entrepreneurship : Innovation + Job News

If I were running this business, what would I do differently? It’s a question most restaurant, café or bar staffers have probably asked themselves at some point in their careers. Last year, a group of Philly entrepreneurs came together to answer it for themselves.

In summer 2014, six Philadelphians began to take a serious look at developing a cooperatively owned and operated bar and restaurant. One has since left the venture, but five service industry veterans remain to run Spring Garden Street's W/N W/N Coffee Bar: Will Darwall, Michael Dunican, Max Kochinke, Alden Towler and Tony Montagnaro.

The crew soft-launched the location at 931 Spring Garden in December of last year, and held a grand opening in late January 2015. Since then, the five coworker/owners have been experimenting with their model in a democratic government-by-consensus process (they have three additional employees who are not partners in the business).

Chatting with Flying Kite about their first year in business, Darwall says the ownership model is based more on "sweat equity" than the capital brought to the venture (that capital was treated as third-party loans, and does not entitle the owner-investor to a greater share of the profits). Each of the five owners works multiple shifts each week cooking, serving, bartending, busing tables or performing maintenance.

"What worker/ownership gives us is equal legal ownership over the company, which means a right to participate in decision-making and a right to accrue profits from the business," he explains. "The way that we pay out those profits is proportional to how much work we all do, counting the hours up.

"We thought that coming together and working as a cooperative, we’d be able to create a structure where we could support each other…and use our collective creative energy and potential to come up with good solutions to the problems we faced, rather than feeling frustrated about things that we thought could go better."

W/N W/N's menu features local, sustainably sourced foods, with a focus on canning, preserving and pickling. (Ed: Flying Kite recently held a meeting there and the food was phenomenal.)

The innovative business model extends to the customers: patrons can buy membership shares. They run $25, and each time the member buys something, 25 percent of their bill is deducted from that pre-paid fee – meaning that W/N W/N members infuse the business with $25 up front, and then receive that money back as they pay only 75 percent of the purchase price on any given item.

Darwall estimates that about 10 percent of the café’s customers have bought into the membership model, and that’s fine for now -- as the founders tinker with their business plan and assess what worked and what didn’t in their first year, they’ll continue to explore what kind of cooperative model might thrive going forward.

W/N W/N will be scaling back its food menu beginning in January, though food service will still be on offer. It currently opens at 5 p.m. Monday through Friday, closing at midnight every day except Friday and Saturday, when it’s open until 2 a.m. The doors open at 10 a.m. on Saturday and Sunday for brunch.

Follow all our work #OnTheGroundPhilly via twitter (@flyingkitemedia) and Instagram (@flyingkite_ontheground).

On the Ground is made possible by the Knight Foundation, an organization that supports transformational ideas, promotes quality journalism, advances media innovation, engages communities and fosters the arts. The foundation believes that democracy thrives when people and communities are informed and engaged. For more, visit knightfoundation.org.

Writer: Alaina Mabaso
Source: Will Darwall, W/N W/N Coffee Bar

In December, the Enterprise Center (TEC) in West Philly announced a special program to augment their 25-year mission: giving local women- and minority-owned businesses the tools they need to grow. TEC is one of only seven organizations nationwide -- and the only one in Philly -- chosen to receive over $1 million in federal funds through the U.S. Small Business Administration's ScaleUp America Initiative.

According to TEC, ScaleUp provides "growth-oriented" small businesses with a targeted twelve-week curriculum and six months of one-on-one mentoring from experts aimed at developing a three-year strategy. TEC narrowed the field of applicants down to 25 businesses featuring minority owners or executive managers.

Iola Harper, TEC's executive vice president of business programs, says that the companies served by TEC and ScaleUp America are often "sandwiched" between early startups "in the idea phase" and large firms that can attract venture capital. To qualify for participation in the ScaleUp program, businesses had to have local impact and have proven themselves in the market via $150,000 to $700,000 in annual revenue.

"We call them scalers," says Harper, and they are often neglected in the venture capital world.

One marker of companies like this is a relative lack of managerial experience, in addition to inadequate access to capital and technical assistance.

"I find that these businesses tend to work in their business and not on their business," explains Harper. "So this program forces the participants to step out of their businesses," encouraging management to look at the big picture: business goals, scalability and understanding the numbers.

The ScaleUp initiative is a mentoring curriculum, but another component of working with TEC is the access to capital. The organization can make in-house loans of up to $200,000 to qualified participants, and if a business’s capital needs exceed that, there are banking partners on hand.

Harper is excited about "the fact that these are all local or minority-owned firms, and they’re typically the pool that has the hardest time accessing these services that we’re offering."

