The Real Deal

For Kesha Cash ’10, being an impact investor means doubling as a social entrepreneur — and as an activist for the next generation of change-makers.

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Kesha Cash ’10

When Kesha Cash ’10 met Denise Adusei ’10, their conversations solved a problem for Adusei and opened an opportunity for Cash.

Midway through her first year at Columbia Business School, Adusei stumbled upon an unanticipated challenge: access to safe and reliable daycare. Although Adusei had added her name to several daycare waiting lists months before her daughter was born, she was still out of luck: there were roughly 5,000 spots for the 25,000 children under five in Harlem, where she lived. Worse still, Adusei learned, Harlem children suffered from one of the highest rates of childhood environment-related diseases in the country.

So with the support of her mother, who moved in to help look after her daughter, and with the zeal of a Columbia MBA student, Adusei set out to build Harlem’s first “eco-friendly” preschool: a safe, nontoxic environment that fostered each child’s relationship with nature. As Adusei developed a business plan in the School’s Entrepreneurial Greenhouse Program, the daunting question loomed: where would she find seed funding?

“Even though there is a demand for high-quality daycare in Harlem, it’s really tough to sell education and socially focused endeavors,” says Adusei. “A preschool isn’t sexy like a technology start-up.”

It wasn’t a bank or lending institution that finally paid attention; it was Cash, who was preparing to launch Jalia Ventures, an investment initiative devoted to early-stage companies run by minority entrepreneurs with social or environmental missions. (“Jalia” means “empowerment” in Swahili.)

 Jalia Ventures’ Kesha Cash ’10 (center), Denise Adusei ’10 (left) of Peartree Preschool, and Rhys Powell of Red Rabbit reunited in July at the Harlem construction site of Peartree Preschool, whose outdoor play garden is just two blocks north of Central Park.

Jalia Ventures’ Kesha Cash ‘10 (center), Denise Adusei ‘10 (left) of Peartree Preschool, and Rhys Powell of Red Rabbit reunited in July at the Harlem construction site of Peartree Preschool, whose outdoor play garden is just two blocks north of Central Park.

Adusei presented her idea to Cash and Cash’s business partner, Josh Mailman — a veteran angel investor and philanthropist whose family endowed Columbia’s Mailman School of Public Health — and Cash and Mailman ultimately selected Adusei as one of Jalia’s first investees. The investment enabled Adusei to secure a loan from the Small Business Association, which she supplemented with $25,000 she received from the School’s Eugene Lang Entrepreneurial Fund.

“Once you get your first $2, you can wave it around and say, ‘Hey, somebody has confidence in me,” says Adusei. “Jalia and my Columbia Business School network essentially enabled me to launch.”

Peartree Preschool, nestled in a new development at 112th Street and 7th Avenue with its own outdoor play garden, opened its doors this month.

Digging In, Scaling Up

After an investment is made, most venture capital firms take a step back. Their primary work is done.

Cash has a different perspective. “Doing the deal is the easy work,” she says. “The real work is the hands-on technical assistance that these companies need to position themselves for scale.”

For Peartree Preschool, that meant connecting Adusei with a team of legal experts to guide her through the commercial lease process. It meant serving as a sounding board on hiring decisions and vendor selection, which led to unexpected returns: Adusei introduced Cash to Red Rabbit, a Harlem–based provider of healthy school food — and, ultimately, Jalia’s next investee.

Owned and founded by Rhys Powell, Red Rabbit delivers made-from-scratch, locally grown food to schools throughout New York City. In 2010, when Cash and Powell met, the company was bringing in about $1 million a year. Cash told Powell he should be aiming for $5 million. “That was mind-blowing at the time,” Powell remembers.

After Jalia’s initial investment, Cash and her team helped Powell map out a long-term strategic plan, complete with financial projections and staffing recommendations.

“Jalia opened my eyes to the possibilities for the company and then helped me flesh out how to get there,” says Powell.

Jalia Ventures is currently an initiative of Serious Change LP, a dedicated fund managed by Mailman. Cash and Mailman launched Jalia with the goal of developing eight to 10 companies and then using this track record of success to create a fund or partner with another fund. “If we start doing enough deals, then we can prove that these minority entrepreneurs are out there,” Cash says.

Jalia’s investments range from $250,000 to $500,000. “We’ve realized that most of these companies need help getting to that Series A round, where they can go out and raise $2 or $3 million dollars,” says Cash. “We’re getting really good at coming in at this early stage and helping companies craft their growth strategy.”

