership transitions. All right.

Joel: 3:29

Next, in the Liabilities column, we got the big banks. Us banks, according to a recent Wall Street Journal article, have found new ways to unload risk as they scramble to adapt to tighter regulations and rising interest rates. So JPMorgan Chase, morgan Stanley, us Bank and others are selling these complex debt instruments to provide fund managers as a way to reduce regulatory capital charges on the loans they make. These are so-called synthetic risk transfers. They are very lucrative for the investors, who can typically get returns of around 15% or more, and banks are using these synthetic risk transfers. They've been in use for about 20 years, but they haven't been used a lot, especially after the 2008, 2009 financial crisis, when a lot of us there was a lot of pushback against these complex debt instruments like credit default swaps, but these transactions in the wake of that became harder to get past US bank regulators, in part because those similar instruments were used back when Lehman Brothers failed In the debts column.

Joel: 4:38

There was an article recently in Time magazine about the national debt that I want to highlight. It said that the difficulty US Congress had in agreeing on spending for the rest of the year and avoiding government shutdown is really an indication of how hard it will be to deal with our longer term debt crisis. Our rising debt burden is a problem we have to confront in order to preserve our nation's ability to address the many challenges on the horizon and to invest in our nation's productive capacity. The nonpartisan CBO Congressional Budget Office estimated that there was a $1.7 trillion gap between what the government spends and the revenue it takes in this year. In 2023, nearly double the annual budget deficit from last year. So, unless there are significant policy changes, under even the most optimistic scenarios, the accumulated federal debt held by the public will rise above 100% of GDP, a level well above historical experience. And just as a reminder, in order to help combat the debt crisis, the Mindful Marketplace has partnered with local financial tech company Quility to provide all of our listeners with a free, customized report on how you can best eliminate personal and business debt. So protect your retirement accounts and other assets against type of market loss and get free from debt by going to MindfulMarketplaceShowcom and click on the Eliminate Debt tab to get your free report.

Joel: 6:06

Lastly, in the Investments column, I want to share some good news about a group called Shared Capital Cooperative. They have been making loans to local investments, they've been connecting local investors to local businesses and they have said that the demand for financing for cooperative projects has never been higher than in their 45 years of doing business. Last year, shared Capital Cooperative lent more than ever before, and in just the first seven months of this year, they've already placed $7.5 million, exceeding their yearly budget for new lending, and there's still over $3 million in additional projects seeking financing this year that they have not been able to meet. You can actually invest with them and with your values, make a difference and receive a financial return. Funding is easy and open to all, whether you are wealthy and an accredited investor, or whether you're just an average person and a non-accredited investor. You can start as low as $500, and you can choose from either preferred shares or three different fixed-term note options with returns up to 5%. More information on that is available at their website SharedCapitalcoopcom. Slash invest. All right, that is the balance sheet man.

Joel: 7:24

I'm excited to get to talk to Jeremiah here. I met him, man. It's been a couple of years ago now here in the Asheville area. Jeremiah, thanks for being on the show. Yeah, absolutely. Thanks for having me. Yeah, absolutely. I want to dig in on a lot of stuff with you. We got to have your colleague and friend, kevin Jones from Neighborhood Economics on the show the last episode and I've also gotten to speak with Matt Raker from Mountain BizWorks, one of the very first guests we ever had actually on this show, but I really am excited to get your perspective on things here. Could you first just share a little bit about your background? I know you started as an entrepreneur, but how did you get into this world of working in this community investment and solidarity economy?

Jeremiah: 8:16

Yeah well, my background really started in the tech industry.

Jeremiah: 8:21

I worked in corporate IT for quite a while before being laid off from net and really feeling like I wanted to shift gears.