That difficulty is two-fold: Not only does TEC focus on women and minority entrepreneurs who get a smaller percentage of America’s venture capital in general, but it also targets companies outside of the tech and pharmaceutical realms. Current ScaleUp participants include food, manufacturing, personal service and construction businesses.

TEC is focused on ventures that "bring a lot of social capital to our community," enthuses Harper. "They bring a lot of intellectual capital to our community, and most of all they bring jobs to our community."

Writer: Alaina Mabaso
Source: Iola Harper, The Enterprise Center
 

The dictionary defines polymath as "a person of great learning in several fields of study." The term has been widely applied to Benjamin Franklin. Looking at his resume, it’s not too much of a stretch to apply it to Dr. Keith Leaphart.  

At only 40, Leaphart is a physician, one-time congressional candidate, philanthropist and serial entrepreneur (commercial cleaning, events planning and, like Franklin, printing.) Speaking in December at the University City Science Center’s Quorum, Leaphart described himself as a "physician by training, an entrepreneur by birth."

The Philadelphia native started selling candy -- in a self-described "dodgy scheme" -- in middle school. By the time he got to medical school (he simultaneously earned an MBA), he was running a commercial cleaning service whose major client was Gerry Lenfest's Suburban Cable, a little company that sold to Comcast in 2000 for $6.7 billion. 

It was the start of a long affiliation with Lenfest.

"If I hadn’t dumped [his] trash every day, I definitely would not be here," says Leaphart.

Today, he is chairman of The Lenfest Foundation and serves on the board of Philadelphia Media Network, the parent company of the Inquirer, Daily News and Philly.com, which is owned by Lenfest.

He also continues to work weekends on-staff at Bryn Mawr Hospital.

But his life as an entrepreneur was the focus at Quorum. Leaphart -- who says a key to his success is an ability to catnap anytime, anywhere -- acquired a long-established printing company in 2009 in the depths of the recession.

"It wasn’t about buying a print shop," he recalls. "It was about getting into the digital economy."

Leaphart rebranded the company as Replica Creative, moved it to larger quarters and, in 2013, opened a second location in the Science Center’s 3711 Market Street building. It boasts modern interior design, event space and a coffee bar.

"It’s like a high-end Kinkos and Starbucks on steroids," he says. 

Providing coffee and comfort food helps maintain a steady flow of traffic and provides a place for clients to meet and commission design and production work. 

This month, Leaphart is launching his latest venture wallsome.net, an e-commerce platform for customizable and repositionable wallpaper. He will follow up in April with a new flagship space at 8th and Callowhill streets in a former nightclub. The 7,700-square-foot hub will feature a café, production facility and co-working space for residential interior designers. 

All told, Replica has more than 18 employees and Leaphart expects to add another six in the first half of this year. 

His best advice to aspiring entrepreneurs: Travel for inspiration, hire people with expertise beyond your own and don’t micro-manage. And his assessment of the entrepreneurial climate in Philadelphia?

"There’s thinking big and there’s thinking bigger. We all need to think bigger."

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

Despite being just shy of their 23rd birthdays, Rafael Ilishayev and Yakir Gola -- who both graduated from Drexel in 2014 -- are seasoned entrepreneurs. 

The duo started their first business together -- an online jewelry store -- when they were 18. And their GoPuff, an app and website that connects late-night revelers to a world of goods delivered straight from local warehouses, already operates in Boston, New York City, Austin, Washington, D.C., and Philly (from a location at 12th and Buttonwood Streets). After successfully raising millions, they’re operating GoPuff as well as a chain of liquor stores in New York. And earlier this month they opened GoBeer at 446 N. 12th Street in Callowhill.

Ilishayev and Gola attended a Callowhill Neighborhood Association meeting on December 14 at Azavea’s Wolf Building headquarters, informing locals about their latest business. Attendees were enthusiastic about the opening.

According to Ilishayev, the location was a good choice because of all the millennials moving into the neighborhood. They’re not going to be selling 40s or kegs, Gola added: "We’re looking for a higher-end client." No single bottles or food will be for sale, though the business partners are considering offering ice cream and soft drinks. Ilishayev likened the look of the business -- which boasts large clean wooden tables, plantings and an awning out front -- to an Apple store.

GoBeer delivers beer in packs of twelve and up; the selection includes global brands, craft beer and ciders. There’s a $2 delivery fee on all orders, plus the cost of the drinks. Delivery on any order over $49 is free.

The distributor is open from 10 a.m. - 11 p.m. Monday through Saturday, and noon - 5 p.m. Sunday.

