Systems to Serve More and Different Kinds of Entrepreneurs
Nationally, too much emphasis has been placed on creating systems that support only the most scalable businesses. Major market incubators rely on high-risk, high-reward models for sustainability. They embrace the strategy of venture capital, which is willing to lose nine times out of ten, and cover their losses with one big win.
This practice creates a false choice for entrepreneurs and skews the narrative toward large-scale economic development. It forces smaller, thoughtful companies with solid business plans to adopt unrealistic revenue models that require a return of 10 times the initial investment, and this is the only way they can secure institutional investment. It ignores companies that can return two, three, or even five times the initial investment, because these return rates do not fit the traditional investment pattern.
Regardless of initial size and scalability, businesses are the economic backbone of our communities. Our incubation model is being built from the ground up to provide more opportunities to a wider range entrepreneurs who can sell product and still turn a profit.
That’s it. That’s all we care about.
You Will Know What We Know and What We Learn
Work Hard Pittsburgh is committed to transparency in all aspects of our business incubation services including, but not limited to:
- Finances and Salaries
- Applicant Selection Criteria
- Criteria for Fundability
- Disbursement of Capital
- Preferred Vendors and Rates
Additionally, we will publish a series of white papers on the uptake of our first incubation classes, as well as on its levels of success. These white papers will serve to guide other organizations interested in responsible and inclusive economic development.
Social Impact Investing
Work Hard Pittsburgh deploys social impact investment vehicles wherever there is entrepreneurial density. We believe that meaningful economic development requires a close examination of the entire region, and such an examination must include the capacity of the people in our neighborhoods. In 2016, we will be launching a series of test funds, attached to different types of entrepreneurs residing in the City of Pittsburgh neighborhoods that need reinvestment. Investment vehicles will then be attached to underserved classes of entrepreneurs.
Our social impact investment vehicles have targeted returns of 2x over a five year period. Our commitment is to provide a modest return to investors interested in seeing their wealth leveraged for broader economic gains, while protecting the interest of the entrepreneur. Furthermore, Work Hard Pittsburgh does not take equity in the companies we serve. Our sustainability comes from other areas of focus like the digital services that we provide and the code academy also launching in 2016.
Cooperative Ownership and Why it Will Work for You
As a community-owned business incubator, Work Hark Pittsburgh seeks to build local wealth, create quality jobs, and help bring meaningful and positive economic improvements to our neighborhoods and region. Cooperative ownership as a business model builds from a base of patient capital, social entrepreneurship, provides ongoing training and business incubation with long-term goals in mind, offers strong and effective management, and insures good governance through direct member involvement at all levels. The immediate benefits for you and your business are:
- financial thresholds for membership that are set at gentle and welcoming levels
- minimized risk by spreading it through the cooperative, and through the use of shared creativity and resources
Become Part of the Team and a Stakeholder in Ownership
Once you’re part of the team, Work Hard Pittsburgh’s commitment to serving your entrepreneurial interests becomes tangible. Founders of businesses that participate in our incubation process vest after 1 year in the system. At that point, they are awarded an ownership stake in Benefit Corporation Certified, Work Hard, LLC. Starting in 2017, members will take part in cooperative governance. Our model rewards the financial confidence our entrepreneurs embody when they join Work Hard Pittsburgh.
Becoming a stakeholder and owner makes you a valued co-creator of the vision, direction, and future of Work Hard Pittsburgh, our community, and our region.