This article is sponsored by Credit Suisse.
All entrepreneurs—even the most successful—need help along the way. They need capital to fund their growth. They need operational experience and industry expertise to scale. And they need a peer network to call on. With the October launch of the Credit Suisse Entrepreneurs Circle, the bank will provide African-American entrepreneurs with access to all three.
Credit Suisse selected just over a dozen entrepreneurs to participate in the program, including men and women in high-growth, global industries from around the country. Members include Troy Carter, founder and CEO of Atom Factory, an entertainment and music management company; Sheldon Gilbert, founder and CEO of cloud-computing analytics company Proclivity Media; Heather Hiles, founder and CEO of Pathbrite, a learning management system; and nine-time Grammy winner and entrepreneur John Legend.
The Entrepreneurs Circle includes three components—capital, curriculum, and community—to help its members fulfill their business aspirations. Launched by Credit Suisse’s New Markets business, whose goal is to advance financial opportunity among women, African-Americans, and the LGBT community, the Circle also seeks to address specific opportunity gaps that exist between minority and non-minority entrepreneurs.
“Data clearly shows that African-American business owners are underrepresented among all business owners and are generally underserved by large, global financial institutions,” said Pamela Thomas-Graham, Credit Suisse’s Chief Marketing and Talent Officer and Head of New Markets. “One of our goals is to begin to change that.”
Two data points are particularly relevant in supporting the program’s focus.
One, the Commerce Department has shown that minority business owners receive loans approximately 25% less frequently than non-minority business owners, loans that are about half the size, and loans that are over 100 basis points more expensive. Accordingly, the Entrepreneurs Circle will offer its members access to unsecured debt capital from a dedicated loan portfolio, with pricing at competitive rates. The curriculum aspect of the program is a complement to this, providing Circle members with access to industry expertise and to functional expertise on finance, operations, marketing and sales.
Two, according to the University of New Hampshire, only 7% of entrepreneurs pitching to angel investors are minority entrepreneurs, and 4% of angel investors are members of minority groups, implying that relatively few opportunities exist for minority entrepreneurs to convene. According to Thomas-Graham, this formed the foundation of the program’s approach to community. “Nearly every entrepreneur we’ve talked with in recent months has pointed to the need for more opportunities to meet other entrepreneurs of color, to exchange ideas, to build their networks,” she said. “That’s why we’re convening Circle members several times a year, to help them build bonds as a group.”
The Circle is small by design. Credit Suisse’s goal is to help each Circle member realize returns over the long term; the program’s small size will allow it to offer capital, curriculum and community in a highly focused way. Said Thomas-Graham: “We are focused on helping each member grow their businesses and make a lasting impact, which is only possible if we develop deep and meaningful relationships with them – not a one-off financing relationship. The curriculum aspect of our program really underscores this, since we are offering impartial expertise on a consistent basis.”
The presence of John Legend in the Circle raises a question: What resources does a world-famous artist lack access to? Thomas-Graham says entrepreneurs at any level of success can benefit from the Circle’s three-pronged nature. “You can be famous in one milieu and still face challenges crossing over into another,” she said. “Fame can surely improve your access to capital. But capital is a necessary but not sufficient condition for success. You need more than that, which is why our program has three C’s, not one.”
The bank is funding the Entrepreneurs Circle from its balance sheet, not from its foundation. According to Thomas-Graham, this is for a single reason: The Entrepreneurs Circle is a business proposition, not corporate philanthropy. “The entrepreneurs we spoke with wanted to understand what was in this program for Credit Suisse—what our motives were—and we have been transparent about that. We're committed to accelerating wealth creation in the African-American community, and we think working with talented entrepreneurs is an effective way to do that. We also want to grow our market share in the community, and this program will help us achieve that goal, too."
In other words, it’s a win-win opportunity: Circle members get access to new potential resources, and the bank gets access to new potential clients. “They won’t consider the program a success unless it helps them grow their business,” said Thomas-Graham. “And we won’t consider it a success unless it helps us grow ours.”