Writer: Alaina Mabaso
Sources: Rafael Ilishayev and Yakir Gola, GoBeer

It goes without saying that the University City Science Center is home to many innovative and promising healthcare startups. But as Brenda Gavin, a founding partner of Quaker Partners Management, a Philadelphia-based healthcare investment firm, reminds entrepreneurs, it takes more than a good idea to win funding in a competitive investment climate.

Gavin answered questions last month at Quorum’s "Coffee & Capital" event and offered this concrete advice. 

"Both established companies and startup companies should do their homework and know their customer," she said. "That is, they should know as much as possible about the fund they are pitching: When was the fund established? What types of companies are in their current portfolio? What is the previous experience of the partners? How much capital do they have under management? What is their preferred company stage for investment? Don’t waste time pitching a fund when your research indicates they are unlikely to invest.

"All entrepreneurs should remember that most venture funds are limited partnerships with a 10-year life," she added. "This means that a fund must assemble its portfolio, grow value in the companies and get to a profitable exit in 10 years. Most funds invest in companies during the first five years of their life, and harvest in the second five years. So, if a company is a very early-stage discovery company, it is unlikely a fund that is over five years old will invest -- it is unlikely the fund will get to the profitable exit in five years. Entrepreneurs should definitely explore investment from corporate venture funds. They are typically not limited partnerships, so do not have the 10-year limitation."

Since its own founding in 2002, Quaker has invested in dozens of innovative, high-impact healthcare companies at all stages of development and in subsectors including pharmaceuticals, biotechnology, healthcare services, and medical technologies such as devices, tools and human diagnostics. Quaker manages over $700 million in committed capital, and is currently investing its second fund.

Quaker typically invests between $5 million and $25 million in each company, with a focus on the East Coast. Its portfolio includes Science Center alum BioRexis, which was acquired by Pfizer in 2007 only five years after its establishment.

From her vantage point at Quaker’s Cira Centre headquarters, Gavin believes that Philadelphia’s venture capital climate still has room to grow. 

"There is an abundance of scientific expertise and pharmaceutical development talent in this region," she enthuses. "Unfortunately, there is a shortage of entrepreneurial leadership talent and local venture capital for later stage investment. On the plus side, there is substantial early stage investment from Ben Franklin, BioAdvance and the Science Center. These groups are unique to this area -- in addition to their capital, they bring contacts and mentoring. So while our climate is not as robust as that in Boston, the raw materials are here, and I am optimistic that we will see more companies growing here."

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

Philly entrepreneurs Jess Edelstein and Sarah Ribner have been brainstorming together ever since their elementary school lemonade stand in Allens Lane Playground. Now they’re 26 years old, and on December 11, they pitched their latest product -- the world’s first all-natural activated charcoal creme deodorant -- on an episode of ABC's Shark Tank.

The duo founded PiperWai with the mission of offering customers a safe, effective, fragrant, gender-neutral, aluminum and chemical-free deodorant. It took a while for them to realize that the activated charcoal in the product -- which users apply with a fingertip -- was the key. A lot of research into body odor and deodorant competitors led to experiments in a Philly home kitchen. 

"I was looking up activated charcoal for my stomach, actually," recalls Edelstein, "chief maker" and CEO. She got interested in the substance’s absorbent properties. "I kind of had that lightbulb moment to put it in the deodorant."

This was a few years ago, before activated charcoal became a trendy ingredient in cosmetics.

CFO Ribner tested the new concoction during a volunteering trip in Guyana. The stuff worked.

In its current incarnation, PiperWai is a creme blend of organic oils such as coconut, vitamin E, shea butter and cocoa butter, the signature charcoal (which won’t discolor clothes), and a proprietary blend of 11 "therapeutic-grade" essential oils that keep men and women equally fresh.

After finalizing their recipe, the founders began producing deodorant in batches of 300 at Greensgrow Community Kitchen, using pastry piping bags to get it into the jars.

The company's name has two parts -- the first is for Edelstein’s beloved family dog Piper; the "Wai" is borrowed from the name of the Waiwai tribe, who Ribner spent time with during her travels in Guyana.

The pair never saw being woman entrepreneurs as a roadblock to success, but actually launching their business taught them that while there are many programs and funds geared specifically to female entrepreneurs, there are still major gender imbalances when it comes to venture capital.

"I never knew that female entrepreneurs have a hard time in business until we launched a company," says Edelstein. "At some pitch competitions, there were very few women."

Ribner points to the fact that venture capital funds in the U.S. overwhelmingly favor male-founded companies.