Jeremiah: 8:32

At that time, it always wanted to teach and start my own tech company, so I felt like after being laid off, that was the perfect time to take advantage of that opportunity. So I did both. I started teaching under community college, teaching tech classes at AB Tech, and then also started my own web design company, which really grew from being a web design company to being a web posting company once Amazon web services launched and then from that it grew into being a cloud migration organization that supported small businesses as well as local governments and migrating their technologies to the cloud. And just being an entrepreneur myself and living in the actual area, I realized that there were not a lot of just medium or large size or large scale black owned businesses. As I live in, kind of growing up post college in the Raleigh Durham area and Charlotte areas, there were a lot of just black owned, successful black owned businesses. But coming back to my hometown here in Asheville, I didn't see that.

Jeremiah: 9:44

So, being here, I was just like I really want to figure out why that is and then try to figure out is there something I can do about it, to support these businesses get to a place where they are able to scale.

Jeremiah: 9:57

So came across this awesome opportunity at Mountain BizWorks. At the time I had no idea what a CDFI even was and then just realizing why I wish I had known what a CDFI was when I was trying to start my own business and just having that support system would have helped me, would have kept me from making a lot of financial mistakes when I was getting started. So they had this opportunity to be an entrepreneur residence, which really just meant kind of working as a co-founder with other BIPOC businesses and supporting them to navigate the terrain of understanding how to get access to capital and educating themselves and understanding business finance and all the kind of intricacies that it really takes an entrepreneur to have at least a foundational knowledge around in order to be able to successfully start a business. So just kind of landed in my lap, just had that passion and wanted to have no idea what that looked like and then just kind of just the stars just aligned and I've been with the organization now for almost four years.

Joel: 11:10

Yeah, you mentioned a lot in there that I want to unpack. You mentioned kind of what a CDFI is and kind of understanding that role in the community. You mentioned some of the barriers that a lot of BIPOC and just really any marginalized group faces when they are moving into entrepreneurship. I guess I'm curious for you, though what was that like for you? Do you feel like you saw those same barriers that a lot of other people faced, or do you feel like you had a different journey? I'm curious, what about that made you what you experienced specifically, that made you want to start giving back in that way?

Jeremiah: 11:51

Yeah, I think one of the biggest things was just a lack of awareness, so not really knowing again just not knowing what a CDFI was and not knowing that there was organizations that can support and access some capital outside of just a traditional bank. A lot of traditional banks don't work with startups, they don't work with companies that don't have at least two years of financial history and normally they won't do smaller size loans. So that really. And then they won't work with smaller companies that don't have personal collateral. So if you don't have a home that you can put up as collateral against the loan, that kind of cancels out your opportunities. If you don't have the best credit, that really cancels out your opportunities to work with larger financial institutions. So for BIPOC or marginalized community members can even get to the starting line. We're already kind of eliminated from those opportunities. So that's where a CDFI or community development financial institution really focuses is on when banks say no, the CDFI is there to really be able to support that step before you get to a bank. So that was again just kind of not having that awareness around what it took to even get capital from a bank and then learning about a CDFI and understanding that they oftentimes can have a more customized approach and a one-on-one, relationship-based approach to understand the specific needs of an entrepreneur, instead of just plugging some numbers into a computer and trying to not yes or no. We really try to get to know the entrepreneur and understand the business model itself and understand the entrepreneur's capacity to really start a business and then be able to come up with a way to figure out how we can support that entrepreneur.

Jeremiah: 13:43

So some of the challenges that I faced in particular were again just the lack of awareness, not only at home. I had great credit, but without that collateral piece, that we just wasn't going to make that an option and then just not having the education around the financial side of business. I was running a business but had no idea what the actual financial opportunity of my business looked like. I was just kind of just going with the flow, just making money and doing what I love. So that's where Mountain Business Works was really critical, in that the organization provides access to financial capital, access to human capital, as it relates to education, and access to social capital as it relates to connecting you with the people and the connections that you need in order to actually scale your business and to really prevent you from making costly mistakes, because now you have business coaches that you can bounce ideas and questions off, rather than trying to go out and figure things out and do things on your own.

Jeremiah: 14:49

Now you've got a trusted voice that has experience in your particular industry that can help you to really navigate some of the challenges that you would have faced on your own otherwise.

