Launching and growing a food business requires significant upfront investment – but obtaining the funds to get one off the ground is a challenge for many start-up founders. This is especially true for diverse entrepreneurs, who face systemic challenges in accessing business funding, including grants and loans.
That’s where the Nourish DC Collaborative comes in. Since 2021, it has deployed $935,000 in grant funding over two rounds to 22 diverse-owned businesses (15 of which are also woman-owned). In addition to these grants — which are rarely an option in the food industry — Nourish DC has offered $15 million in loan financing and $625,000 in funding to help partners increase their technical assistance and lending capacity.
Funding That Fuels Communities
Nourish DC grants are available to D.C. businesses ranging from grocery stores to urban farms, food processors, and restaurants that increase access to healthy food and create high-quality jobs in the community. All current grantees are located in Supermarket Tax Incentive Areas (neighborhoods with poor access to groceries and fresh food), primarily in the District’s Wards 5, 7, and 8.
The grants can be a lifeline for founders in the early stages of starting a business who may not qualify for loans.
“Many of our grantees are receiving their first grants, which gives them the confidence and validation to grow their businesses,” says Alison Powers, director of Economic Opportunities for Capital Impact Partners.
Since community members are better placed to understand their neighbors’ needs than funders, Nourish DC grants are responsive and inclusive, allowing recipients to direct the funds in the ways that will most benefit their businesses and communities.
Grantee Story: Turning a Family Food Tradition Into a Business
When D.C. native Patrice Cunningham lost her job as chef and manager of a Korean BBQ restaurant in the District at the start of the COVID-19 pandemic, she saw a moment of opportunity.
Cunningham held an MBA and had long dreamed of starting a business that celebrated the foods from her blended Korean and African-American heritage. In the summer of 2020, she landed on a plan: selling fresh kimchi using her mother’s recipe. With the U.S. market for kimchi — a traditional Korean dish made of salted and fermented cabbage and other vegetables — valued at $70 million, Cunningham knew that her idea had potential. But securing funding for her new business, which she named Tae-Gu Kimchi for her mother’s hometown in South Korea, wasn’t so easy.
Facing Financial Headwinds
From the start, Cunningham hoped to create a national brand and see Tae-Gu Kimchi on grocery shelves across the country in stores like Whole Foods and Trader Joe’s. But when she lost her job, Cunningham only had $500 in her bank account. To cover start-up costs, including licensing fees, supplies, packaging, and commercial kitchen space, she accepted a loan from a friend and maxed out her credit cards. Her mother pitched in to buy ingredients and help her make the kimchi.
Cunningham’s initial weekly sales at farmers markets were enough to cover ingredients for the next week’s batch of kimchi — but her reliance on revenue meant she couldn’t scale up or work toward her goal of getting her product onto store shelves.
The obstacles Cunningham faced weren’t unique. In addition to difficulty accessing credit, diverse-owned businesses nationwide hold fewer cash reserves and report lower first-year profits, factors which can curtail a business’ ability to grow and even to survive long-term.
But when Cunningham was awarded a $45,000 Nourish DC grant in early 2023, Tae-Gu Kimchi’s trajectory changed quickly.
“It was like winning the golden ticket,” Cunningham said. “It was pivotal because I was ‘bootstrapping’ at that point. I had all these costs, and I had run out of packaging.”
Preparing For Scale
With Nourish DC grant funding in hand, Cunningham went from selling kimchi at four farmer’s markets per week to 15. She purchased a truck, additional tents and tables, more packaging (featuring a brand redesign), and commercial refrigeration space. She also immersed herself in courses and programs about everything from packaging to pitching her product to grocery stores.
Since Cunningham’s mother had always made kimchi from memory, one key challenge was scaling her recipe. Cunningham carefully documented her process and the exact mix of ingredients that made the kimchi stand out. “That taste is something you can never forget,” she says.
Tae-Gu Kimchi’s growth has allowed Cunningham to build a sales team of nine employees and a kitchen team of three in addition to herself, expanding the Nourish DC grant’s impact.
Growing Within the D.C. Community
When small businesses succeed, they create a rising tide that lifts those around them. Nourish DC grant recipients don’t just provide their communities with additional food options, but also with job opportunities and chances for neighbors to get to know one another.