A year ago, Flying Kite spoke with DreamIt Ventures’ Archna Sahay, who explained that businesses with female CEOs receive less than 10 percent of venture capital funding nationwide, despite women founding businesses at one and a half times the national average -- and delivering 12 percent more revenue with one third less capital than comparable male founders.

"That’s what led us to do crowdfunding instead," explains Ribner; over $27,000 from an Indiegogo campaign boosted their capacity. "We didn’t have to give away equity and it got us to the next level…So it was one of those situations where one door closes and another door opens."

Now, the two are setting their sights on expanding their deodorant line, developing a stick version of the creme, an extra-strength version and travel sizes. Currently selling their product with 40 independent retailers, they’re working on a deal with Whole Foods in the mid-Atlantic area, starting with Philly.

"You can show people that your gender doesn’t matter," says Edelstein. With the right product and great customer service, "you can still kill it in business."

Writer: Alaina Mabaso
Sources: Jess Edelstein and Sarah Ribner, PiperWai
 

Port Richmond ceramics company Felt + Fat was founded in 2013 by Nate Mell and Wynn Bauer. In May, over 200 Kickstarter donors raised $26,256 for the young Philly business, which provides custom-made tableware to restaurants such as Fork, High Street on Market, South Philly’s Laurel and other fine dining spots in Brooklyn and beyond. They also offer direct sales to individual consumers through their website and wholesale distribution through shops across the country.

According to Mell, Felt + Fat would have continued without the Kickstarter infusion, but it helped them grow much faster than they could have on their own, adding a new kiln to their studio, acquiring other smaller pieces of equipment and bringing on board a paid employee.

"It’s been full-time since day one," says Mell of the hours he and his partner have put into the business; that said, they also worked part-time elsewhere while the company grew. Mell spent about seven years in local restaurants, which helped him connect with chefs who were looking to showcase their locally sourced ingredients on custom Philly-made tableware.

This past summer the founders were able to quit their part-time jobs and focus exclusively on Felt + Fat.

The name is a homage to mid-20th century German sculptor Joseph Beuys -- they liked his artistry and use of materials, most notably soap and animal fat.

"We were just trying to make a name that could exist in a few different realms of craft and art and design," explains Mell.

The founders have perfected a slip casting method for their unique wares, which feature different textures, finishes and colors, including a distinctive swirl. They also make their own porcelain.

"To a degree, it’s kind of like cooking or baking something. It’s a recipe," says Mell of the specially "tweaked" clay and mineral combo they use. Initially, they were mixing the ingredients themselves, but now a distributor does this for them; they then add water and the necessary materials to cast their plates and cups.

In slip casting, the liquid clay -- or "slip" -- is poured into a plaster mold. Wherever the slip meets the moisture-wicking plaster, a hard edge forms. When that layer is thick enough, the excess slip is poured out of the mold. What’s left forms the body of the cup or plate. When dry, it's removed from the mold and fired in the kiln.

All that takes time and space, which Philadelphia has in spades.

"Philadelphia is a particularly good place right now to be an artist and a creative person, because of the rapid growth of the moment," argues Mell. He appreciates the large client base a Philly location offers, without the living and studio costs of New York City.

Next up, the duo are hoping to expand into lighting fixtures and furniture accessories; they eventually aim to open a local showroom for their wares. They’ll certainly have more space to experiment: In January, Felt + Fat (currently at 3237 Amber Street) will expand to a second location in a Kensington studio building at the corner of I and Venango Streets.

Writer: Alaina Mabaso
Source: Nate Mell, Felt + Fat 

When Flying Kite last looked in on Kiva City Philadelphia, the crowdfunding platform had disbursed $200,000 to 50 local independent businesses. Now as the initiative celebrates its first anniversary, that has jumped to 71 loans totaling $318,000 – and manager Alyssa Thomas (who works out of the City’s Department of Commerce) estimates the program will approve up to seven more campaigns by the end of the year.

Kiva is a micro-loan service that caters specifically to aspiring entrepreneurs who lack access to traditional banking and fundraising avenues. Many of them have low incomes or are new arrivals to the United States. The Kiva system utilizes trustees -- such as local community development corporations (CDC) or neighborhood stakeholders -- to discover and sponsor recipients. Crowdfunding campaigns are then run through the Kiva site for $500 to $5,000.

This fall, Thomas has been taking a lot of “corridor walks,” touring commercial stretches throughout the city alongside CDC corridor managers.

"We talk to the businesses that we already know are in need of financing and would be good fits for Kiva," she explains.

A current campaign that stands out for Thomas is Cambodia native Chany's new venture Angela’s Boutique at 454 Wyoming Avenue (between Olney and North Philadelphia).

