Lilly MacEachern, AB, MBA ’09, has always cared about entrepreneurs, especially minorities and women who statistically have gained less access to mentorship and business loans. Her new nonprofit, Next Oak, fulfills this passion while also giving often overlooked entrepreneurs a head start.
The U.S. economy has reached a tipping point where small businesses are growing in number and clout. In 2016, U.S. small businesses experienced stronger sales growth, profitability and hiring. A new report by Babson College states that existing small businesses employ nearly half the workforce and account for more than 60 percent of the private sector’s net new jobs.
This trend excites Lilly MacEachern, who has long felt invested in the path (and success) of entrepreneurs. She was inspired by her father starting his own consultancy; she saw first-hand the struggles and successes of starting and running companies, through both her father’s company and his cross-industry clients.
MacEachern also noticed — when later advising startups and women- and minority-owned businesses — that many often struggled with accessing education, finding helpful mentors and raising the necessary seed capital.
When researching the issue, MacEachern found that due to a disconnect between the entrepreneur and the services/tools available, incubators and accelerators weren’t reaching (or meeting the needs of) minorities and women on three core levels: learning, capital and support — all essential qualities for a company to scale.
While women own 30 percent of businesses in the United States, these owners receive only 7 percent of venture capital funding. Yet women-owned companies perform three times better than S&P 500 companies. African Americans, who own 10 percent of American companies, receive only 1 percent of venture capital funding. MacEachern noted that this is surprising, given that racially diverse companies outperform industry norms by 35 percent.
“The general economy is moving toward small companies; more women are looking to start their own business and follow their passion,” MacEachern said. “But they lack the mentor-based system (and often the finances) to scale their companies to the next level and build something more tangible, more concrete, more sustainable. Minorities experience this as well.”
The data confirm this point. The National Women’s Business Council tracks almost 10 million women-owned businesses in the country. In 2012 (the most recent data available), they found that 89.5 percent of these businesses have no employees besides the owner, even when those businesses have receipts of up to $299 billion.
A Nonprofit to Challenge the Status Quo
Last November, MacEachern — along with friends Lenore Patel, Shivani Dhir and Lisa Nguyen — formed the board for Next Oak, a nonprofit accelerating talented women and minority entrepreneurs through directed learning and early stage capital. Already, they’ve applied for nonprofit status, with plans to develop proprietary content and an incubator pilot in the fall.
The goal: providing company founders (through a digital platform) with direct access to fellow peer cohorts within their industry; helpful mentors; shorter, more engaging educational content; and more flexible funding. “We saw these qualities lacking within other nonprofits — we are launching a platform that reaches women and minority entrepreneurs in the United States and all around the world,” MacEachern said. “We need to make it easier for women and minorities to start their own companies, and this venture helps fulfill that.”
An Ambitious, Not-for-Profit Venture
MacEachern and her board have high hopes for the nonprofit. At a recent Women in Business conference at the Tepper School, MacEachern shared the plans for Next Oak. One goal: providing a broad-based education for technical and non-technical needs through curated, tailored educational resources for people on the go.
She notes that typical online classes on financial education and other topics run around 45 to 55 minutes. Next Oak’s offerings include more bite-sized training, like a five-minute YouTube video offering core tips business owners need to get started as well as free webinars, live sessions and appointments with subject matter experts. Next Oak will also offer an online six-week cohort experience with lessons in generating ideas, identifying problems, fitting products to markets, segmenting customers, marketing and building teams.
An additional focus will be connecting entrepreneurs to financing options and providing select seed stage investment in startups. Next Oak will educate participants on financing options from bootstrapping, crowdfunding, and private and SBA loans to angel, seed and VC funding. The group will introduce participants to formal lenders, coach and prepare entrepreneurs to participate in pitch competitions, and raise funding via crowdfunding sites.
Helping entrepreneurs create partnerships and remain financially sustainable remains key. MacEachern finds that for startups, funding comes in the form of donations from friends and family and from crowdfunding platforms, along with grants, sponsorships and business competitions. When it comes to initial funding, cultural elements often come into play. For instance, a recent Bank of America study showed that 66 percent of Hispanic entrepreneurs received donations from friends and family toward launching their venture in 2016 — 29 percentage points higher than their non-Hispanic counterparts.
To help facilitate some of these goals, Next Oak plans is partnering with universities, incubators and other similarly minded organizations to reach more aspiring entrepreneurs.
Already, Next Oak is helping a small Pittsburgh group of musicians meet their goals: working with different artists in New York, finding alternative ways to distribute their label and gaining a better following on social media through a digital platform.
A Delicate Juggling Act
MacEachern still works full-time, as do the rest of the board members. “There is always this healthy tension: What do we absolutely need now? What can wait? What can we do more barebones? What needs to be built out more? We must make many small decisions on the fly. For the larger, more strategic questions, we discuss, decide, test and change as necessary. This strategy takes time but feels critical to ensuring we gain the essential feedback to continue building.”
But MacEachern feels invested and says her Tepper School training gave her the groundwork to multitask, stay focused, apply her qualitative and quantitative background, and underline a thoughtful approach through difficult challenges. “At business school, you’re always thrown curve balls, and that training has helped me tremendously.”
MacEachern continues to be inspired by sharing resources with the many people interested in Next Oak’s mission. “I work with different friends and people wanting to start companies. I see passion and people wanting to make an impact in their community through their venture. Partnering with them (and helping them meet their goals) is really fulfilling. That’s what it’s all about.”
Tips from the Trenches
For those wanting to pursue their own nonprofit venture, MacEachern offers the following sound advice:
Constantly be creative, resourceful and savvy. Building partnerships and finding experts is key. I’ve learned a lot from others, whether it’s tips on digital design, recommendations for speakers, or avenues to partner and collaborate.
Ensure you’re committed to solving the problem you want to solve. Many challenges will come your way, and perseverance and a clear goal will keep you focused.
Work with talented people and make sound decisions. Finding people with complementary skill sets and personalities remains vital and sets the tone and culture from the start.
Be efficient, but remain strategic and thoughtful. It’s a juggling act. Having the perspective of both long-term vision and short-term achievable goals will keep things moving.
Turn to a broad base of mentors for advice and guidance. Mentors can often articulate your thoughts and experiences even better than you can. Having that sounding board to summarize your question(s) or challenge(s) helps identify solutions more readily and formulate action steps more clearly.
by Debbi Gardiner McCullough