Several years ago, Andrea Chen was working in a hallway at Propeller, a business incubator that helps entrepreneurs nurture ideas focused on solving economic and social issues facing New Orleans.
Now, the nonprofit Chen co-founded almost 10 years ago has 26 full-time employees and operates in a 10,000-square-foot office in Broadmoor that was previously a rim shop. The shared work space enables cross-collaboration. As many as 100 people work out of Propeller’s office some days, helping each other stay motivated and productive.
Through initiatives such as pitch competitions and accelerator programs that match entrepreneurs with free co-working space and expert advice, Propeller has largely worked to lift small businesses and nonprofits trying to tackle civically-minded issues, like disparities in access to quality food, water, health and education.
Since its first business accelerator program in 2011, Propeller has graduated 200 entrepreneurs, whose ventures have generated more than $100 million in revenue and financing and created more than 460 full- and part-time local jobs, according to the nonprofit. The programs are tailored to early-stage startup and growth-track ventures, with a more recent program aimed at lifting small neighborhood businesses in its surrounding area.
The group’s South Broad Business Initiative, a free six-month program, connects minority-owned businesses with mentoring and expert support in areas ranging from marketing to accounting and legal advice.
That push, which started last year, addresses a need in the community that Chen said was apparent: People would just stop by Propeller's office and ask for advice.
“We really wanted to be better integrated in our surrounding community,” Chen said. “We thought, 'What's the best way for us to be a better community partner?' And we decided that there’s the thing we’re really good at: we’re good at accelerating businesses. That’s what we do. We wanted to have that be something that we could offer to our neighbors.”
At a private lunch Friday to celebrate the past decade, Propeller is slated to highlight recent successes and announce the initial recipients of a recently-launched $1 million loan fund. It will offer below market-rate loans, ranging between $20,000 and $100,000, to socially-minded entrepreneurs, who are ready to take the next step in their business.
Propeller relies primarily on grants, and received roughly $1.8 million in 2017, the bulk of which was from foundations. Its total expenses that year were roughly $1.7 million.
But what makes Propeller unique in the realm of business incubators is the tilt toward backing entrepreneurs focused on improving social disparities.
Last month, Propeller announced its latest crop of 22 businesses that are joining its startup accelerator for three months and are focused on addressing inequities in New Orleans’ food, water, health and education systems. The ventures include Bailey’s Grocery and Market, a Lower 9th Ward grocery store that offers fresh-food options, and the Mastectomy Boutique, a local health care boutique that caters to breast cancer survivors after mastectomy surgery.
Despite the recent national buzz about New Orleans becoming a hotbed for entrepreneurial activity in the aftermath of Katrina, some observers, including Chen, point to recent statistics that signal the groundswell of new business activity has not always been equitable.
While 36 percent of New Orleans’ businesses were minority-owned in 2012, the businesses captured only 2 percent of all receipts, a rate that has remained stagnant for decades even while the share of minority-owned businesses has increased, according to research by the Data Center.
“It says to me that we’ve got some issues here,” Chen said. “This is not an equitable entrepreneurship ecosystem.”
The business accelerators could be one piece of trying to shift those statistics. The programs are individually tailored. When entrepreneurs are accepted, they work with Propeller staff to analyze what they’ve already done and what they hope to accomplish, the challenges they’ve faced and their short- and long-term goals.
For some, that can vary as much as getting their first paying customer to hitting a certain revenue target. “It’s really different for each entrepreneur,” she said, “so the strategies and tactics to get to those things are really different.”
When Libby Fischer, CEO of Whetstone Education, participated in Propeller’s inaugural growth accelerator in 2016, the experience helped her “really understand the numbers” behind her business, which helps schools capture and track teacher data to improve and personalize professional development.
“That was the piece that was missing,” she said.
In the past four years, Whetstone has grown from serving about 30 schools and generating revenue of less than $100,000 to signing up more than 950 schools and having $2 million in revenue, she said.
“It just really felt like a huge advantage to have exposure to that through the curriculum,” she said. “It would’ve taken a lot longer if I had done it on my own.”
Despite the recent shift to help bring more of the surrounding community into the fold, Chen said there’s still plenty of demand for assistance for both early- and growth-stage entrepreneurs.
“We haven’t gotten to a tipping point yet, so I think there’s a lot more work to do there,” she said.