Qualitative interviews and entrepreneur survey

After completing the literature review, we conducted qualitative interviews with ICA alumni alongside a survey of entrepreneurs in California, entrepreneurs in the Bay Area, and ICA alumni. This gave us data points to understand the impact of ICA’s programs on the companies we work with, versus similar companies across our region. We were pleased to see that ICA businesses demonstrated, on average, higher revenues, higher wages, and better outcomes for women-led small businesses.The subsequent phases of research included interviews with ICA alumni and a survey that covered entrepreneurs in California, entrepreneurs in the Bay Area, and ICA alumni. This gave us data points to understand the impact of ICA’s programs on the companies we work with, versus similar companies across our region. We were pleased to see that ICA businesses demonstrated, on average, higher revenues, higher wages, and better outcomes for women-led small businesses.  

Integrating advising and investment is better together

ICA's integrated advising and investment model has real, tangible impacts above and beyond just coaching or just investment. OTC's research found that business growth was higher for companies that participated in both programs, rather than those that just did one. 

Capital seeking correlates to stronger growth

Furthermore, ICA being the first investor in a company has big implications on entrepreneur behavior. Through the literature review, existing research corroborates the hypothesis that capital drives business growth. Consequently, small businesses that are actively raising capital also tend to grow at a stronger pace than those who aren't looking for investment. Entrepreneurs who have gone through ICA programming and/or received investment from ICA are more likely than other entrepreneurs in California to seek capital (50% vs. 29%). 

‍ICA investments help founders secure additional capital

ICA alumni are also more likely to successfully raise capital from sources such as crowdfunding, government grants, venture capital, and private equity. This is backed by our performance from portfolio companies from Fund Good Jobs, our first $2.5M investment fund. This first batch of portfolio companies was able to leverage up ICA's investment — for each $1 investment by ICA, they were able to raise an additional $7 in external capital. Appetite to raise capital and access to non-extractive capital sources are both well-documented contributors to small business growth, and ICA helps build both pieces. 

‍Employees of ICA companies are more diverse, better paid, and more likely to get benefits

ICA companies are building good jobs in their communities. On average, ICA firms paid $5.43 more per hour to full-time employees and $2.27 more per hour to part-time employees when compared to similar Bay Area-based small businesses. They also have higher percentages of women staff and managers. The same applies to Black and East Asian staff and managers. ICA companies were also more likely to offer paid sick leave, professional development, and retirement savings programs. Our interventions are creating wealth creation opportunities for women and people of color above and beyond the status quo in our region.

Our takeaway: stay the course and keep accelerating diverse entrepreneurs

With this research initiative completed, we’re more confident than ever in the impact and effectiveness of ICA Fund’s integrated model of advising and investment to help entrepreneurs grow their businesses. We’re galvanized to stay the course and keep growing our model for deeply rooted, equitable impact. 

We recently gathered for a team retreat to look back on the first year of our 5-year plan, This was an opportunity to check our progress towards our goal of supporting 630 diverse entrepreneurs, including raising and deploying $25M in seed and growth capital to support Bay Area businesses – all with the goal to create good jobs and build community wealth. Our plans are ambitious, but they can be achieved with collective, consistent effort, and we’re happy to report that one year in, we are on track. To date in 2023, we’ve deployed $2.03M across 14 investments, partnered with 18 new companies in our Spring accelerator cohorts, and we kicked off Fall cohorts earlier this month.

Over the next month we’ll be charting the second year of our 5-year plan, turning our focus to improving our sourcing of companies, streamlining our impact evaluation system, and, of course, raising and deploying the new $25M fund.

Thank you for reading and learning more about our Levers of Wealth Creation research initiative. We welcome you to download and work with the research findings, and we welcome you to reach out and get involved with ICA — together we can build an economy that works for all.

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Ways to Get Involved:

Invest in ICA Fund

Volunteer as an Advisor

Learn about our Accelerators

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‍Illustration credits: https://storyset.com/illustration/business-growth/cuate; https://storyset.com/illustration/paralympic-athletics/cuate, https://storyset.com/illustration/business-growth/cuate; https://storyset.com/illustration/soft-skills/cuate

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ICA Fund accelerate great businesses through mentoring and investments to close the racial and gender wealth gaps. To learn more about impact investing practice and meet founders in our community, sign-up for the monthly ICA Newsletter.

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