T.E.A.M.
Twin Cities, Southern California, and North Carolina
Challenge
Tools for Equitable Acquisitions in Manufacturing (T.E.A.M.) is a partnership between three innovators in economic equity–Urban Manufacturing Alliance, Concerned Capital, and Common Future–that help retiring owners of manufacturing firms transfer ownership of their businesses to employees and people of color, generating wealth in historically disinvested communities. The T.E.A.M partners identified a critical and previously unaddressed gap in these transitions: the Community Development Financial Institutions that often finance them do not have the knowledge needed to identify and support these complex transactions.
To bridge this gap, T.E.A.M. developed a cohort training program for CDFI leaders. Before they launched it, they needed feedback from experienced practitioners to guide the creation of an effective and meaningful curriculum. They contracted with Community Allies to design and lead a discussion with a group of practitioners with experience in business transitions, including CDFI leaders, funders, leaders of community development organizations, and owners who had successfully sold their companies to employees and local people of color.
Approach
Community Allies’ approach emphasized harvesting the collective knowledge of participants by gathering stories based on their varied backgrounds. The attendees were diverse in experience, ethnicity, race, gender, geographical location, age, and political affiliation; including a DC-area business owner who experienced the lending process as a woman of color; a white banker based in southern California who came out of her retirement to work on succession; the Black leader of a major CDFI; a white Maine-based manager who works with business transition in the rural northeast; and a white manufacturer in Texas who has successfully transitioned his business to employee ownership. We guided participants through questions designed to evoke a thoughtful exchange of ideas, encouraging them to reflect on their experiences with both successful and unsuccessful business transitions. The lively discussion that ensued was grounded in a shared belief in the importance of business ownership. With Community Allies’ experience as facilitators and as equitable economic development practitioners, we were able to pivot as the group discussion turned toward the specific barriers to business acquisition for business owners of color, including the lack of generational wealth, racism in lending practices, the lack of support systems for aspiring owners, and education for both sellers and potential buyers. The group agreed that the most necessary supports are financial education for potential buyers, a team of experts to ensure the process goes smoothly, diversification of capital products, and investment in larger-scale change in finance and ownership. As one participant put it, “Racial equity means that we need to collectively understand as an industry that not all the steps are available and we need to make them accessible.”
“Ellen engaged very disparate stakeholders in a quickly-paced roundtable, navigating a complex subject with thoughtfulness and grace, and utilizing her expert facilitation skills to support our work. I recommend her full-heartedly.”
Results
T.E.A.M used the results of the focus group to refine their CDFI training curriculum, ensuring it was firmly grounded in the realities of the people doing the work on the ground. Key topics included the legal and financial intricacies of transition deals and the personal and managerial considerations of business transfers. The 24-week training was launched in September, 2022, with an initial cohort of four CDFIs in three regions: the Twin Cities, Southern California, and southwest North Carolina. The information Community Allies gathered in the focus groups brought T.E.A.M closer to their goal of successfully transitioning ten manufacturing businesses in each city.
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