Young Money: How Inclusive Action is Cultivating Young Entrepreneurs

By Sharon Senko, Underwriting & Technical Assistance Associate

Creating a loan product tailored to young adults has long been a goal for Inclusive Action. For years we’ve observed the children of small business owners and entrepeneurs starting their own businesses – often offshoots of their family business – facing multiple barriers including a lack of credit building opportunities and startup capital, discrimination, and no safety net. Conversations with  local youth-serving organizations also revealed that there was a lack of financial literacy and access to healthy capital among the populations they served.  

Although young entrepreneurs have played an important role in stimulating economic growth (Verheul and van Stel, 2010), it remains difficult for them to obtain resources for launching or growing their businesses. This is particularly true in underinvested communities. At Inclusive Action, we work with entrepreneurs who are not able to obtain capital with traditional lenders. During the lending process, we ask ourselves what solutions and support systems can be built to get capital in the hands of entrepreneurs and change the perception that these loans are risky. 

This year, we had an opportunity to create a pilot program to address the challenges that young adult entrepreneurs face. The program, aims to address the lack of healthy capital, credit building opportunities, and business development opportunities for LGBTQ+, formerly unhoused, transition age foster youth, undocumented, low-income or justice involved young entrepreneurs.

Recognizing that this population was not one that we worked deeply with before , we spent several months speaking with leaders at youth-serving organizations, stakeholders, and young adults to learn more.  The purpose of these meetings were to:

  • Identify needs and challenges of the young adult populations we were looking to serve;

  • Receive feedback and guidance on the preliminary design of the program and loan product;

  • Develop relationships with referral and wraparound service partners; and

  • Ensure that we were building a program that added value or served as a natural next step to existing youth programs.

We are proud to announce the end result – Cultivate – a business coaching and leadership program designed to serve young entrepreneurs (ages 18-26) who have faced systemic barriers to securing economic stability and building credit. Key components of the program include:

  • Low interest loans (1%) of up to $10k, with a 3-year term and a working capital grant.

  • Cohort-based business coaching with monthly in-person, virtual, and one-to-one sessions on business topics, financial health/mindset, and wellness

  • Opportunities for peer-to-peer learning, networking, and mentorship

  • Travel stipend and funding for professional services

  • Access to wraparound services, such as housing assistance, healthcare and legal services.

Our goal for each participant is to:

  • Gain confidence in their business and financial knowledge;

  • Improve or establish a credit score; and 

  • Create a community of ongoing support and peer network as they continue on their entrepreneurial journey

Our Inaugural Cohort

Over a two-month recruiting period, partners at youth-serving organizations in LA County referred individuals whom they felt would benefit from the program.  We designed a low-barrier application process, with a short interest form and an in person meeting, to further discuss the applicants’ business, personal, and financial goals. While we knew from talking to partners that this program had welcome support, we didn’t expect the strong and positive response. 

We are thrilled to be introducing the first cohort of Cultivate! This amazing group of 15 passionate individuals are the driving force and heart of the program. Their participation and feedback will guide how we iterate and redesign Cultivate as we look beyond the pilot towards future cohorts (for which we already have a waiting list!).

An  intimate ‘Kick-off’ workshop was held at our Boyle Heights office in September. As we gathered for the first time, engaging and open conversations flowed, and participants expressed that beyond the capital component, the opportunity to connect, collaborate with, and learn from others from diverse backgrounds and experiences is just as important as monetary gains. This new generation of entrepreneurs is excited to invest in their businesses and have an impact in their communities.  We’ve heard this from them and we’ve seen this in our research — young entrepreneurs put more emphasis on minimizing environmental impact and maximizing social impact (Global Entrepreneurship Monitor, 2022) — and we are eager to work with them to achieve these goals.

Our Partners & Collaborators

We’re grateful to the many people who welcomed us as we stepped into the new territory of intentionally serving young adults. These experts shared insights and feedback as we designed Cultivate, and trusted us to support their young entrepreneurs.  Without them, our goals for this pilot would not have been attainable, and we are inspired by all the work they do to support youth in Los Angeles County.

Anthony Conley, Covenant House

Brittany Morton, Shanley Rhodes, Nancy Ruiz, Natalia Hernandez, and Yalonda Wade, Homeboy Industries

Helen Alonzo Hurtado and Lucia Torres, Las Fotos Project

Leanndra Martinez, Hollywood Homeless Youth Partnership

Monica Mariz and Mandy Litwin, LA LGBT Center

Rachel Stein and Natalie Garnica, Public Counsel

Deena Saunders-Green, MSW, Green Pines Media

Justin Mayo and Marveon Mabon, Watts Empowerment Center

Rachel Stich, Safe Place for Youth (SPY)

Alex Toutant, Defy Ventures

Ed Chang, In the Making

Jose Ibarra, Long Beach Community College

Vicky Gutierrez, Latino Equity Alliance

Enrique Campos, UCLA

Gabriel Ortega and Eba Laye, Whole Systems Learning

Gaudencio Marquez, Queer Mercado

Diana Diaz, Goddess Mercado

Patrick Ollawa, Levered Company

Interested in getting involved? We are looking for mentors, resource partners, and subject matter experts to add to our growing ecosystem of support. Reach out to Sharon Senko at sharon@inclusiveaction.org!

Inclusive Action