Joel: 15:02

Yeah, I mean that makes a lot of sense to me because I know for myself and for a lot of people that I know who are in business for themselves. You know they get they started their own businesses and moved into entrepreneurship in some reason, in some way, because it, you know, they weren't able to get what they wanted out of a regular, you know working for somebody else, whether that's a W2 or some other kind of connection there, and so it's like, well, I, if I'm, if I truly want freedom in our current, you know, world and our current economy here, that I've got to kind of strike out on my own and, you know, kind of create my own business.

Joel: 15:35

But there are all of these things that are necessary in order to create a business, in order to create a successful business, at least you can have a, you know one that doesn't do well, but you need a market, you need marketing, you need a lot of times, capital, you need community support, and it sounds like what you're saying is, for a lot of people that's not really. Those things are not easily accessible. And so let's, let's clearly define what a CDFI is. It's a, it's a community. I'm going to say it right community development, financial institution. Right, help, help unpack what that means, because I know you've kind of compared it to a bank, you've compared it to, you know you've mentioned coaching, kind of. What role does that CDFI really play in the community and in the entrepreneurial community, specifically for those people who want to start their own business but face some of those barriers and they maybe they don't have friends and family that can lend them money.

Jeremiah: 16:34

Yeah, yeah so. So when you know, kind of going back to that piece about the friends and family, right, you know, normally when you're starting a business you might, you know, have your own money that you're using, so your bootstrap in, you know, trying to get things going and, you know, get a feel for the landscape. And then, you know, after you start to grow a little bit, you might reach out to friends and family rich, uncle, you know, whatever to try to get some more capital and then from there, that's, the CDFI is kind of the next step, right. So it's a step before the bank and the step after the friends and family. So it's really, you know, kind of bridging that gap between those two, those two spaces. But you know, one thing that kind of sets Mountain Bizworks apart from other CDFI is that in addition to that financial capital, you know, we also offer the learning side of things. So we have classes that can support, you know, entrepreneurs and any stage of their business.

Jeremiah: 17:26

So, whether it be, you know, them just kind of having an idea and wanting to put together a business plan, you know we've got a business six weeks long business planning class that folks can get plugged into. We've got classes on, you know, the financial side of things, understanding, you know, business finance and then understanding how to use QuickBooks. Classes on marketing We've got, you know, cohort based classes that you know, kind of like a year long program for existing entrepreneurs of color. We've got classes on like how to invest. What is what is you know, what does investment look like for your, for your organization or for your small business? So just that educational piece and for you know, really.

Jeremiah: 18:06

And then we got classes for folks that are ready to scale, are already at a scaling point.

Jeremiah: 18:10

So it's like, hey, you know, I've already had a great, a lot of success. Now I just need to figure out how to scale that and really expand on what I'm doing. So, you know, just just a ton of classes and opportunity for entrepreneurs, no matter what level their business is at. And then, on top of that, we have over 70 coaches which can provide one on one support for folks that are like, hey, you know, I've gone through this class. Now I just need to kind of tighten up the business plan. I just need to sit down with one person that I can bounce ideas off of or, you know, just get some clear direction from.

Jeremiah: 18:46

So you know again, just kind of providing that, that full wraparound service for the entire entrepreneurial experience. Because you know, what we don't want to happen is that we just give folks money and then they're like, oh well, I have no idea what to do with this money, right? So we want to make sure that they feel supported and they feel confident about you know what they're going to use those for, that funding for. And then too, on the back end, to make sure that they feel confident about being able to pay back that loan when that time comes.

Joel: 19:13

Yeah, because that's that's typically what happens is people just kind of get a check and then you know they have to figure the rest out all on their own. We had Veronica Edwards, who's also a biz radio host. She's a CPA, and she talked about how she actually spend some of her extra time outside of work, outside of her extracurricular time with Mountain BizWorks helping coach new business owners on that financial piece, because that's that's one of the parts that you know a lot of people love what they do. They love making a certain product or they've got a certain service that they can do really well. But managing all that, that, the financial piece, the CF, you know kind of being your own CFO as well as your own marketing person as well as your own product designer as well as all of that can be. You know some of that can get lost if you don't put an attention on it. Do you have any like particularly oh go?