Chany and her nine siblings pulled together to support the family very early in life. Her father died when she was 12 and her mother, who was disabled, couldn’t support them on her own. The kids worked before and after school at a corner store they launched themselves.

After Chany married a U.S. resident and arrived here at 21, she and her husband had almost nothing. He worked in a factory; she used her sewing skills and took ESL classes. She also operated a Chinese food stand for a few years, but in 2008 decided to purchase the dry cleaner’s on Wyoming, which she and her husband now operate in addition to working four other jobs between them. Six months ago, with the help of the nonprofit Esperanza (one of Kiva’s new collaborators), Chany decided to pursue a longtime dream: opening her own custom formalwear boutique named after her daughter Angela. A campaign now live on Kiva’s site aims to raise a loan of $5,000 toward new signage, lighting and security for her storefront. 

On December 4, an anniversary party at the Center for Architecture honored the New Kensington CDC as Kiva City Philadelphia’s most valuable trustee of 2015 -- they sponsored the highest number of loan recipients, with a repayment rate of 100 percent.

According to Thomas, one continuing struggle is connecting an online micro-finance platform to entrepreneurs who may not have digital fluency or access to the Internet, an issue many low-income Philadelphians face.

"We’ve definitely seen the toll of businesses not being connected to the Internet," she says. Those that aren’t on Yelp or Google Maps suffer. "You don’t know they exist and it really stunts their growth."

Philly’s Kiva pays special attention to the trustees’ role of shepherding loan recipients through the online application and repayment process.

"It’s difficult, but we’ve learned now to work through it so it’s no longer a hurdle," adds Thomas. And ultimately, helping these business owners take their first steps online will benefit them in the long run. "[This] will inspire them to want to figure out how they can utilize those resources to grow their businesses.”

Writer: Alaina Mabaso
Source: Alyssa Thomas, Kiva City Philadelphia

On November 18, University City District (UCD) hosted its sixth annual State of University City event at World Café Live. The headline of the night was the 75,000 jobs created within this 2.4-square-mile neighborhood, home to some of Philly’s premier education, healthcare and science institutions. According to UCD, the area is on track to add an additional 1,000 jobs in 2016.

Craig Carnaroli, executive vice president of the University of Pennsylvania and UCD’s board chair, noted that this density of jobs is among the highest of any neighborhood in the country. Speaking at World Café Live, he cited the impact of startup hubs like the Enterprise Center and Drexel’s ic@3401, which now hosts 50 technology entrepreneurs from 30 member companies.

Carnaroli also noted the groundbreaking work of companies like Spark Therapeutics, which will soon seek FDA approval for its gene therapy; studies indicate they can achieve restored vision in people blinded by certain retinal diseases. Another University City breakthrough made national news this year when eight-year-old Zion Harvey received the world’s first pediatric double hand transplant from Penn Medicine.

Carnaroli touted "the power of community and institutions coming together in partnerships to produce results."

UCD Executive Director Matt Bergheiser spoke about why 75,000 jobs is a "magic number" for the area. Businesses and institutions are "feeling the growth of the regional economy" with a substantial spike in well-paid jobs, he insisted. According to UCD, between 2008 and 2013, the neighborhood saw a 79 percent increase in middle to high-wage jobs -- wage growth far above the city’s overall average. It’s exciting news, especially paired with a ten percent jump in University City’s population since 2013 and expansions in the restaurant, hospitality, retail and real estate sectors.

Another way to look at the job density in University City, Bergheiser pointed out, is to count 30,000 jobs per square mile. He also emphasized some essential ingredients in the neighborhood's success: entrepreneurial, civic and "opportunity" infrastructure. 

Because innovation needs places for people to come together, entrepreneurial infrastructure flourishes at cutting-edge hubs like the Science Center and Wexford Science + Technology.

Civic infrastructure -- which Bergheiser called "splendor at the ground level" -- includes elements such as new parklets, the Porch at 30th Street, a revamped Market Street Bridge and the upcoming $2.1 million transformation of the 40th Street SEPTA portal, slated to open in 2017.

"Opportunity infrastructure" is paying attention to an equity of opportunities, or "how we connect the talent in our West Philadelphia neighborhood" to meaningful jobs, he explained.

That led naturally to talk of UCD's West Philadelphia Skills Initiative -- many participants are low-income residents who struggle with longterm unemployment or a criminal record that prevents them from getting a foot in the door with job applications. Bergheiser said that 91 percent of Skills Initiative graduates succeed in landing a job, with an average starting wage of $13.60 per hour.

It all adds up to "a new first and lasting impression" for our metropolis, he concluded.