“Jalia opened my eyes to the possibilities for the company and then helped me flesh out how to get there.” —Rhys Powell, founder of Red Rabbit

Looking ahead, Cash envisions some combination of a for-profit and nonprofit model for Jalia Ventures, where the nonprofit arm supports the technical assistance and mentoring that the organization provides to each portfolio company. “It’s too much work for a traditional venture model to bear,” says Cash.

With more than $3 million invested in 11 companies since Jalia Ventures launched in 2010, Cash is confident that she and Mailman are proving that achieving both financial and social or environmental returns through minority-led companies is a win-win.

As for Red Rabbit, in June the company received a loan from the New York City Investment Fund — led by Henry Kravis ’69 — to expand its kitchen facilities. Powell says that the company is on track to exceed $5 million in annual sales. Next up? $100 million.

On a Mission

Cash grew up in Section 8 housing in Orange County, CA, and was the first person in her family to graduate from a four-year college. A math major at the University of California, Berkeley, she often noticed that she was the only African American in the room. “I was determined to prove that I was just as smart as everybody else,” she says.

By the time she graduated, with internships at Coopers & Lybrand, Goldman Sachs, and Merrill Lynch under her belt, she had landed a mergers-and-acquisitions analyst position at Merrill Lynch. She felt like she had arrived.

But as she settled into Los Angeles as a junior associate after working two long years in New York, friends and friends of friends increasingly approached her for guidance on their small business endeavors. At a party she met a man who specialized in unique hair pieces. He mentioned that he’d been dreaming of launching his own product line. Weeks later, he and Cash traveled to China to evaluate manufacturing facilities.

“His ideas were fantastic,” says Cash, who had left banking by then. “Here’s someone who didn’t have a high school diploma but who was highly conscious of what it takes to create and sell a product.” (Today, Dr. Boogie is a celebrity stylist with an eponymous bestselling product line.) “That’s when the light bulbs went off that there’s amazing talent within the African American community,” says Cash. “What’s lacking is the structure and resources that it takes to sustainably grow a business.”

At Columbia Business School, Cash focused on venture capital and entrepreneurship and became actively involved with the School’s Social Enterprise Program. It was a summer internship at Bridges Ventures, which invests approximately $440 million in underserved communities in the U.K., that confirmed her desire to join the small but growing impact investing movement — investors who are structuring deals that yield both financial returns and broader benefits to society. “I realized that there was a name for my passion,” remembers Cash.

Eager to learn about this rapidly evolving space, Cash organized a panel discussion at the School between Josh Mailman, whom Cash knew then as a legend in the field, Antony Bugg-Levine, an adjunct professor and the coauthor of Impact Investing: Transforming How We Make Money While Making a Difference (Wiley, 2011), and social entrepreneur David del Ser Bartolome ’08. Cash recalls feeling an immediate connection when she met Mailman, who told her that he had been thinking about creating a fund specifically focused on entrepreneurs of color.

Right before graduation, Mailman took Cash for lunch at a Midtown steakhouse and asked her to help him launch the fund. “I can tell you really want to do this, don’t you?” he asked.

“This is what I have been reaching for!” Cash remembers telling him.

Planting the Seeds

In June, Cash was speaking on a panel about impact investing at a student leadership conference hosted by the United Negro College Fund (UNCF). “I was talking candidly about different problems like unemployment and obesity that affect African American communities,” says Cash. “I challenged students to address these problems in a way where we are also rewarded financially — a win-win — and I could see their eyes opening up.”

As an example, Cash cited Jalia’s entrepreneur-in-residence, Donnel Baird ’13, whose start-up, BlocPower, will market renewable energy products to nonprofits and small businesses in underserved communities, reduce CO2 production, and create jobs for hard-to-employ black men — “a triple bottom line,” says Baird.

“I realized that these are the conversations that have to happen to change things,” Cash says. How can we start planting the seeds now so we can create a sustainable pipeline of future portfolio companies?”

In June, Jalia Ventures partnered with the UNCF to launch Impact America HBCU, an annual venture competition that will target historically black colleges and universities to promote the development of minority-owned businesses that have social or environmental missions. The partnership will provide selected entrepreneurs with seed financing and technical assistance to launch or scale up their enterprises.

“A reality for a lot of African-American people who make it to graduate-level degrees is that it’s difficult not to take the job that offers the most reliable cash flow to support our families,” Cash says. “Instead of complaining about it, my goal is to create action and pull together the resources and the teams of people who care about domestic issues to drive change. Somebody has to share the gospel.”

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