3C CAPITAL FUND INC.
Project Fish Tank
Providing investment capital to underserved communities
3C Capital Fund Inc. (3CCF) is engaging in a program to help close the wealth gap between individuals of color and mainstream America. 3CCF is a non-profit, minority owned and operated certified CDE (Community Development Entity). Through Project Fish Tank, 3CCF is taking a novel approach to providing equity investments to emerging entrepreneurs. The mission of the program is not the monetary return on investments usually highlighted in venture capital and angel investor programs. This program is targeted at producing successful business launches through a merger of capital funding and intense comprehensive technical assistance provided to each recipient of capital funding. The program described in this proposal will provide an economic development environment which will give the underserved low to moderate income community of color the hope they have waited for when considering seeking business ownership as a vehicle for improving their lifestyle.
While equity investments in the participating businesses are expected to result in positive ROI’s (return on investments), the targeted business industries will not be of the high yield variety normally sought by venture capitalist. Project Fish Tank will target the everyday small business enthusiast needing a capital infusion to help get a dream started. This program will seek to establish a 95% – 100% success rate in startup and operation of businesses that choose to access the funding available.
3C Capital Fund is seeking to establish an equity investment (seed capital) option for small businesses in low to moderate income communities. The service would be an alternative to existing small business loan options based on sound business plans rather than credit scores. The program would also include a requirement for businesses to participate in the business technical assistance options which will be offered in conjunction with the capital funding.
3C Capital Fund is proposing a hybrid solution incorporating some of the best parts of several programs. By combining them we can produce what we feel will address a problem which has a variety of aspects needing to be overcome. A successful program will require addressing more than the financial needs of most emerging business ventures.
3C Capital Fund Inc. (3CCF) is addressing a concern that is well established in the business industry. There are statistics available to demonstrate the difficulties encountered by populations of color and those in the low to moderate income communities when it comes to economic development and improving individual lifestyles. Populations of color have been ranked at the top of the wrong charts and indicators for a long time. When it comes to economic development and wealth building, business ownership has always been a key element to achieving those goals.
The Project Fish Tank proposal is designed to provide a much needed enhancement to assisting emerging entrepreneurs in launching and operating their business enterprises. The program will provide participants with the option of seeking an equity investment for needed capital instead of the traditional small business loan. The program will allow some negotiation by the participant regarding the variables of the investment. Qualification for the funding will be based primarily on the business plan and other elements of the business and little or no regards given to the credit score of the client.
Additionally, each participant that is funded would also be required to accept technical assistance from the program to aid in assuring a successful business venture. Since all clients will not need the same assistance, each participant will be evaluated to determine what assistance would be appropriate. 3CCF will be working with the regional Small Business Administration (SBA), the regional Procurement Technical Assistance Center (PTAC), the Center for Innovation and Entrepreneurship of Kern County (CIEKC) and the regional Women’s Business Center (WBC) to provide the technical assistance being offered to the clients.
As part of the negotiations engaged in with each funding recipient, determination would need to be made as to the length (term) of the investments, the return being offered by the recipient and the amount of equity being offered for the requested funding. We will not operate on a one-size-fits-all strategy. Our goal will be to make sure that we provide a program which will result in the best opportunity for success for every client and offers a reasonable return on investment funding.
Traditional small business loans impose an immediate burden:
The traditional small business loans require the fund recipient to start a repayment plan immediately after receiving funding, or shortly thereafter, which can add a stress to the business which would be detrimental to the success of the business. Equity investment payback can be set up to remove initial stress and allow the business to develop before any returns would be expected.
Traditional small business loans rely on credit scores which don’t always tell the story:
Traditional small business loans are heavily tied to client’s credit scores. The population targeted for this program have been challenged in obtaining and/or maintaining good or reasonable credit scores. Credit scores don’t always reflect a person’s business character. This proposal is concentrating on the soundness of the business plan and the character of the client participant rather than the credit score.