Writer: Alaina Mabaso
Source: University City District

The startup stars are aligning in University City, where a quartet of major players has announced several new partnerships aimed at boosting the burgeoning community of entrepreneurs.
 
First up, Drexel University and Ben Franklin Technology Partners of Southeastern Pennsylvania are teaming up to create the Drexel Ventures Ben Franklin Seed Fund, a $10 million early-stage seed fund that will support spin-off companies from the university. The fund will initially invest in enterprises that have licensed technologies from the university and have already taken advantage of Drexel's extensive commercialization programs. Its candidate pool will eventually be expanded to include startups founded by alumni and students. 
 
Concurrent with the launch of the new fund, Ben Franklin will join Drexel and the University City Science Center’s efforts to strengthen the offerings at Innovation Center @3401 (ic@3401). Ben Franklin will establish a physical presence at the collaborative workspace on Market Street, providing member companies a variety of services and support including industry consulting, market analysis and access to capital.
 
At the same time, Safeguard Scientifics is joining ic@3401 as its first "sustaining member." The Radnor-based private equity and venture capital firm specializes in healthcare and technology companies, and will help to recruit and mentor member companies while bringing in new industry collaborators, providing critical resources and offering perspectives on the evolving economic landscape.  
 
"Together the Science Center and Drexel have built a strong foundation for startups at ic@3401," explains Science Center President and CEO Stephen S. Tang. "Adding Ben Franklin to the partnership and Safeguard Scientifics as a sustaining member strengthens the ecosystem that is in place at ic@3401 and allows us to draw on our collective assets and expertise to attract and support a critical mass of high-growth startups and a diverse set of members."
  
Drexel President John A. Fry is also excited about the partnerships.

"Teaming with a visionary organization like Ben Franklin, a group with a proven track record of fueling Philadelphia’s innovation economy, will not only empower our entrepreneurs, but also attract others to University City and serve as a model for the type of partnerships that will form the foundation of the Innovation Neighborhood," he enthuses.
 
Source: University City Science Center
Writer: Elise Vider

WRITER IN RESIDENCE is a partnership between the University City Science Center and Flying Kite Media that embeds a reporter on-site at 3711 Market Street. The resulting coverage will provide an inside look at the most intriguing companies, discoveries and technological innovations coming out of this essential Philadelphia institution.
 

On December 2, wake up with more than just coffee at the latest installment of the Exchange PHL Breakfast Series. At Wednesday's event, regional leaders in innovative social good will tackle "the Path from Startup To High Impact." 

"I think there is something that’s profoundly shifting among nonprofits and their openness to look at these possible changes in how they do business," explains Nadya K. Shmavonian, director of the newly formed Nonprofit Repositioning Fund, who will be speaking at the breakfast.

Hosted by nonprofit-centric co-working space The Exchange, located in Center City’s Friends Center, the event will shift the conversation from entrepreneurship to operations, and discuss how great programs become part of the fabric of the city, touching on sustainable revenue models, evaluation and adaptation.

"We just launched on October 7, so it’s a very new effort," Shmavonian says of the Fund. "We have been pleasantly surprised at how much interest there’s been."

The seven founding members include North Penn Community Health Foundation, Samuel S. Fels Fund, Scattergood Foundation, the Barra Foundation, the Philadelphia Foundation, United Way of Greater Philadelphia and Southern New Jersey, William Penn Foundation and Arizona’s Lodestar Foundation.

The Fund targets nonprofits in transition in the greater Philadelphia area, including Bucks, Chester, Delaware, Philadelphia and Montgomery counties. Hosted and administered by the Philanthropy Network of Greater Philadelphia, seed awards and grants will support nonprofits as they explore and formalize new collaborations, joint ventures and consolidations.

In rare instances, the Fund will also help with dissolution planning for individual organizations outside of a merger or acquisition. That, along with the work of "repositioning" nonprofits, can lead to questions about the Fund’s goals.

"How do foundations work with nonprofits in a way that is not threatening?" asks Shmavonian. "Because obviously there’s a power imbalance there. This isn’t about thinning the herd. It really is about finding ways to allow a nonprofit to…deliver on their mission in a sustainable high-performance way."

That can include tweaks like merging back office realms or making an informal partnership an integral piece of an organizations’ structure, allowing the pooling of resources and best practices.

"There’s a whole array of arrangements that people are looking at that stop far short of a formal merger or acquisition," she adds.

Shmavonian is looking forward to the December 2 conversation, which will also feature Lauren Fine of the Youth Sentencing and Re-entry Project. She thinks the next several years will bring very interesting deals for regional nonprofits, and that the Fund will grow a portfolio of creative models for participating organizations.

