LITE Memphis

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LITE Memphis: Building a Minority Entrepreneurship Pipeline

Memphis, United States
Year Founded:
2014
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Growth
Budget: 
$100,000 - $250,000
Scaling strategies launched within the past 6 months:
Organizational Growth
Large Scale Partnerships
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Let's Innovate through Education empowers minority students to launch entrepreneurial ideas. Let's Innovate through Education achieves this through a six month entrepreneurial incubator, scholarship and internship matching, and a venture capital fund to support the launching of businesses.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if we could fix poverty at its source (the lack of income) by launching businesses in those communities led by students from those communities.
About Project

Problem: What problem is this project trying to address?

Less than 1% of all business revenue in the city of Memphis comes from minority owned businesses yet 70% of the population is minority. Over 30% of Black youth in the city from age of 16-24 either don't have a job or are not currently in school. Only 700 out of 46,000 Black owned businesses in Memphis have more than 1 paid employee.

Solution: What is the proposed solution? Please be specific!

LITE is seeking to solve the wealth gap in Memphis and other urban cities by building a minority entrepreneurial pipeline from the age of 16 to 25. Through this pipeline, students launch microventures, get matched with scholarships, receive paid internships while in college, and then receive startup investments in the range of $25K-$50K to launch businesses in their own communities as adults. LITE is unique in two ways: minority students launch ideas and LITE empowers students over a 10 year period. While other programs offer financial literacy or direct intervention for 3 months, LITE applies learning to the real world and offers multiple interventions over the lifespan of a child.

Awards

Teach for America National Innovation Award, Sue Lehmann Teach for America Award
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Marnisha Boddie was a bright, smart, driven, articulate student that lacked the social networks to expand her idea. Due to LITE, Marnisha identified that she had to change the way Memphis thought about the environment by empowering 10 high schools to collect 1,000 used clothes, merge them into 50 sets of fashionwear, put on a fashion showcase for 50 people, and sell those clothes to those in the audience. Marnisha then donated those proceeds to a local environmental non-profit. Through LITE's six month incubator, Marnisha had to pivot her initial idea after customer feedback, market her idea, budget for her idea, go to market with her idea, and pitch her idea to over 100 community investors.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

In the past year, LITE secured $2.6 million in merit scholarships for students, grew from 120 students to 1,000 students in workshops, grew incubator from 6 students to 50 students, and raised over $150K in revenue with a pledged grant of $350K in the works. On a scale of 1-10 with 10 being the highest, students gave an average score of 9.77 on how rewarding the program was, 9.11 on how much growth they achieved with long-term skills, and 9.8 on parents believing that their children grew due to this program. 85% of students successfully launched their ventures and 86% of students grew significantly in ACT aligned skill areas. The vision is for a low-income minority student at 16 years old to be just as likely by the time they are 25 years old as a high-income white student at 25 years old to launch a business successfully

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

The scaling strategy focuses on partnering with existing youth non-profits and offering intensive coaching to their top minority talent. The current growth model is capped at 100 ideas per city per year. The model would need 5 full-time staff for each city at full capacity. LITE plans on spreading to other small market cities like Detroit, Cleveland, New Orleans, Oklahoma City, Newark, Kansas City. LITE's national model resembles Teach for America in that they have strong national values/mission at the national level but a localized model at each region that is self-funded.
Sustainability
Funding: How is your project financially supported?: 
individual donations or gifts - 40%
foundation or NGO grants - 60%

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

The long-term model is focused on investing equity in the businesses that our students launch as adults. In return for the venture capital money that LITE invests in the student companies, LITE will receive equity. This income will contribute to at least 20% of LITE's revenue. The current cost model is $3,400 total for a student over a 10 year period.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

There are organizations in every city that work with startups on launching businesses, vocational track programs that work with training adults, and financial literacy programs that work with low-income student populations. This proposed project differs from these approaches because it zeroed in on what causes minority businesses to fail: lack of prior launching experience with an idea, lack of long-term intervention programs that span multiple years, and the lack of access to capital. Other organizations that resemble LITE include: Junior Achievement, Build Boston, and Camelback ventures.
Team

Founding Story

LITE started in a Teach for America classroom in Memphis and scaled from that classroom to over 1,000 students two years later. Hardy Farrow started LITE because of what he saw everyday while teaching: lack of hope, the tremendous effect of poverty on the ability of his students to learn, and the lack of long-term interventions towards fixing entrepreneurial gaps in the city. In order to fix these things, Farrow raised $50K while teaching full-time and went to his students with a simple value proposition: come up with a great idea and we will fund it. Over the course of several years, Farrow grew LITE into a minority entrepreneurial pipeline that provides capital, networks, and the chance to launch innovative ideas.

Team

LITE currently has two full-time staff: Executive Director and a Program Director. LITE has 10 volunteer mentor coaches who volunteer 3 hours a week. The staff model will cap at 5 with a Director of Alumni and two more program associates. The Executive Director has won two national awards for teaching and the Program Director has extensive experiencing in running a frozen yogurt startup and working with Latino students on college access.