In the last year, Tae-Gu Kimchi’s growth has allowed Cunningham to build a sales team of nine employees and a kitchen team of three in addition to herself, expanding the Nourish DC grant’s impact. She also used to grant funding to dramatically scale up her farmers’ market business, going from four markets per week to 15 and hiring a company to set up and manage these. This gave her more time to pursue grocery sales channels, manage online sales, and develop content for social media.
With Nourish DC grant funding in hand, Cunningham went from selling kimchi at four farmers’ markets per week to 15.
Cunningham has deep appreciation for Nourish DC and the support she received. “They understand that DC is a big food scene right now and so many people are starting food businesses,” she says. “They give businesses the opportunity to make it.”
The Nourish DC grant had the desired impact. As of 2023, Cunningham’s various sales channels — farmers’ markets, grocery stores (her products are sold at two Dawson’s Markets in the DC area), and online sales — are consistently producing revenue of $15,000 to $20,000 per month, with a few months spiking upwards of $30,000. Local customers also can pick up the kimchi at her Ward 5 location or have it delivered.
Now, Cunningham is looking for the capital to fuel her next round of growth, which will include building her own kimchi kitchen/production facility, identifying a co-packing partner, and making inroads into retail channels. “I’m going to take this as far as I can,” she says.
In 2021, Capital Impact Partners and the Government of the District of Columbia – along with a group of partners – launched the Nourish DC Collaborative, an initiative that supports the development of locally owned food businesses in D.C. communities to create vibrant, healthy neighborhoods.
Nourish DC offers flexible loans, grants, and technical assistance to emerging and existing food businesses. While it serves the entire District, the collaborative focuses on supporting businesses in underestimated neighborhoods.
In this blog series, learn how food business owners are supporting their local communities and how technical assistance offered through Nourish DC helped them create change.
Culinary skills and a passion for food are often the sparks behind a new food business. But entrepreneurs also need a broad set of skills in administration, operations, marketing, finance, and human resources. Nourish DC supports new and growing food businesses in the D.C. metropolitan area by funding technical assistance (TA) in these and other areas critical to success.
Nourish DC is committed to providing TA that is culturally appropriate, multilingual and responsive to the needs of businesses. Because these needs change over time as a business evolves and matures, Nourish DC aims to be flexible and meet entrepreneurs where they are.
“Each business has different needs, depending on its stage, sector and expertise,” says Alison Powers, director of Economic Opportunities for Capital Impact Partners. “TA for start-ups will lay the foundation for success, but TA is needed at every stage of growth.”
Food entrepreneurs gain skills in administration, operations, marketing, finance and human resources thanks to technical assistance from Nourish DC.
The COVID-19 pandemic added new challenges — such as cost inflation, supply shortages, and a tighter labor market — further fueling the need for TA. “There was already a line out the door for TA,” Powers says. “It doubled as companies grappled with meeting the changes and challenges of the past three years.”
Another important benefit of TA: “Businesses that have received extensive TA are typically more ready for financial capital, such as a loan or grant,” said Powers.
Leveraging the Power of Collaboration to Support Businesses
Nourish DC uses a collaborative structure, bringing together the strengths of mission-driven organizations to support food business owners. The Nourish DC Collaborative partners providing TA – including Dreaming Out Loud, Latino Economic Development Center, Wacif, EatsPlace, and CDC Small Business Finance – have deep community knowledge and connections. A partnership with the Latino Economic Development Center (LEDC) is helping to incubate and launch new food businesses through a robust TA program that includes its Food Venture Initiative (FVI). The eight-month program includes three months of intensive TA followed by five months of access to commercial kitchen space at Union Kitchen, which is subsidized by Nourish DC and Union Kitchen.
The Nourish DC Collaborative partners providing TA have deep community knowledge and connections.
According to Alexandra Samaniego, LEDC’s Program Manager, D.C. for Small Business Programs, 90 percent of LEDC clients are immigrants. If immigrants are not able to find employment, many choose to start a business — typically in the food, construction, or service industries. As a result, she says, there is a huge need for food-industry support. “Most entrepreneurs know how to make food; they need help running the business. We give them a roadmap to starting a food business. Even if they were an entrepreneur in another country, it’s different here.”
