Unable to Find Work, Some Former Prisoners Become Entrepreneurs
by Matt Clarke
It’s an age-old story. Despite EEOC guidance instructing employers not to have blanket policies against hiring ex-felons – and efforts to lift restrictions on occupational licenses for former prisoners – those released from prison soon become familiar with every variation of the word “no” when seeking jobs. One solution is to start their own business, and some non-profits and government agencies have lined up to support ex-prisoner entrepreneurs both before and after release.
The federal Small Business Administration (SBA) launched its $2.1 million Aspire Entrepreneurship Initiative on August 22, 2016. The program trains former prisoners on how to run their own their businesses, and provides them with starter microloans. The initiative is a collaboration between the SBA, the W.K. Kellogg Foundation and microlender Justine PETERSEN.
The SBA is overseeing strategic planning and matching funds from Kellogg for pilot programs in Chicago, Detroit, St. Louis and Louisville, Kentucky, while PETERSEN delivers intensive, cohort-based entrepreneurial education. Kellogg also supplies evaluation support. The program has signed on other nonprofits, such as Safer Foundation, to provide training.
“More than 75% of all the new jobs created are not from big corporations, they’re from small businesses,” said Victor Dickson, president and CEO of Safer Foundation. “When we are struggling to find work for people with [criminal] records, one way to address that is to facilitate more individuals to start businesses because those are the ones that really create jobs.”
Former prisoner Theresa Hodge and her daughter, Laurin, founded D.C.-based Mission: Launch, a startup and accelerator program for ex-felons seeking to operate their own businesses. The program includes three months of group lessons and discussions about starting a business, one-on-one mentoring, help with building a business model, instruction on pitching to investors and additional assistance all the way to launching the startup. Mission: Launch received a $50,000 SBA grant and matching funds from four foundations and companies.
In 2010, Beverly Parenti and Chris Redlitz co-founded The Last Mile, a program to teach entrepreneurship skills to prisoners at the San Quentin prison in California. The couple had been involved in the Silicon Valley startup scene for years and previously founded a business accelerator called Kicklabs. Redlitz became interested in helping prisoners after giving a speech on business and entrepreneurship at a correctional facility. He said the questions they asked were intelligent and targeted, and some wanted to hand him business plans they had drawn up.
The Last Mile has had CEOs and business founders as guest lecturers and visitors, which gives prisoners a chance to network and possibly set up post-release employment opportunities.
“When someone is released from prison, the likelihood of [their] starting a tech company at day one is [very low],” Parenti observed. “So we help them get placed in internships in companies,” so they can learn how the business works.
The program was expanded in 2015 to another three California prisons, including the Folsom Women’s Facility. It also launched The Last Mile Works, which allows prisoner graduates of the coding academy to work on web development services for outside clients to earn money and build a portfolio prior to their release.
Catherine Hoke, 26, was working in New York City when a friend invited her to visit a Texas prison. She was so impressed with the “smart and hungry hustlers who defied the stereotypes” she met that she quit her venture capital job and founded a nonprofit in 2004 that trains prisoners to start businesses – the Prison Entrepreneurship Program (PEP).
PEP offers a rigorous curriculum with MBA-level coursework and mentoring to unlock the entrepreneurial spirit within prisoners, many of whom were operating complex – though illegal – businesses prior to their incarceration. The program offers education and mentoring to Texas state prisoners, and Baylor University has awarded Certificates of Entrepreneurship to program graduates since 2013.
Many PEP participants are serving time for drug crimes, but about half had been convicted of violent offenses. Less than one percent are white collar criminals. Sex offenders are not allowed to participate.
Although many prisoners fail to complete the PEP program (around 40 percent), Baylor University recently announced that 93% of those who do found employment after release, in addition to launching over 150 businesses – six with annual revenue that now exceeds $1 million. The recidivism rate for graduates is around 7 percent, much lower than the 23 percent overall rate in Texas. That reduction has saved the state an estimated $6 million in incarceration costs.
However, after her 2009 divorce, Hoke was the subject of an anonymous letter sent to Texas corrections officials outlining her romantic relationships with some of the paroled prisoners who had participated in PEP. She was then barred from state prisons and forced to resign from the organization.
Just a year later, though, Hoke founded Defy Ventures, a non-profit, to expand the PEP model nationally. The organization now has programs in 17 prisons across the U.S., including in California, New York, New Jersey and Nebraska. Students in Defy’s Entrepreneurs in Training (EIT) course take six to nine months to complete the program.
Defy Ventures – which won a Techstars Foundation grant – offers more than job-training and readiness, with entrepreneurial success stories like San Francisco Bay area realtor Seth Sundberg. While doing federal time for tax fraud, he discovered boxes of chicken in the prison’s kitchen labeled “not for human consumption.” That led him to scour the commissary for nutritious foods rich in protein. He tried mixtures of trail mix, oatmeal, peanut butter and honey until he produced a satisfying granola bar. Selling them to other prisoners netted him about $200 per month, a big step up from the $5.25 a month he was making in the kitchen.
Sundberg enrolled in Defy’s program and received business training, mentorship and a microloan. With that and his recipe, modified to be non-GMO, gluten-free and organic, he founded Prison Bars (www.prison-bars.com) after his release. He now sells “criminally delicious” granola snack bars online and in some Bay-area shops. The company has six employees, four of whom are former prisoners.