In an article by Jennifer Streaks, published May 18, 2018 and updated December 19, 2018 for the website “Make It” by CNBC.com, the term “Credit Invisibility” was presented with the following explanation:
“The current credit scoring model ends up eliminating many African-Americans, Latinos, and young people that are otherwise credit worthy, making them in effect “credit invisible.” Credit invisibility leaves a person unable to access necessities, since, besides homeownership, credit is used when a person applies for health insurance, car insurance, and even employment. When a person is credit invisible, it becomes harder for them get started, or to move forward after and respond to life’s challenges.”
Passionate entrepreneurs don’t always know when to ask for assistance:
3CCF is targeting a different business client:
As the execution strategy is to be implemented it should be recognized that this program is not intended to replace our clients use of business banking. Any business in steady state operations should have a good banking relationship with a local financial institute. Our program will help to position emerging ventures to get the foundation needed to establish a sound financial program.
As we build the clients business operations, we will encourage the establishment of a banking relationship early in the process.
Funding and Operations
Funding for Project Fish Tank will be primarily solicited from programs at the state and national levels seeking to promote economic and business development. The program itself will be operated via inhouse personnel with the appropriate professional skill sets. 3CCF will be using the services of a seasoned banker with over 20 years of experience in the financial industry to provide program oversite and direct daily activities.
The investment requests will be presented to an advisory committee by the individual clients as an initial step in the process. These requests will be in written form and reviewed on a monthly cycle. Clients who pass the first step will be asked to make an in-person presentation to the advisory committee. This is where they can answer questions and make a personal pitch as to why their project should be considered for funding. Clients who pass the second step will be invited for an in depth interview to go over in detail all of the requirements and aspects of the funding program. The program director and the advisory committee will get together to make the final decisions. Part of the final decision will be based on the presentation of the recommended business assistance for each participant and their willingness to accept that assistance.
3C Capital Fund Inc will be engaging programs and services from the following institutes and organizations in its implementation of Project Fish Tank:
- Small Business Administration (SBA)
- Kern Women’s Business Center (KWBC)
- Procurement Technical Assistance Center (PTAC)
- Small Business Development Center (SBDC)
- Kern County Black Chamber of Commerce (KCBCC)
- Kern County Hispanic Chamber of Commerce (KCHCC)
- Center for Innovation and Entrepreneurship of Kern County (CIEKC)
- Northern California Black Chamber Presidents Association (NCBCPA)
- LivePlan Strategic Advisory Program
We expect Project Fish Tank to provide the following benefits for our clients:
- An alternative capital funding option away from the traditional small business loans.
- A means of establishing a financial foundation which will allow strategic development.
- Developing financial leveraging for potential future business opportunities.
- Acquiring the business assistance needed to develop a successful operation.
- Establishing a business network to provide sharing of resources and ideas.
- Positioning for future opportunities and growth
- Increase the number of successful small businesses launched in target population.
- Start decreasing the wealth gap for the targeted population.
- Increase the job market created by the new business ventures.
- Have an overall positive effect on community and economic development.
3C Capital Fund Inc. is a nonprofit corporation dedicated to providing access to capital to low to moderate income businesses and community projects with emphasis towards providing access to capital to minority owned and/or operated enterprises. 3C Capital Fund Inc. has been certified as a Community Development Entity (a “CDE”) by the Community Development Financial Institutions Fund (the CDFI Fund) of the United States Department of the Treasury. (Control Number of Applicant CDE: 20NMC054097)
3C Capital Fund Inc. is minority owned and operated by a qualified staff of professionals with more than fifty combined years of industry experience. The years of banking and financial experience combined with the years of providing business technical assistance to hundreds of clients will prove to be a valuable asset toward making this a successful project.
We believe that Project Fish Tank will not only provide a valuable asset to the Central California area, it can be duplicated and/or expanded to be used in areas across the state and nation.