Jeremiah: 20:06

ahead. Finish that when I was going to say it's one of the biggest, biggest gaps that I see with folks, regardless of what stage their business is in right, is just not having a clear understanding of how to manage their finances, their business finances. And oftentimes, you know, I see folks that don't have that separation between personal and business right, so they're co-mingling funds and just really don't understand what their business actually looks like from a financial perspective. Yeah, yeah with the clients that I work with.

Joel: 20:36

Yeah, yeah.

Jeremiah: 20:37

I was just gonna say with the clients that I work with around.

Joel: 20:40

Yeah, yeah, yeah, sorry, we're getting a little lag there, but with the, with the, a lot of the clients I work with are business owners who have gone into debt and who are now looking to pay that debt off and we're trying to shorten their timeframe from it taking them 20 or 30 years to pay off that debt to you know, five to 10 years to pay that off.

Joel: 21:01

And so I'm curious if you have, if you have any particular things that you've seen, that you've overseen, any particular success stories or times where you've really seen someone be able to overcome those barriers because of that coaching and because of that support.

Jeremiah: 21:19

Yeah, absolutely. I've worked with one guy that comes to mind. You know we probably met over a year and a half ago and he was just, you know, really getting just getting started with his business, you know, and he came to me and said hey, you know, I don't have a business plan yet and I don't know where to start. You know, I know I probably don't need some funding to get things going. I don't know how much money I need. So he really just had a ton of questions and a strong passion for the work that he was kind of doing as a side hustle. So, you know, once we sat down and talked, I said you know, you should really, really take advantage of this, the foundation's business planning class, so that way you can get some things down on paper, get your ideas down on paper, and then, you know, in that foundation's class, one of the most important pieces that they work on is creating financial projections. So, understanding, you know, over the course of the first year of your business, what, what are you going to charge for your services or your products, and what is it going to cost you to actually run this business for a year? So you know, going through that, he was really able to figure out what his pricing model should look like and then, from and to, really get a solid business plan on paper and then, which meant that he was now ready to go back and have a conversation with the lender to talk about how much money might actually need to get started and not only get started but to also sustain the business for at least that first six months where he's really trying to rank things up until he can get to a point of breaking even. So, you know, having that conversation with the lender, you know I remember having talking to him afterwards and him just talking about how intimidating it was at first because there were a lot of terms that he didn't understand about balance sheets and profiting law statements and understanding his own personal taxes and his business taxes. So there were a lot of you know just unknowns you know here for him coming into the coming to Mountain Businessworks initially. But then he went on to, you know, have that conversation with the lender and really over the course of a few months to work through the underwriting process and get his you know quick book set up and really get you know those financial systems in place so that he could understand what his business is going to look like going forward. And then from there he went on to take a marketing class to understand who his exact target market is.

Jeremiah: 23:45

And then from there he went on to join what we call the Catalyst Co-Hor, which is, you know, my program, which is a year long program where folks can set. In the beginning we set, we sit down and we set strategic goals about what you want your business to look like for the next year. And then you know, so we have about 10 entrepreneurs in this group and they each hold each other accountable as they're sharing their goals, normally around money, marketing and management. You know, each person has their own goals and then they work together to really keep each other accountable and keep each other moving towards achieving those goals. So you know, just saying him, go through that process, set those goals and then to work with the group to make sure that they get achieved. And then now he is in. Well, now he's actually a Mountain Business Works coach, so now he's helping other clients do what he did, and now he's also going to be a facilitator for the next cohort that we start next year.

Joel: 24:43

That's awesome. We do have to take a break here we're going to. This is a two part episode, so please tune in again to part two of this conversation with Jeremiah. We're going to dig in a lot more into his work with neighborhood economics. So until next time, you know, subscribe online, listen to us on Biz Radio and the other hosts, and we'll look forward to seeing you here back next week. Thanks so much for being on Jeremiah and for everyone out there. Take care of yourself and take care of someone else.