Earlier this month, Bad Girl Ventures, a local nonprofit that supports women-owned startups, started its first LAUNCH class, which is designed to help startups refine their business plans and get access to capital.
During the eight-class, 16-week course, the eight participants will get free advice from BGV’s network of successful women entrepreneurs and help from mentors with SCORE, a collective of business executives and specialists who volunteer to help small businesses succeed.
At the end, the participants will compete in a pitch contest, with the winners to receive a 6 percent, three-year loan from BGV.
The nonprofit revised its entrepreneurship courses soon after Nancy Aichholz, a former Chiquita Brands International executive and owner of her own carrot-cake business, became executive director last April.
Previously, BGV would hold two courses per year, with entrepreneurs at various stages of development lumped together in each one. But starting in September, BGV had its first EXPLORE course for novice entrepreneurs, in which 35 women developed basic business plans and worked on monetizing their ideas.
If they choose to stay in business, graduates from that course will move on to future LAUNCH classes. And starting in April, Aichholz said, BGV plans to offer GROW, a series of workshops for LAUNCH graduates and more advanced companies. Those might offer help with human resources issues, with finances or with the ever-changing tax code, she said.
Do these classes work?
According to BGV, since 2010, about 900 women have done BGV training, with about 200 of them going on to compete for loans. Eighty percent of those 200 are still in business. The U.S. Small Business Administration says that about half of small businesses fail after five years, and only one-third survive 10 years or more.
Rachel Roberts attended BGV training in the fall of 2015 after she had founded The Yoga Bar LLC yoga studio in Newport.
“It was like a mini-MBA program,” she said. “It gave me a chance to stop putting out the fires of day-to-day operations and work on the business. … I came out with a really bomber business plan.”
She used the $25,000 loan she won from BGV to leverage a $25,000 line of credit from her bank and help her build a second studio in Over-the-Rhine. She paid the loan back two years early, and now serves on BGV’s alumnae board, which works with graduates and also recruits speakers for classes.
In the past five years, BGV has made more than $650,000 in loans to businesses in the Tri-State and in Cleveland, where it has another office. The default rate is less than 1 percent, Aichholz said.
How do they keep the default rate so low?
By being selective about making loans. BGV has enough funds to lend $50,000 in the Tri-State and $50,000 in Cleveland every year, Aichholz said. Those loans go only to companies that have graduated from BGV training, which includes training in cash management, Aichhzolz said. “In theory, we only lend to people who are able to manage it,” she added.
Also, once a woman completes training, she still has access to BGV’s extensive network of connections in the business community, as well as other BGV alumnae. As Aichholz says, “Once a bad girl, always a bad girl.”
When Aichholz took over, she was concerned about the amount of loans that were past due — a few had “fallen off the radar,” she said. But there was a simple solution, she said — putting the borrowers on an automated, monthly payment system — and late payments aren’t a problem now.
Where does BGV get its funding?
According to BGV’s year-end financial report, the largest source of income in 2015 was $226,000 in grants, which amounted to about 80 percent of the total income of $286,000. Some of the larger grantors include Cincinnati-based Meshewa Farm Foundation, the Greater Cincinnati Foundation and the Duke Energy Foundation, Aichholz said. According to the report, the loan program generated $7,000 in interest income.
According to the report, BGV finished the year with $410,000 in assets and with $44,000 more income than expenses.
Is fundraising difficult?
Yes, Aichholz said, because although BGV is a nonprofit, its cause doesn’t “tug at the heartstrings” like other causes. It’s also a challenge because the organization has big fundraising goals, but only two full- and one part-time staff person in the Tri-State, and one full-time employee and two part-time contractors in Cleveland.
By May, BGV hopes to move into its new Covington office, the former Tanino’s Café at 114 Pike St., which is now under renovation. It’s next door to UpTech, where BGV has its current Covington office. BGV also has an office in the Hamilton County Development Center in Norwood.
Within the next five years, BGV plans to open offices in other markets, Aichholz said, probably in cities within an easy day’s drive, such as Louisville, Lexington, Indianapolis or Columbus. How quickly that can happen will depend on – you guessed it – fundraising.
“We’re all excited that … we now have time for a strategic fundraising plan,” Aichholz said. “We can offer more to sponsors now, whatever they might need or want.”