This Spotlight is authored by guest writer Caitlin Kelly as part of a special blog series by the Case Foundation featuring Be Fearless stories from the field. Follow along with us as we meet people and learn about organizations that are taking risks, being bold and failing forward in their efforts to create transformative change in the social sector.
For Sean Daniel Murphy, interim CEO of Inner City Advisors (ICA) and Managing Director of Fund Good Jobs, what goes around comes around. Murphy credits the mentorship he received early and often with who he is today — a visionary entrepreneur on a mission to help others realize their business goals.
“It always starts with the family values I was fortunate enough to grow up with,” he says. “My parents, aunts and uncles, a lot of people, really looked out for me and I was attracted as a result to change some things that weren’t right in my community. I wasn’t interested in nonprofit work per se, but when my mentor gave me a shot and opened a door for me at 21, he took a chance on me. Now I take a chance on others. Building people is the way I do business.”
In its first two years in existence, Fund Good Jobs, which provides the capital and support small businesses need to grow and create good jobs, has grown into a $2.35 million fund. The Fund has invested in five companies that have created and retained nearly 150 jobs, making a positive economic impact on hundreds of Bay Area residents. Over recent years, Fund Good Jobs’ founding organization, ICA, has overseen the growth of hundreds of local businesses that collectively have generated revenues of over $200 million and that employ more than 2,500 Bay Area residents.
The companies benefiting from Fund Good Jobs traditionally have had difficulty accessing capital, though they are all dedicated to creating what Murphy calls “good jobs.” The “good jobs” movement has grown significantly over the past few years. Murphy defines a “good job” as one that offers pay above a livable wage, provides access to health benefits and wealth building tools like a 401(k) plan, offers “life ladders” — opportunities to rise both personally and professionally — and has a culture that allows employees “to really enjoy” making a living there.
Key to the movement is a focus on small businesses, which are uniquely equipped to create good jobs. They have greater flexibility to hire those who have lacked access to quality employment opportunities. As active members of the community, they tend to hire locally and are less likely to ship jobs overseas. Collectively, thousands of small businesses across the country have the capacity to generate millions of good jobs.
One of the Be Fearless principles Fund Good Jobs demonstrates is being agile and creative in its assessment of risk and the way it structures capital offerings. By deeply engaging with a company, Fund Good Jobs can underwrite deals that traditional lenders and investors won’t touch. “Traditional notions of risk have really been prohibitive for these folks,” Murphy says. By providing “support and capital” to these businesses, he says “they in turn bet on people in their community.” His fund has made five such investments so far, “people I’ve known for four or five years. I know them well beyond their business plan.” And what he seeks in them is a quality that wouldn’t be visible on a typical balance sheet.
“Character is intangible and doesn’t carry as much weight as it could with local banks and local investors,” he says. But Murphy makes smart wagers, seeking out referrals from people whose values he shares, those new business owners working seven days a week and night shifts and the ones guaranteed to be fearless.
Firebrand Artisan Breads in Oakland is one such beneficiary. The new manufacturing plant has hired 45 staff members so far, with 15 more planned. They needed $1.8 million to grow their business, but couldn’t access a loan, stuck in what Murphy calls the “Valley of Death”— loans between $250,000 and $2 million — which are the hardest to obtain. Murphy’s financial acumen allowed Fund Good Jobs to create a capital stack, a combination of local and private investors, as well as a bank. In May 2015, the organization invested $600,000 in Firebrand to finance an expansion of the company’s baking facilities, as well as to help it open retail space at a development in downtown Oakland.
In October, the group finalized a $300,000 investment in Red Bay Coffee to enable it to open a new coffee bar and roasting facility in East Oakland. The two investments prompted an additional $1.6 million of growth capital from partners Murphy found.
Murphy’s board, led by Olukai CEO Jim Harris, encourages risk-taking too, but also offers significant input “to make sure we could continue making the bold bets we’ve made,” says Murphy. “They show us how to block and tackle. They’re constantly looking out for [our] blinders. It’s one thing to be fearless and take risks, but it’s another thing to have someone keep an eye out for you.”
Another Be Fearless principle that drives the work of ICA and Fund Good Jobs is that of reaching beyond one’s bubble. Murphy currently does this by cultivating key partnerships, including with local developer Michael Ghielmetti, founder and president of Signature Development Group. “Michael has been a key supporter of ICA-grown businesses that are creating good jobs in Oakland,” Murphy explains. Signature’s latest development is called The Hive, a retail block that now houses Firebrand Artisan Breads, Red Bay Coffee and Impact Hub Oakland.
“It’s an unlikely partnership because the temptation is to put in traditional tenants,” says Murphy. “But not only is he a supportive landlord, he’s invested in these companies and [has] gotten others to invest. It’s been a different way of doing business.”
Murphy credits Ghielmetti with pursuing community oriented businesses for his latest development. “It looks cool, but it wasn’t a conventional decision on his part. Most developers wouldn’t have partnered with us. When he asks us, ‘Do you need anything else from me?’ those simple questions are a lot bolder than people realize.”
How has Murphy and his team accomplished all of this in such a relatively short amount of time? Urgency is Murphy’s middle name. “I think our team would laugh if we tried to define a time that urgency drove us. We have to learn to balance that. We live at such an urgent pace every day. Our business owners don’t sleep — and we don’t either. It’s nights and weekends, and our relationships reflect that. I talk to our business owners every day at any hour for an advising session, whether that’s midnight or 5:00 a.m., if that’s what they need.”
When investing in underrepresented entrepreneurs or riskier business endeavors, Murphy knows that it takes more than a loan to make a business successful. The entrepreneurs need capital, but they also need social networks and a support system that can walk them through the process of growing their business. This holistic approach to building up businesses and creating good jobs is what sets Fund Good Jobs apart.
Murphy adds, “We have a phrase we use here – ‘Going all in.’ I’m inspired by it every day.”
Feeling inspired? If you’re ready to begin your own Be Fearless journey start by downloading our free Be Fearless Action Guide and Case Studies.
This post is provided for informational and educational purposes only. Any references to companies or investments do not imply endorsement by the Foundation.