This story was originally reported by PRI's Here and Now. For more, listen to the audio above.
Detroit is in bad shape economically. The unemployment rate is estimated to be more than 3.5 percent higher than the national rate. The nonprofit Bizdom U is trying to change that, by training and cultivating entrepreneurs who will start businesses headquartered in Detroit.
The organization was started by Daniel Gilbert, the owner of the Cleveland Cavaliers who made his fortune after founding Quicken Loans. It gives entrepreneurs the chance to cultivate their ideas for businesses during a four-month, full-time program, where the cost of living and a travel stipend are provided. Then, Bizdom U provides up to $100,000 in start-up capital to get the businesses up and running.
At the start, Bizdom U retains 2/3 ownership of the businesses started through the program, and the entrepreneur retains 1/3 ownership. Executive director Ross Sanders told PRI's Here and Now that Bizdom U uses those shares to fund other businesses launched by graduates of the program. Then, once entrepreneurs pay off Bizdom U's initial investment, they're given 2/3 ownership, and the program then gets a 1/3 stake.
One of the businesses started by Bizdom U is Jimmy Kicks, a company that allows artists and designers to shoe submit designs and lets other people vote on them. The shoes that get the most votes get manufactured, and the winners get $500. The company's founder, James Smith Moore, told Here and Now, "It's kind of a way to do our own market research before we put out a design."
Bizdom U "taught me a lot of the street smarts that I need to run a successful business, such as accounting, business, law, how to create a contract, HR," Moore told Here and Now. "I mean it was great."
Jimmy Kicks is already employing three people. And while that may not seem like much, in a city with 13.2 percent unemployment, "we think Bizdom U is extremely important because it's fostering entrepreneurship in a city that really hasn't supported entrepreneurship," according to Sanders. Bizdom U won't solve all of Detroit's problems. But Sanders believes, "it's kind of like planting a seed that will foster entrepreneurship in the future."
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