A number of students are currently working to help Middletown entrepreneurs expand and succeed in their business endeavors. The Germinal Fund, started this summer by Ted Shabecoff ’16, Adam Saul ’16, and Jason Brandner ’16, focuses on two primary aspects: microlending and consulting for small businesses and entrepreneurs.
Shabecoff, the group’s Chief Executive Officer (CEO), explained the reasoning behind the two-pronged approach.
“We want to cater our services to the exact needs of our clients,” he said. “What we’ve found is that business owners tend to think solely on their product and not on running a business as much. As students interested in management and how things work, we can see things creatively. We see…a solution, which is creating a service of consulting for the businesses beyond the basic lending aspect.”
The Germinal Fund has partnered with several national and international microfinance organizations in order to build its services and find funding. The group will work with Consult Your Community, a student-run organization that promotes the creation of undergraduate consulting, to develop comprehensive consulting services; it will also work with Kiva Microfunds to facilitate its microloans.
Brandner, the group’s Chief Marketing Officer (CMO), explained why the microfinance model is appropriate for the Middletown area.
“We’re looking to supply these smaller loans at low interest rates because [small businesses] don’t need to be overburdened with debt,” Brandner said. “It takes a lot of start-up capital to get ready, and so anything we can help with, and to give them access to the Kiva and Wesleyan networks, we think is a huge benefit.”
The Germinal Fund is also working with the Patricelli Center for Social Entrepreneurship (PCSE). PCSE Director Makaela Kingsley ’98 detailed the mechanics of their partnership.
“[Shabecoff] contacted the Patricelli Center via the Center of Community Partnerships this past summer, when he and the Germinal Fund team already had a first draft business plan, a company name, and an overall vision for their enterprise,” Kingsley wrote in an email to The Argus. “I talked with them about key partners in Middletown, the mechanics of their loan process, company organization, conferences and workshops they might want to attend, and more.”
Kingsley believes that the fund can have a positive impact on relations between the University and the Middletown community.
“We discussed potential funding sources, including the PCSE seed grant,” Kingsley wrote. “The Germinal Fund can support local businesses while providing significant experiential learning opportunities for Wesleyan students. It will be yet another way that the Middletown and Wesleyan communities collaborate and support each other.”
Currently, the Germinal Fund is working with two Middletown clients: a soup kitchen looking to allow its clientele to run a bakery in the kitchen, and a retailer starting a speciality clothing store. The organization is consulting the businesses to help build an effective business plan before giving them a microloan to jumpstart production.
“We would rather give money to someone who we’re not entirely sure can pay back but who has the dedication, who has the vision to develop an enterprise that could really effect positive change in the community,” Shabecoff said. “That’s more important than profit for us; that’s more important than the certainty that the business owner can pay back the loan. Rather than looking at financial return, we’re looking at social return, the most change that our money can affect.”
In addition to the chief officers, 12 students are involved in the Germinal Fund. Each student has committed to a weekly training session as well as regular meetings with their clients. The training will last throughout the semester and will focus on five modules: principles of microfinance, accounting, principles of marketing and branding for small businesses, legal considerations with small businesses, and general topics of consulting.
Shabecoff, Saul, and Brandner will teach some sessions and will bring in industry professionals to teach others. Training is open to all students willing to make the time commitment, regardless of previous business experience. Once they have completed the modules, each student will have the opportunity to work directly with a business.
“By dividing all the work amongst a team of dedicated students, we can really make sure that every client we have is given the best service possible,” Shabecoff said. “Because Wesleyan has taught us to think outside the box, we’re really in a great position to be able to apply our critical thinking to whatever we do and have this training just be the building blocks for our services.”
Saul, the group’s Chief Financial Officer (CFO), noted the importance of engaging with the Middletown community.
“I think if we’re going to live in this community, we have this duty to give back to it,” Saul said. “It’s imperative that we work to benefit the town as much as possible. Capital begets capital, so if we help one business succeed and expand, that immediately is an economic boost to the town. In helping the community prosper, it becomes a more attractive community for both Middletown residents and [University students].”
Though the Germinal Fund is only beginning its operations, the team hopes to see it grow exponentially once it has a trained staff and credit in the Middletown community.
“The end result that I’d like to see is businesses in Middletown cooperating with both each other and Wesleyan, while flourishing and growing sustainably because they have been given access to credit…as well as gained financial literacy and business skills to be independent of us,” Brandner said.