INDIANAPOLIS — During the first half of last year, $140 billion was spent on venture funding to support new and emerging entrepreneurial firms across the United States. Of that total amount, just 1.2 percent went to Black-, Hispanic-, Asian- and Native American-founded companies.
Red-lining — a form of racial discrimination based on where people live and work — also remains another hurdle for many diverse-led firms.
“If it’s not because we don’t have good ideas, what could it possibly be that steers that much capital away?” asked Daryle Johnson, CEO and president of the Mid-States Minority Supplier Development Council. “There are probably some legitimate shortcomings in the way a group that isn’t traditionally leveraging that kind of funding shows up to the party with no mentoring, no coaching.
“No one ever really does it by themselves, in anything. The pool of resources and mentoring and coaching for diverse businesses is smaller, so they’re showing up less prepared,” he added.
Enter Enterprise Corps, a collaboration between the Indiana University Kelley School of Business and other partners to work with historically underserved and small businesses to overcome the challenge.
Established during the pandemic, it is poised for expansion and today is helping diverse-led businesses better pursue venture funding and thrive. Kelley has joined forces with the Indy Chamber, Indy Black Chamber and Mid-States Minority Supplier Development Council through the Enterprise Corps to make an impact.
“IU Kelley is leading the charge with us from an educational perspective,” said James Knight, program manager of Mid-States’ Accelerate 100+ program, which worked with more than 100 central Indiana companies last year. “They’ve offered tremendous resources in terms of academics and global brand recognition and outstanding professors who are willing to be a part of this group and take time to teach a key core curriculum.
“It elevates our whole mission to a higher level,” Knight added.
Initially launched to make Indianapolis a better place for small business success, Kelley faculty involved in the project believe their long-term business acceleration model has come into clearer focus, providing “business education for businesses” on a broader scale.
“We’re building an infrastructure so that the Kelley School can help minority-owned business grow,” said Phil Powell, who initially led the effort in central Indiana as Kelley’s associate dean of academic programs in Indianapolis and is now taking it statewide as academic director of the Indiana Business Research Center.
“We are showcasing how the Kelley School of Business and Indiana University can serve the state as engines for economic development,” Powell said. “Central to those efforts is building an ecosystem that helps minority-owned businesses.”
When Kelley Direct Online MBA students come to Bloomington May 19 to 23 for their “Kelley on Campus” residential component, the Mid-States Minority Supplier Development Council will be the client for a live case competition at the heart of the week’s agenda.
Similarly, students in the school’s Evening MBA Program in Indianapolis will be paired on May 23 with small businesses as consultants. As the program’s required capstone project, students are tasked with solving a real business challenge for real companies.
Began in response to the pandemic
The program began in 2020 as a collaboration with the Indy Chamber and its Business Ownership Initiative as COVID began impacting society and the economy, providing rapid response efforts to support the continuity and survival of vulnerable small companies and business enterprises in central Indiana.
“The pandemic was such an important time particularly for small business owners. They had a lot of questions and the IU Kelley School of Business really wrapped around our program to extend our ability to help business owners navigate a confusing time,” said Stacia Murphy, senior vice president of enterprise development at Indy Chamber.
The first phase of Enterprise Corps paired Kelley School faculty with small businesses for regular coaching and mentoring over several months. Since then, it has offered enterprise access to small business support resources, coaching, capital, and programs supporting growth and scale, as well as professional development, executive leadership training and connections to larger networks.
“It was serendipitous, something good that actually came out of COVID,” Powell said.
A critical problem made even apparent because of the pandemic was how deep the disparities were for Black- and minority-owned businesses, Murphy said.
“It became apparent they overwhelmingly lacked access to money, market and management training. Over 80% of the chamber’s membership is considered small businesses. Therefore, the focus on developing the small business community is paramount,” she said. “Our work with Enterprise Corps amplifies this mission to ultimately support our most challenged business owners in gaining access to the resources they need to grow and scale.”