"It’s a fast-changing environment out there," she argues. "I’m as much about shifting the culture and dynamics around this as I am the actual individual deals that we’re going to engage in." 

The latest Exchange PHL Breakfast Series is happening Wednesday, December 2 from 8:30 - 10 a.m. at 1501 Cherry Street. Attendance is free; click here to register.

Writer: Alaina Mabaso
Source: Nadya K. Shmavonian, the Nonprofit Repositioning Fund 
 

Artist, maker and entrepreneur co-working hub Indy Hall is launching its first-ever onsite retail venture, and just in time for holiday shopping.

Indy Hall staffer Sean Martorana, who focuses on the arts community and curatorial side of things, says KINSHOP -- which officially opened on November 6 and will probably run until February 2016 -- places no restrictions on the kinds of goods for sale from the Indy Hall community.

“It was really cool to see and celebrate the things that people have made here,” he enthuses.

Dubbed "a collective boutique and small-retail experience in the Indy Hall Gallery," KINSHOP features wares from over a dozen members. The name came out of the group’s recent successful KIN collaborative exhibition, which kicked off this fall’s arts season.

Items on sale range in price from about $100 to $125 for sculptures and $10 to $12 for small arts and crafts items such as prints, wrapping paper, holiday greeting cards, music, pillows, jam, wineglasses, terrariums, tote bags, scarves and more. Thirty percent of each purchase goes directly to arts programming at Indy Hall, funding things like classes and workshops, and gallery and store upkeep. The rest goes to the makers.

The goods will rotate throughout the season -- as soon as one item sells out, something else made at Indy Hall goes on the market. That means the shop will be worth multiple visits for the assiduous locally minded holiday shopper.

“As we sell we’re just going to keep putting stuff in," explains Martorana. "We have so much stuff in our community that we’re not going to go empty."

Indy Hall’s usual weekday hours (9 a.m. - 6 p.m.) are a good time to check out KINSHOP; if you need to make it an evening outing, Martorana recommends Night Owl hours (Tuesdays, 6 - 10 p.m.).

Writer: Alaina Mabaso
Source: Sean Martorana, Indy Hall 

Do people investing money in companies geared for social or environmental good have to give up the prospect of market-rate returns in exchange for working towards a better world?

No. At least according to the first systematic academic research to address the young but extremely broad field of "impact investing," the Wharton Social Impact Initiative's (WSII) new report, "Great Expectations: Mission Preservation and Financial Performance in Impact Investments." In some arenas, socially or environmentally conscious investors can see their returns hit market-rate performance.

"It’s difficult to talk about the report because there is so much nuance in it," explains co-author Harry Douglas, a full-time impact investing associate at WSII, who continues to follow the data of this growing field. However, he hopes that the findings will be accessible enough to spread the message that, contrary to longtime perceptions, impact investing doesn’t "necessitate a concessionary return."

What does that mean?

Investors who choose to put their private equity dollars into companies with missions like micro-finance, healthcare in low-income regions, education technology or green energy don’t have to accept smaller returns than folks who put their money into more traditional profit-driven avenues.

The study tracked the performance of 53 impact investing private equity funds that represent 557 individual investments, and debunks the widespread assumption that lower investment returns are inevitable when investing in socially focused funds.

How do we define impact investing? According to the Global Impact Investing Network, the receiving company’s intentionality of impact (meaning their bedrock commitment to the good outcomes they espouse), the measurable impact the company makes, and the expectation of a financial return.

So since impact investing is such a broad field, with many investors valuing a specific social interest over maximized profits, how did WSII identify a stable of funds to follow? WSII asked participating fund managers to self-identify in one of three categories: those seeking to simply preserve the capital invested, those seeking below-market-rate returns, and those pursuing market-rate returns.

"Our report doesn’t make any type of value judgements about what’s appropriate there, because there’s important work to be done in each of those three segments of the financial expectation," says Douglas. But this study focused only on the latter group of investors: those whose fund managers were seeking market-rate returns.

They did this because they wanted to get the best understanding possible of what the industry’s going to look like over the next couple of years, given the typical five-to-seven-year life cycle of a private equity investment. Funds launched around 2010 are nearing the time that fund managers will exit the companies involved. So there are the questions of whether those investments will prove profitable, whether the companies' missions continue after the exit, or if fund managers seeking higher returns abandon the ideals when mission protections aren’t built into the language of exit agreements.

"We focus on this market-rate seeking segment because we felt the tension would be greatest in this group," explains Douglas. "They would be trying to balance these competitive market-rate returns with preserving portfolio company mission."

