Banks Get Behind East L.A. Incubator

0
Banks Get Behind East L.A. Incubator
De La Cerda

A general business incubator is coming to East Los Angeles, putting it in the mix of a trend that has already touched nearly every other area of the region.

This summer, the first batch of 15 businesses will enter a newly established business incubator at East Los Angeles College in Monterey Park. The incubator will be run on contract by Los Angeles-based business assistance provider OmniWorks, with a focus on women, minority, LGBTQ and veteran-owned businesses.

The first-year cost is projected at $400,000, with $150,000 of that coming from New York-based JPMorgan Chase & Co., another

$35,000 from San Francisco-based MUFG Union Bank, and about $100,000 from the college itself. (The remaining $115,000 still has to By HOWARD FINE Staff Reporter

A general business incubator is coming to East Los Angeles, putting it in the mix of a trend that has already touched nearly every other area of the region.

This summer, the first batch of 15 businesses will enter a newly established business incubator at East Los Angeles College in Monterey Park. The incubator will be run on contract by Los Angeles-based business assistance provider OmniWorks, with a focus on women, minority, LGBTQ and veteran-owned businesses.

The first-year cost is projected at $400,000, with $150,000 of that coming from New York-based JPMorgan Chase & Co., another

$35,000 from San Francisco-based MUFG Union Bank, and about $100,000 from the college itself. (The remaining $115,000 still has to be raised.)

The incubator, called Estec (a combination of “east” and “tech”), is the first such entity to serve the East Los Angeles region.

A spokesman for the Los Angeles Community College District said the organization is believed it to be the first incubator among the district’s nine campuses. The colleges have traditionally focused more on workforce training and not on growing businesses, but the district’s spokesman said this incubator could be a role model for other campuses.

East Los Angeles College President Marvin Martinez said demand for an incubator in the area has long been present, but only recently has the campus of 30,000 students pursued a more outward focus of providing economic development assistance to the community.

“There is much more of a comfort level now to see if the campus can meet other needs, specifically, how do we help to support small business communities in this part of town,” Martinez said.

Underserved entrepreneurs

The college will host a two-day “entrepreneur’s boot camp” next week for a select group of local entrepreneurs; that will be followed by a 15-week training course. Then, around August, 15 of these entrepreneurs will be selected to move into the incubator, which will be housed either in the campus technology or science building. The project will be overseen by Paul De La Cerda, East L.A. College’s dean of the Center for Entrepreneurship and Innovation.

Martinez said the focus on women, LGBTQ, minority and veteran-owned businesses came about because the school saw a general lack of resources for people in these groups on campus wanting to start their own businesses.

“We’ve seen increases in special populations at East Los Angeles College, from veterans returning to college to foster youth, formerly incarcerated individuals and even DACA (Deferred Action for Childhood Arrivals) students,” Martinez said. “We see a need for helping those populations feel they can use the skillsets they have to start any type of business.”

OmniWorks, the contractor that will operate the incubator, is a startup itself; the downtown-based company launched in late 2016 to provide business and support services for start-up companies. The college tapped OmniWorks to run the training sessions and business support services at the incubator because it originally concentrated on women and minority-owned businesses, according to company co-founder Brent Imai.

“We saw that women and minority

entrepreneurs were facing difficulties in growing their businesses because of a lack of

access to capital and business educational

opportunities,” Imai said.

Gradually, Imai said, OmniWorks

broadened that focus to other underserved groups, including veterans and the formerly incarcerated.

This is the first incubator that OmniWorks will help launch, he said.

Unincorporated East Los Angeles and adjacent communities have long been hotbeds of entrepreneurial activity as waves of immigrants have settled in the area, but there has been little in the way of organized efforts to assist these newly formed businesses – no general purpose incubators or even government-financed small business development centers exist in the region.

Two years ago, California State University Los Angeles opened a bioscience incubator on its campus just northwest of Monterey Park, but it’s focused on that specific industry.

There’s also TELACU, or The East Los Angeles Community Union, which has been an economic development force in the area since its founding exactly 50 years ago. But TELACU has mostly focused on providing capital directly to businesses, opening new businesses and on real estate development projects. It has generally not provided training and other assistance to existing businesses to help them grow.

“There’s a culture and environment of entrepreneurship that functions at the raw level, but the business and social infrastructure in East L.A. has not been strong enough to advocate for a business incubator to take those businesses beyond the small mom and pop storefronts,” said Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University in Westchester.

Guerra said one reason for this is the nature of immigrant entrepreneurs: they tend to rely on their own ethnic and cultural networks and not on institutional networks.

“You’re seeing this change now as the locally born children of these immigrants have come up through the schools and are more likely to want to take advantage of incubators,” he added.

East L.A. College’s Martinez concurred, saying there’s much more demand now for the services that incubators offer than there was a decade ago. He noted that two years ago, the college set up a pilot program to gauge interest in entrepreneur assistance services.

“The program filled up within two days, which showed just how intense the demand is,” he said.

Guerra said there is some concern about the incubator’s long term funding status, but that waiting for dedicated funding would be unwise.

“There is a need for sustained funds and revenue to make this a workable program,”

he said. “It’s tough to do year-to-year fundraising – that takes away energy from the operation. But often on something like this, it takes outside fundraising to get it started. The hope is that if it’s successful during the first year, more permanent sources of funding will

materialize.”

Martinez said the initial $400,000 funding target for the incubator is only enough to get the program through its first year. Once the program is up and running, he said the university will seek other private sector funding and grants to keep it going.

No posts to display