Propeller: Helping local entrepreneurs rise with New Orleans’ revival

New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

New Revivalist: Andrea Chen and Propeller
Place: New Orleans, Louisiana
Happening now: A new Propeller initiative supports black-owned businesses in neighborhoods surrounding Propeller with low-interest loans of up to $100,000.
Follow: @GoPropeller

More than a decade after Hurricane Katrina, New Orleans is experiencing something of an economic renaissance, with new business starts out-pacing national averages for years. The benefits of revival haven’t been shared equally however, with many local businesses, particularly those with founders of color, left on sidelines.

Andrea Chen and the Propeller accelerator want to change that. In the aftermath of Katrina, in 2009, Chen and a group of friends took over and rebuilt the volunteer-run Social Entrepreneurs of New Orleans. By 2011, as executive director, Chen and her co-founder transformed the organization into Propeller, supporting nonprofit and for-profit entrepreneurs tackling social and environmental issues across the city.

Their strategy: support local entrepreneurs to solve local problems, namely, food, water, health, and education. How? Make sure their own staff and startup cohort pools reflect the diversity of the city, provide physical space for people to build companies, and provide seed financing many would-be entrepreneurs can’t access elsewhere. Propeller has supported close to 180 ventures and helped to create over 360 full and part-time jobs through its venture alums.

ImpactAlpha caught up with Propeller’s Catherine Gans, head of marketing and communications, to talk about shaping New Orleans entrepreneurial ecosystem.

ImpactAlpha: How does Propeller fit into the recovery underway in New Orleans?

Catherine Gans: There has been a lot of bubbling up of innovation for a long time, but especially for the past decade since Katrina. Propeller was founded in that wake. After the storm, Andrea founded Propeller with a group of volunteers. As she tells it, it was an effort to capitalize on both civic engagement and grassroots initiatives and all of the energy around rebuilding that was happening after the storm.

ImpactAlpha: How has Propeller evolved since its launch in 2009 and first accelerator class in 2011?

Gans: We separated into a startup accelerator and the growth accelerator so that we could serve both of those needs. There are people who are beyond idea stage who need support. Once you grow those initial ideas you also need to build an infrastructure to make sure that you are sustaining and retaining talent. Sometimes when you get a group of people in a room one person is coming up with a name and a logo and someone else is in their second and third round of hiring.

We also realized that if we’re going to tackle social and environmental issues, the real way to make systemic change happen is to zero in on issues where we feel entrepreneurs can really make a difference — where the city really needs us, and then try to build a critical mass of entrepreneurs who we can then connect to policy makers and business leaders in that sector. We now work specifically with entrepreneurs in food, water, health, and education.

ImpactAlpha: Propeller has been able to navigate civic interest groups, foundations and private investors and give everyone a seat at the table. How?

Gans: I think another really key step in our growth was that we started out working in a hallway in another co-working space in New Orleans. In January 2013, we opened our own social enterprise that was our own co-working space in a building. Having a physical space where we could bring people together, host workshops, pitch competitions, and also have a co-working space was really key to that ecosystem.

This past year, we launched a new program that only supports Black-owned businesses in the neighborhoods surrounding Propeller. We also launched a $1 million dollar low-interest loan fund this summer in partnership with a nonprofit out of our space. We’ll be making loans from $20,000 to up to $100,000 dollars with repayment terms of two to seven years.

ImpactAlpha: How has the entrepreneurial ecosystem changed over time?

Gans: The entrepreneurial ecosystem has gotten a lot bigger, and I’ve also seen organizations that may have been siloed in different areas like in academia or just strictly in business start to think more entrepreneurially.

There’s also just been more organizations and accelerators popping up. [For instance] the New Orleans Startup Fund, launched a program called Power Moves, and that’s an accelerator program specifically for entrepreneurs of color. There’s Camelback Ventures, which operates nationally, but has a headquarters in New Orleans.

I see a lot of organizations using each other’s spaces, so maybe moving out of Propeller or renting our space for their events. Having our space and opening it up to other organizations makes collaboration a lot easier, especially when we’re moving towards a common goal, like entrepreneurial inclusion.

ImpactAlpha: How do you ensure a real sense of black entrepreneurship and encourage the city to make those investments?

Gans: Data’s one of the most powerful ways to bring people over to the side of racial equity beyond a qualitative narrative. It is harder to convince people that racism still prevents people from starting businesses and getting bank loans. Then you show people a person of color is three times as likely to be rejected for a bank loan as a white business with the same credentials.

We do not begin hiring a candidate for a job and we do not begin selecting a class of entrepreneurs until the pool of candidates is representative of the entire city. It’s been really successful and has also made for just a better team and a better accelerator class because you get perspectives that are actually representative of the perspectives that exist in the city.

Recommended reading:

1) Racism Without Racists by Eduardo Bonilla-Silva
2) Between the World and Me by Ta-Nehisi Coates
3) Evicted: Poverty and Profit in the American City by Matthew Desmond

More from the New Revivalists:

• The New Revivalists: The people, places and policies reviving entrepreneurship — and the American…
• Derrick Braziel: Breaking down barriers for Cincinnati’s entrepreneurs of color
• Arlan Hamilton: The VC taking cold calls from underestimated entrepreneurs
• Margaret Bradley: Turning Philadelphia institutions into impact investors