Defy Ventures graduate Coss Matre took a body-weight workout routine he developed while imprisoned in New York and founded ConBody, a prison-style boot camp program that uses former prisoners to teach fitness classes. The idea came to Marte after he and some friends, who had been performing calisthenics at a Lower East Side park, were approached by a passer-by who wanted to join them. Marte said there was a $200 buy-in. When the man cheerfully paid up, Marte – who had been convicted of running a $2 million drug ring – knew he was on to something.
ConBody now operates out of a basement studio where 300-400 clients participate in at least one of 40 weekly classes. Marte developed his routine when a prison doctor said his soaring blood pressure and cholesterol levels were life-threatening. He then lost 70 pounds in six months, while his followers in prison lost a combined half-ton of weight.
After Gregory Bonds was released from prison, he was rejected over two dozen times as he applied for jobs. He then prevailed in Defy’s “Shark Tank”-style competition for a $15,000 grant to start his own business, Project Tradeshow, which creates and sells promotional display banners for companies.
Results like those have captured the attention of corporate leaders like Bill McDermott, CEO of business-software firm SAP, who said he was “highly impressed” by the “grit and mental toughness” of the prisoners he met in Defy Ventures.
“They welcomed me openly into a very emotional conversation about their lives,” he stated, adding that “it was a powerful reminder to me that every journey has value, even those that temporarily stray from the right path. I left inspired by the courage I witnessed from every person in the Defy program.”
Other firms involved with Defy Ventures include Chase Bank, which provides banking courses, video hosting service Vidme and Google, from which over 450 employees have volunteered to help. Google has also donated more than $1.25 million plus equipment like smart phones.
Over 4,400 people have volunteered with Defy Ventures thus far, providing mentoring to more than 3,600 EIT students. The program has held 15 competitions – like the one that Bonds won – and has more planned. At the first one in New York state, 25 executives judged the competition to win “CEO of Your New Life.” The winner, Robert Cassato, 44, gave credit to Coss Marte for the inspiration to work on his pitch three or four hours a night, six nights a week for six months.
“Anybody’s gonna look you up online these days and say ‘I don’t know if I’m gonna do business with this guy,’” said the former loan officer, who wants to start an on-demand personal training service called Homebody Fitness. “But being part of Defy, they might look you up now and say ‘You know what, this guy is rehabilitated. I think he deserves a second chance, and I think I’m definitely gonna do business with him.’”
“I founded Defy as my second chance to give second chances,” Hoke said, recalling the humiliating accusations that forced her out of PEP and Texas prisons. She added that her work with Defy Ventures is motivated by a desire to tell prisoners “why second chances are so important.”
Neil Senturia is an entrepreneur and investor who started a Defy program in San Diego in January 2017 – the first to introduce a longer one-year format for EIT courses. Senturia, CEO of Blackbird Ventures, is married to city councilmember Barbara Bry. “The idea of bringing entrepreneurial thinking into the prison moved me,” he said.
“They’re not going to start Cisco or Oracle,” Senturia acknowledged. “They’re going to start food trucks, they’re going to start lawn servicing, they’re going to start barber shops. Simple businesses, but they begin to have the possibility.”
Defy, PEP and similar programs have inspired other entrepreneurial projects for prisoners – like Building Entrepreneurs for Success in Tennessee.
BEST, which Karen Vander Molen co-founded in 2014, aims not only to help prisoners prepare for jobs and start businesses, it also hopes to reduce the state’s 48.4 percent three-year recidivism rate. The college-level curriculum requires a high school diploma or GED, and participants must be within three years of release or parole.
Since launching the program with 22 male prisoners at the Charles Bass Correctional Complex, BEST has expanded to include female prisoners at the Tennessee Prison for Women. Instructor John Murdock, a director at the Nashville Entrepreneur Center, teaches BEST participants using the same curriculum developed for his organization’s successful PreFlight program. He says prisoners who take part in BEST “will either be a super employer or a much more savvy, committed and adept employee.”
“We need them to be coming out [of prison] with the skills and the confidence and the wherewithal to rejoin society as a contributing member,” he noted.
Recently, in December 2017, former federal prisoner Candido Ortiz, whose sentence was commuted by President Obama, received assistance from the non-profit New Jersey Re-entry Corp. to open the El Sabor Del Café in Jersey City. The Re-entry Corp., directed by former Governor Jim McGreevey, helped Ortiz get a job and then obtain $25,000 in financing to open his restaurant. While incarcerated for over 26 years, Ortiz had worked as a prison cook, refining his culinary skills.
Of course PEP, Defy Ventures, BEST and other entrepreneurship programs for prisoners are scarce, and do not meet the needs of all prisoners preparing for release. But for those who have the skills and inclination to start their own businesses, they provide an alternative to the difficulties that ex-felons frequently face when it comes to finding post-release employment.
Sources: www.chicagoreporter.com, www.uncubed.com, www.cnn.com, www.nytimes.com, www.prnewswire.com, www.time.com, www.inc.com, www.csmonitor.com, www.tech.com, www.cnbc.com, www.businessinsider.com, www.entrepreneur.com, www.bloomberg.com, www.kpbs.com, www.tennessean.com