Grants and philanthropy fund the Kelley School’s contribution to Enterprise Corps. This includes a planning grant from J.P. Morgan Chase & Co. for Enterprise Corps partners to make Indianapolis part of the Ascend Cities Project, a national coalition based at the University of Washington that is working to drive small business growth and job opportunities in 13 cities.
Already an established track record of success
Collaboration, coordination and communication with external partners has been a key reason for program success.
The Supplier Diversity Program in IU Purchasing has been an integral part of the Kelley School’s contribution to Enterprise Corps. Collaboration with Richard J. Wise, IU director of supplier diversity, has ensured alignment with strategic goals of the university. Wise also represents IU on Mid-States’ board.
“Enterprise Corps has been a dynamic resource for the Indy Black Chamber and our member businesses,” said Anita Williams, the organization’s board chair. “The MBA students and instructors working with our businesses have been the perfect complement to our businesses’ growth.
“The majority of our business owners have on-the-job training. The Enterprise Corps brings in the educational piece that was missing,” Williams added. “Some of our members haven’t had the time to receive business consulting. Kelley has come along to be the consultant to allow their businesses to achieve greatness. Our interaction with Kelley School MBA students puts research assistance at their fingertips.”
To date, there have been more than 40 MBA consulting projects for companies served by the Enterprise Corps. Last fall, about 75 owners and managers from primarily minority- and women-owned companies earned an executive certificate in business strategy through Kelley School of Business Executive Education, taught by Greg Fisher, the Larry and Barbara Sharpf Professor and associate professor of entrepreneurship. That program is expected to be repeated later this year.
“It was fascinating to me because I spend quite a bit of my time teaching and working with executives, but they’re invariably from a single firm,” Fisher said. “The diversity of the businesses that were involved — in terms of size, industry, age, whether it was a family firm and whether it had physical goods and products or purely digital — was both a challenge and an opportunity.
“It was a huge opportunity in terms of people learning from other industries and being able to borrow ideas,” he added. “There was quite a lot of cross-pollination going on.”
Williams said the Enterprise Corps helped Indy Black Chamber members identify potential partnerships with similar businesses. “The class was instrumental in helping them understand the difference between working on their business and working in their businesses,” she said. “Many of those business owners were able to excel in other business ventures because of this course.”
Many of those businesses also were involved in Mid-States Minority Supplier Development Council’s inaugural Accelerate 100+ program, which produced 112 graduates in mid-October. The 12-month professional development program provided contracting and procurement opportunities, access to capital, increased access to corporate decision makers, partnership opportunities, increased business understanding of marketing concepts and support services.
“Kelley’s involvement with the A-100 catapulted our whole program to a higher level,” Knight said. “We’re getting wonderful corporate recognition now. Other councils around the country are recognizing the value of what we are delivering and want to be a part of it.”
Knight said the range of participating companies in Accelerate 100+ involves companies at every stage of development, from start-ups to those with more than $250 million in annual sales. About 140 business people are now enrolled and actively involved in the second program cohort.
Guidance that makes an immediate impact
Mid-State’s Johnson, who received a dual bachelor’s degree at Kelley Indianapolis in marketing, and distribution management and logistics, with a minor in economics, can relate to businesspeople served by the Enterprise Corps and related efforts, because of his experiences as an entrepreneur.
“Businesses don’t normally have this kind of stair step on how to get to revenue growth, and every stair step almost always requires a pause and a look around to who do I know,” Johnson said. “What we’re trying to build is an escalator, to help these companies with great potential to rise up.
“Enterprise Corps is our accelerator, our partner of choice, because it picks up the folks that we graduate and immediately gives them additional resources,” he added. “What is it they say? When you know better, you do better.”
Powell said work and fundraising continues to grow the impact of Enterprise Corps. It is hoped that a similar model will be employed in Bloomington to help growth-oriented small businesses scale in the south central part of the state.
“We have a great deal of data about how small businesses grow and the challenges they face, so this will benefit our research mission as well,” he said. “For many years, the IBRC has served the interests of many stakeholders of Indiana University. It will be gratifying to see how we will contribute to greater inclusion and belonging.”