From PhD to Small Business Owner
Nigeria native Oluwatobi Osobukola-Abubu was surprised, but excited, to find herself part of the first Food Venture Initiative cohort. Even though her mother was a cook and caterer in Nigeria, Abubu never imagined that future for herself. She came to Washington, D.C., in 2013 for a diplomatic position at the Nigerian Embassy. Already the mother of one (a two-and-a-half year-old daughter, age 2-1/2), she was pregnant with her second child, a son, when she arrived. Once here, she began working on a PhD in African Studies at Howard University, intending to focus on trafficking victims and help them use entrepreneurial skills as part of their recovery.
Abubu’s plans changed when her position with the embassy ended in 2017 and her son, then nearly 5, received an autism diagnosis. She knew she wouldn’t be able to find the support he needed back home, and she was committed to finishing her PhD. She chose to stay in D.C. and find new work with the flexibility to meet her family’s needs.
Oluwatobi Osobukola-Abubu built her food business Fritters & Roast from scratch, with the help of technical assistance from Nourish DC.
From her time at the embassy, Bubu knew there were few authentic Nigerian food options in the D.C. area. She also knew how much her friends and neighbors enjoyed the home-cooked Nigerian foods she shared generously with them. When the COVID-19 pandemic hit, Abubu began looking for resources to help the small, home-based food businesses she knew. That’s how she connected with LEDC at her local library. LEDC staff were promoting the FVI, and after hearing her story, encouraged her to apply.
Supporting Business Owners with Strong Foundations
LEDC initially provided 1:1 and group TA and training (e.g., webinars) to clients, but now offers more structured support through FVI. LEDC began providing TA in April 2023 to 10 program participants. The participants moved to the commercial kitchen in August and will have access to it through December 2023.
Powers and Samaniego both emphasize the importance of providing commercial kitchen space as part of the FVI program. Access to such space, which is especially critical as businesses begin to scale up, is both limited and costly in the D.C. area — typically around $2,000 per month. That cost either puts it out of reach for food start-ups or consumes the limited start-up capital they have.
According to Samaniego, the organization also hopes to target future TA to two distinct groups of entrepreneurs:
Those just starting out or in early growth stages who need broad training and support, and
Those more established who need targeted training and support to address specific business needs.
LEDC hopes to expand the FVI program and offer two sessions each year — one starting in the spring and one starting in the fall.
Building a Food Business from Scratch
Abubu launched Fritters & Roast in 2022. Taking the advice of her LEDC coach, she started small, focusing on simple “finger foods” that are popular in Nigeria, such as bean cakes, banana fritters and plantains. She made them available in quantities suitable for individuals and families. She later added cassava chips and two flavors of a Nigerian hibiscus drink (pineapple/lemon/ginger and watermelon/lime), which has been popular with customers. She holds sampling events and sells her products through farmers markets and online, with plans to create packaged products for retail stores. She also offers catering services.
With technical assistance through Nourish DC, Oluwatobi Osobukola-Abubu is now able to sell her authentic Nigerian finger food with D.C. communities.
The most challenging aspect was “starting completely from scratch on everything,” Abubu says, including marketing herself and her business. Which is why she values the depth and breadth of support she has received from LEDC — and her friends and neighbors, who stepped in to help test menu offerings, design her logo and menu, and build her website. Access to the commercial kitchen has been valuable in many ways. She appreciates not only the facility but the “ecosystem of support” she is building with other food entrepreneurs.
“I never saw myself as one to do the business myself,” says Abubu, whose children are now 12 and 9. “But LEDC saw that and were able to bring it out. If they hadn’t gotten me into the initiative, I wouldn’t have been able to bring that gift out. That’s the amazing thing LEDC did for me.”
By Ellis Carr, President and CEO of Capital Impact Partners and CDC Small Business Finance (each is part of the Momentus Capital branded family of organizations)
In 2022, a Fast Company piece by Porter Braswell released new statistics that painted a telling picture: in 2021, only 1.4% of Black founders received venture capital funds. That’s a stark number when you consider that more than 13 percent of the U.S. population is Black or African American. It is not surprising, however, given that Black investors only make up 3% of the venture capital industry. The numbers are similarly poor for women-led startups, which only receive 2.3% of venture capital funding, and whose leaders only make up 5.7% of venture capital partners.
When you think that racial inequality, specifically as it relates to Black Americans, has cost our economy over $16 trillion over the last 20 years, it’s clear that our approach to investing in diverse entrepreneurs needs to change.
