We Power Team

WEPOWER execs (front row) Keisha Mabry-Haymore holding daughter Zari Haymore and CEO Charli Cooksey. (back row)  Edgar Payano and Yoni Blumberg. WEPOWER hopes to make residents of North St. Louis partial business owners. 

WEPOWER, a St.Louis based nonprofit devoted in part to building community wealth, is launching an investment fund that organizers hope will someday see community members as equity owners in “thriving” companies located in, or committed to hiring residents from the much-neglected North St. Louis area.

The $1.5 million investment fund, Elevate/Elevar Capital, is a sister program to the Elevate/Elevar Accelerator, a 6-month entrepreneurship development program for Black and Latinx business owners, with a particular focus on North St. Louis. 

Officials at WEPOWER hope to use the fund -- which also will target Black and Latinx business owners -- to begin to reverse what activists refer to as generations of systemic divestment and value extraction from the heavily-Black area.

“We believe it's beyond time for Black communities to self-determine how resources can and should be used in service of their future,” said Charli Cooksey, founder and chief executive of WEPOWER, seated in her living room in the North St. Louis neighborhood that’s been her home since she was a toddler.

“For us, this is almost an experiment in what we hope becomes a new normal... 

“It's time to shift the paradigm that, honestly, a group of old wealthy white men, who tend to have all the wealth, have all the knowledge to determine how resources should be used in Black and brown communities.

Seated on a plushy sofa nearby was Yoni Blumberg, vice president of community wealth building for WEPOWER.

He noted that parts of North St. Louis are seeing a burst of investment, much of it via the under-construction campus of the National Geospatial Agency.

While he applauds the increased investment in the area, Blumberg notes there is “no guarantee that the people who live in those neighborhoods, inherently or automatically prosper from that development.

“We think it's critical to create avenues and vehicles and structures for community [to] be benefiting more directly from that development and that prosperity,” he said, “and so this is our effort towards that end.”

While WEPOWER has been involved in helping entrepreneurs find appropriate funding through outside sources, this is the nonprofit’s first time raising the capital, making the investment decisions and “operating the whole thing,” he said.

“We're open to investing, without any equity stake,” Blumberg said, “or with an equity stake, where we would have a minor share in the company that then we would transition to community ownership in the long run.”

Blumberg and Cooksey concede there are a host of thorny specifics -- who exactly has ownership rights? What about their offspring? What’s the legal structure? What are the tax implications of ownership? -- remaining to resolve before WEPOWER can realize its broader vision for community ownership and management.

For now, both the fund and the specific mechanics for ensuring community ownership are a work in progress.

Elevate/Elevar Capital is focused on businesses that already have a revenue track record, averaging from $60,000 to more than $1 million a year.  Each selected business could reap an investment of up to $200,000.

WEPOWER has signed investment agreements for most of the $1.5 million, including a $500,000 investment from Living Cities, a coalition of 19 leading foundations and financial institutions that work together to fight poverty in U.S. cities.

Cooksey would like to see the fund grow to at least $15 million so that the nonprofit could be “more aggressive” with its investing.

WEPOWER is not alone in investing in entrepreneurs of color.

In March, banking giant Goldman Sachs, in partnership with Black women-led organizations, financial institutions and other partners, said it will commit $10 billion in direct investment capital over the next decade to address the “dual disproportionate gender and racial biases that Black women have faced for generations, which have only been exacerbated by the pandemic.”

San Diego-based Founders First plans to invest to help more diverse-led companies, and underrepresented founders grow their businesses and make it onto the Inc. 5000. Funding for this program was bolstered by a $1 million grant from the Rockefeller Foundation and Founders First Capital Partners’ recent $9 million Series A financing.

Still, Blumberg said he is aware of only a few other investment funds that involve the democratization of investing through community ownership.

One example of a group doing similar work is the Boston Ujima Project, which has a democratically managed fund, Blumberg said. There's also the REAL People's Fund in the Bay Area, “which is on our radar,” he said, adding, “we're still looking into that.”

WEPOWER also hopes to see the community -- largely in Wards 3 and 21 including the neighborhoods near Hyde Park, Fairgrounds, and O'Fallon  -- benefit through employment opportunities in the fund-backed businesses.

“We work with some businesses that aren't located in North City, and we ask them to commit to either locating there or prioritizing hiring people from this area,” said Blumberg. “That’s ...a step towards that ultimate vision of building a thriving business community in North City, that is ...creating living-wage jobs and generating returns that can be shared and managed with and by the community.

“Good quality, family-sustaining, living-wage job creation, with low barriers to entry -- [jobs that don’t have] a bachelor's or a master's as a requirement -- has been a priority for us from the beginning of our work involving entrepreneurship,” Blumberg added. “It is something we thought about in the design of the accelerator, as well as continue to think about in this new work with more direct investment.”

How will the fund ensure that the skill sets of the North St. Louis residents match the needs of the funded entrepreneurs?

“I think part of the answer is that we're not exclusively focused on the types of companies that venture capitalists invest in,” he said. “We're not exclusively focused on tech-enabled companies that need software engineers or  life sciences and biotech companies that often need people with PhDs or master's degrees.”

That means investing in more low-tech companies, such as a coffee shop, or a business that focuses on natural beauty and wellness services -- jobs that often don't pay enough to be truly living wage.

“So I think the thing we're working on is threading the needle or finding ... jobs that can then grow to be living-wage and family-sustaining jobs,” Blumberg said.

“And so that includes a specific commitment to ... both people and place. And part of a commitment to people includes the commitment to paying living wages or putting people on a pathway toward living wages.”

Despite the challenges inherent in crafting a new ownership model, Cooksey said the team remains undaunted.

“I actually think this model is a lot easier, although it's a lot more foreign, because community folks who are impacted by economic decisions finally get to decide how to use the resources and to support their best interests,” she said.

Added Blumberg: “We are interested in both worker and community ownership. We want to create a pathway to eventually get to partial community ownership of businesses, so a community fund (or funds) directly share in the profits of businesses in the community.

“We may not achieve that in this first pilot fund given the complexity involved,” Blumberg said. “But we intend to keep working on the concept regardless and hope to turn it into a reality.”

Karen Robinson-Jacobs is The St. Louis American / Type Investigations business reporter and a Report for America corps member.

 

 

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