OFN commits to launch Venturize to equip small business owners with the information they need to access responsible, affordable capital. In todays rapidly growing but unregulated online lending marketplace, borrowers who have historically faced barriers to capital have more options, but may take on loans with hidden fees and high APRs that can devastate their businesses. The Venturize online platform provides small business owners with clear, trustworthy information and mobile-friendly tools to compare their financing options or prepare a loan application. By 2017, with support from Sams Club Giving Program, OFN through Venturize will engage 250,000 women small business owners and small business owners of color under the age of forty to make more informed loan decisions and secure commitments from 10 for-profit entities to promote the mission of ensuring responsible and transparent capital to small business owners. In addition, OFN plans to launch an online technical assistance (TA) program by the end of 2016 that will aim to reach 1,500 small business owners.
In conducting focus groups and research, OFN decided to target small business owners under the age of 40 who are people of color or women. It was found that while a couple of resources exist for small business owners, there is no service that targets younger entrepreneurs, even though this group comprises the majority of new small businesses.
OFNs commitment is divided into three phases: the pre-launch of the campaign, the launch, and the post-launch.
May 2016: The pre-launch includes all the work that is necessary in order to create a useful mobile-enabled campaign platform by the end of May. The first milestone in this work is the launch of Venturize and a live campaign website by the end of May.
May August 2016: The second phase is the launch period. This is the period that runs from the website becoming live to the first two months of the campaign. In this period, OFN will be maximizing social channels, working with partners to promote the campaign, implementing both a national paid and earned media strategy, and increasing our visibility at national events including the political conventions. The key performance indicators that will be monitored during this period, are impressions, click-throughs to the website, and number of discrete actions taken on the website or mobile device.
September 2016 December 2017: The third phase is the post-launch period. During this period, it is necessary to keep the interest and attention on the issue. This will be achieved by increasing legislative outreach, using our newly formed corporate partnerships, increasing media outreach, and leveraging existing conferences and events. By the end on 2016, the goal is to have reached at least 150,000 small business owners under the age of 40 who are either people of color or women and reached 1,500 small business owners through technical assistance.
Throughout these phases, there will be optimization based on what is working and what is not working. This campaign is meant to be responsive to the needs of small business owners and will be adapted based on the feedback that is received.
According to the SBA, there are nearly eight million small businesses owned by people of color and over nine million owned by women. These businesses help power their communities, but minority and women entrepreneurs struggle to obtain the credit needed to start up their businesses or keep them going. Women entrepreneurs start companies with 50% less capital than male entrepreneurs and, according to a study conducted by American Express, minority business owners are denied loans at nearly three times the rate of non-minority owners.
Today, an influx of unregulated, online lenders promises small business owners quick-and-easy cash. They rarely disclose the hidden fees, sky-high interest rates, and prepayment penalties that can quickly drive a small business, out of business.
According to a recent survey by seven regional Federal Reserve banks, 20 percent of small business owners applying for a loan or line of credit within the past year sought credit from an online lender. While 75 percent received at least some credit from these online lenders, only 15 percent of the approved businesses reported being satisfied.
The rapid rise of these unregulated, online alternative lenders provides an unprecedented but confusing variety of financing options; many of them designed more to help lenders profits than to help small businesses succeed.
To be successful in engaging 250,000 small business owners of color and women entrepreneurs under the age of 40, OFN seeks financial resources, media support, and strategic corporate partnership. CGIs longstanding history in changing lives underscores OFNs mission to provide opportunity for all, especially through Venturize. Additional financial support would allow Venturize to fulfill its mission beyond the initial two-year projected funding and build upon developed tools to better inform and protect more small business owners. CGIs leadership in implementing strategic corporate partnerships would strengthen Venturizes brand and value proposition, positioning the initiative to combat well-known irresponsible online lenders. With media support from CGI, Venturize will be able to exceed its goal to engage 250,000 small business owners to strengthen more communities across the country.
OFN offers partners the opportunity to use the loan tools created on Venturize, the ability to use the research and focus group findings on how small business owners, particularly women and people of color, borrow money from lenders, and learnings on best practices for messaging, outreach, and impact for this demographic.