Companies serving historically disinvested communities, especially those led by entrepreneurs of color, often face barriers to securing the investments that they need to grow. This may include business knowledge that is limited as a result of not having a formal education or not being able to pursue an advanced degree. Limited networks and lack of access to family wealth can create obstacles to securing basic startup costs or working capital. Seeking traditional financing has been an ongoing barrier to success for generations due to systemic biases.
Entrepreneurs of Color traditionally face multiple barriers to launching and growing their business. The Momentus Capital branded family of organizations’ Impact Investing program is designed to support those growth-staged businesses that have a positive impact on communities.
While local leaders are best positioned to drive community-driven solutions, they still consistently butt up against systemic barriers to accessing capital. It is often confusing for business owners to know where to start or who they can turn to. This situation often forces entrepreneurs to rely on extractive capital or on the onerous requirements of debt like putting up collateral or personal guarantees that are often predicated on and exacerbate an inequitable system. Generations of inequality have made it harder for entrepreneurs of color and women to accumulate wealth that could be leveraged for investment. Having less existing wealth means one receives less favorable terms of financing, putting at risk the disproportionately smaller amount of wealth one does have.
The Momentus Capital branded family of organizations aims to interrupt this vicious cycle. We envision an economic system that respects and uplifts all peoples’ right to achieve the dreams they have for themselves, their communities, and generations to come by changing the way community-centric businesses secure capital.
Turning Traditional Venture Capital on its Head
Led by a diverse team of experts, Momentus Capital’s approach is fundamentally different. Starting with a listen-first approach, our focus is on social impact and on growing companies in a culturally respectful manner.
We are uniquely positioned to grow mission-aligned companies by acting as a single source with the ability to provide them with a continuum of financial, knowledge, and social capital.
To us, this takes many forms:
We provide financial capital through flexible financing options – a range of debt and equity products to meet our partners’ needs, as well as access to new markets and investors.
We provide knowledge capital through business advising, assistance, and training.
We provide social capital through connections to networks and people that can help our partners succeed.
In addition to this holistic approach, where we truly differentiate ourselves from traditional venture capitalism is through our philosophy on equity. It is our intention that any impact investment we make is designed to be regenerative or non-dilutive. Our end goal is focused on helping companies grow while also ensuring that the entrepreneurs, employees, and community members retain the equity.
Momentus Capital is uniquely positioned to grow mission-aligned companies by acting as a single source with the ability to provide them with a continuum of financial, knowledge, and social capital.
Investments That Support Community-Focused Companies
Our impact investments team also takes a unique approach that begins by getting to know the company from the inside. This helps us understand what impact the company wants to have on its community; what unique solutions it is seeking to deliver that support equitable outcomes for health and wealth building; and what challenges the company has faced in raising capital as a result of being led by an entrepreneur of color or of serving a disinvested community.
Armed with that knowledge we can develop a flexible and patient approach that is first and foremost designed to help businesses achieve their growth visions sustainably.
non-dilutive preferred equity whereby cash flow positive businesses pay a fixed payment and dividend
revenue/profit-sharing structures that are structured to help companies manage volatility
Our Sector and Geographic Focus
We put these tools to work by engaging with diverse entrepreneurs focused on building healthy, inclusive, and equitable communities. This includes companies that:
Create economic opportunities to support intergenerational wealth-building
Improve access to affordable, healthy food
Improve access to healthcare and insurance
Grow employee-ownership structures such as cooperatives
We’re further helping to fuel economic growth and opportunity by fostering deep connections in our communities. Currently, the Momentus Capital impact investments program target geographies include Atlanta, Ga.; California; Detroit, Michigan; the Washington, D.C. metropolitan region; Miami, Florida; New York Tri-State area; and the Texas Triangle (Austin, Dallas, and Houston).
We envision an economic system that respects and uplifts all peoples’ right to achieve the dreams they have for themselves, their communities, and generations to come by changing the way community-centric businesses secure capital.
Demonstrated Success
We’ve already demonstrated the positive impact that our approach is creating with and for community-minded companies.
Take, for example, Abner Mason the president and CEO of SameSky Health. Mason launched SameSky in 2013 to advance health equity for Americans who are marginalized or under-resourced by helping them better navigate the complex health care system.