This research is just the beginning.

"We’re really hoping to grow this sample size, so we can make more definitive statements about the industry," adds Douglas. 

Writer: Alaina Mabaso
Source: Harry Douglas, Wharton Social Impact Initiative 

A year after launching Frankford Avenue's Kensington Quarters -- a restaurant with its own on-site butcher shop sourcing whole, sustainably and humanely raised animals -- owner Michael Pasquarello has been pleasantly surprised. (Here’s the Flying Kite look at KQ’s opening.)

"What’s been really awesome is the butcher shop has performed better than we expected," he says of the front corner of the space.

Pasquarello worried that his goal of reviving an old-fashioned butcher’s counter in the age of the supermarket would be tough, but a dedicated customer base has materialized. Thanks to that success, KQ offers a growing roster of locally sourced retail products including pickles, produce, dairy, cheese, salts and olive oil. With help from butcher Heather Marold Thomason, Pasquarello plans to expand this part of the business over the next year, "so people can come through and put their meals together."

He also hopes to better utilize the upper floor, which already hosts a range of cooking and butchering classes and events. KQ Executive Chef Damon Menapace plans on more collaborations with top local chefs, including one in November with George Sabatino.

The demonstration space has already hosted Rob Marzinsky, executive chef of 13th Street Kitchens Restaurant Group's latest venture Buckminster’s, a "neo-bistro" slated to open in November in Point Breeze. The resto group -- owned and run by Pasquarello and his wife Jeniphur -- also operates Café Lift (their first restaurant, opened in 2003), Prohibition Taproom and Bufad. 

Buckminster's -- which will boast design elements that honor local science legend Buckminster Fuller of geodesic dome fame -- aims to capitalize on a dining style that’s especially popular in Paris right now, with young chefs giving their own spin on small plates of casual bistro food. But according to Pasquarello, Buckminster’s menu isn’t defined by French cuisine. It will focus on locally sourced goods, with a seasonal menu changing every couple of days and complementing the beverages on offer. Plates ($2-$21) will join eight beers and six wines, along with specialty cocktails.

Pasquarello hopes that Buckminster’s (coming to 1200 S. 21st Street) will open sometime in November offering dinner seven nights a week, with brunch and lunch hours to follow as the restaurant finds its feet.

Writer: Alaina Mabaso
Source: Michael Pasquarello, 13th Street Kitchens Restaurant Group

Last winter, Philly chef Lou Boquila helped bring the city its first taste of a cuisine that’s hard to find in these parts: Filipino food. With help from partners Neal Santos, Jillian Encarnacion and Resa Mueller, Pelago Pop-Up Kusina temporarily took over Passyunk Square resto Noord. The event (and subsequent pop-ups) sold out, and now Boquila is launching his own restaurant in South Philly.

Perla, currently under construction at 1535 South 11th Street, will be the city's only Filipino restaurant. Boquila, a Philippines native who came to Philly when he was eight, says he’s not a traditional Filipino chef.

"But I know the food," he insists. "I know the flavors, [and] I relate that to a restaurant kitchen."

Balking a bit at overuse of the word "fusion," the fledgling restaurateur nonetheless describes Filipino dishes as a mix of influences. They blend Chinese, Malaysian, Indonesian and Spanish flavors, and are served in family-style communal meals that are hard to replicate in a restaurant setting.

Boquila, who’s been cooking for about ten years, got his start in the local food industry as a dishwasher at South Street’s now-defunt Knave of Hearts. He worked his way up, becoming a line cook and then helping run the kitchen, before deciding to attend culinary school. After finishing, he interned at Twenty Manning Grill, where he later became sous chef, and then moved to Rittenhouse Square’s Audrey Claire, where he’s been since 2007.

"Perla will be interpretations of popular Filipino dishes," he explains; he's aiming for "an approachable palate everyone can try."

For example, there's his version of kare-kare, a Filipino stew he makes with oxtail and tripe, along with peanut butter and shrimp paste. He assures diners not to be scared off by the unusual-sounding flavor combo of this "very different, very very funky dish," because it all blends together well with the under-appreciated savory quality of peanuts.

Perla will have a small start for its small space, focusing mainly on a tasting menu that will keep the chef in a hands-on role. But in a nod to traditional Filipino dining, the restaurant will offer special Sunday brunches -- according to Boquila, "breakfast is very big in the Filipino community" -- as well as a Sunday night homage to home-style Filipino dining with kamayan meals, large communal dinners eaten by hand off of a banana leaf.

Boquila hopes to open Perla by March of 2016.

Writer: Alaina Mabaso
Source: Lou Boquila, Perla