To grow his company, Mason needed investors but has long been frustrated by those who either would not invest in him as a Black CEO, or were not supportive of his solutions that focused on disinvested communities.
Where others saw risk, we saw an opportunity. Through our impact investing program, we provided SameSky Health with a $5 million venture debt bridge loan to support the growth of the company as they progress to raise Series C funding.
We also worked with Obran Health, a unique company that operates worker-owned health care companies designed to give decision-making processes and capital back to caregivers, operators, and health care workers. A lot of Orban’s affiliates are managed by worker-owners who are women of color, and so this was an excellent opportunity to make an investment that supported wealth building in a way that would stay with the employees in their communities.
When Obran Health sought to acquire Physicians Choice Home Health, a home health care provider in Los Angeles, we provided a $1 million preferred equity investment. This allowed Obran to avoid the traditional route of syndicated loans and debt which would have hampered their long-term growth.
Abner Mason came up with the idea for SameSky Health in 2013 with a dream of creating a company that is on a mission to advance health equity. From its inception, SameSky Health has been focused on engaging and helping Americans who are marginalized or under-resourced.
To advance that mission, Mr. Mason worked with Momentus Capital, a family of mission-driven organizations that includes Capital Impact Partners, CDC Small Business Finance, and Momentus Securities. Through our impact investing program, SameSky Health received a $5 million venture debt bridge loan to support the growth of the company. We talked to Abner about how this investment is helping SameSky Health in its efforts to address a significant market challenge to help disinvested communities get guidance and navigate a complex health care system.
Q: What do you feel you have achieved the most since starting the company?
Abner: I’m very passionate about the mission of SameSky Health, to create cultural connections for a healthier, more equitable world. I feel fortunate to have built a company where people who are just as passionate as I am about our mission have joined the organization. We’ve built a team of incredibly talented people who are focused on creating a solution that enables equitable health care.
Health equity is at the center of everything SameSky Health does. We have established ourselves as a leading health equity company. We are focused on raising the bar in America for health equity and how we should treat the people we are trying to help navigate our complex health care system.
We have built a leading, scalable health equity technology platform, unlike no other, that enables health plans and other health care stakeholders to comply with new health equity-related requirements that they will have to comply with now and in the future.
Q: The need for funding means that you’ve achieved a certain amount of growth. What challenges/barriers have you faced in terms of attaining funding for SameSky Health?
Abner: One of the major challenges I have run into over the course of my career is trying to raise money as a founder of color. I am optimistic about the future, as I have seen great progress being made from investors in startups supporting new businesses founded by people of color, which has more than doubled since 2020.
Another challenge I have faced in the past is gaining support from investors to raise funds for a solution that addresses low-income, underserved communities, particularly those people who are enrolled in Medicaid. Up until recently, venture capitalists did not understand the Medicaid market or the extraordinary need for advancing health equity. I am very optimistic about the traction in investment and innovation in this space over the past two years to help address health disparities.
Q: Momentus Capital, however, is able to offer something that hopefully can make an impact with a lower risk. Any thoughts on that relationship so far?
Momentus Capital is essential for a company like SameSky Health. The company played a crucial role in helping SameSky Health secure bridge funding as we progress to raise our Series C funding, which is the next step. We are deeply grateful for their flexibility and support of SameSky Health.
Q: Why did you choose Momentus Capital versus another investor? What was the difference maker for you?
Abner: It was clear to us that Momentus Capital values working with partners to impact change in the health care system and drive health equity. This aligns well with our values and mission. Their approach allowed us to easily structure a deal that was fair to everyone given our alignment around advancing health equity. Momentus Capital stands out from others for their flexibility in working with our team and their ability to quickly move toward a transaction to help us continue scaling and driving equity in health care.
Q: How do you think SameSky Health improves the lives of people in the community through health care, and how does proper investment into funding drive these positive aspects?
Abner: SameSky Health has built an innovative solution that combines technology and human touch to deliver a culturally tailored, personalized experience to members of health plans. If the health care industry continues to try to address challenges the same way they always have, we’ll never achieve better outcomes. Innovation and investment in health care IT innovations are so important. Investors need to support startups that are building solutions that will meet the needs of low-income, underserved communities. Investors need to be more proactive in seeking opportunities to work with companies such as SameSky Health.
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