The Catalyst Business Incubator

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Executive Summary

The Catalyst Business Incubator is a nonprofit in Texas that provides business education, workspace and access to funding for entrepreneurs of color in our city. Our mission is to help close the racial wealth gap by making sure that Black, Indigenous and other entrepreneurs of color have the same resources, networks and capital that have long been available to others.

Many talented founders start with a good idea and little else. Banks may turn them away, family wealth may be thin and few people in their circle have built a business. A 12-week program with coaching, mentors, a place to work and a small micro-grant can give them a start.

With this grant we will serve about 40 entrepreneurs in Year 1 in two cohorts. We do not promise that any business will succeed. We promise practical teaching, honest coaching and careful use of every dollar.

Our Year 1 budget is about $262,000, growing to about $367,000 by Year 5 as we add cohorts, coaches and entrepreneurs. Each year's budget is planned to balance, with a small surplus each year. We have 3 staff in Year 1 (an Executive Director, a Program Director working about 60 percent time and two part-time business coaches) and 5 by Year 4.

We are asking the Texas Opportunity Capital Foundation for $100,000 for the Program Director, the micro-grant pool, curriculum materials and participant stipends. Our other income and startup support cover the rest. These numbers are estimates based on the assumptions listed at the end of this proposal, and we do not promise any result beyond what we describe.

Company Description

The Catalyst Business Incubator is a nonprofit organization in Texas. We are a registered charity with a volunteer board of directors, a written conflict-of-interest policy and a yearly budget the board reviews.

Our mission. To help close the racial wealth gap by giving entrepreneurs of color access to business education, mentors, workspace and capital.

What we do.
- Run a 12-week Business Launch Accelerator for cohorts of about 20 entrepreneurs.
- Match each participant with a business coach and a volunteer mentor.
- Provide co-working space and a shared address for participants who need one.
- Award micro-grants of up to $1,500 for approved business expenses.
- Connect participants with community lenders, accountants and attorneys.
- Offer stipends for childcare and transportation so cost does not keep anyone away.

What we do not do. We do not give legal, tax or investment advice, and we refer participants to licensed professionals. We do not promise any business a loan or a certain income. We reserve at least 60 percent of seats for entrepreneurs from low- and moderate-income backgrounds. Micro-grants are paid for approved expenses, with receipts, and never as cash for personal use.

How we got here. A group of business owners, a banker and a lawyer began meeting founders on weeknights at a library. Many came back each week with new questions. We kept simple records of who came and what they asked. This proposal asks for support to turn those evenings into a steady program with coaching and micro-grants.

Problem & Opportunity

Entrepreneurs of color start businesses at high rates and face barriers that others do not.

Access to capital. Many founders are turned down by banks or offered terms that are hard to meet. Family savings that fund others' startups may be thin.

Access to networks. A founder who does not know anyone who has built a business may not know where to find a lender, an accountant or a first customer.

Basic skills. Few have been taught pricing, records, marketing and contracts, and they cannot afford a consultant.

Cost and time. Business classes may cost money or meet at times that do not fit a founder with a day job or children.

What we hear.
- A barber says he has been cutting hair for ten years and does not know how to price a second chair.
- A caterer says a bank told her she needed more history.
- A banker says he would lend to more founders if they brought a plan.
- A founder says she learned more in one coaching session than in a year alone.

We do not claim that a program can solve every challenge. We believe that practical teaching, a network and a small amount of capital can change what a founder can do.

Products & Services

The Catalyst Business Incubator gives entrepreneurs the skills, network and small capital to build a business that lasts.

How the program works.
1. Application. Applications open eight weeks before each cohort. We select about 20 participants based on business stage, commitment and need.
2. Twelve weeks. Participants attend weekly evening sessions on pricing, records, marketing, contracts and basic taxes, and write a plan and a budget.
3. Coaching and mentors. Each participant meets with a coach and a volunteer mentor.
4. Co-working. Participants may use our co-working space during the program and after.
5. Micro-grants. Participants with a plan may apply for a micro-grant of up to $1,500 for approved expenses. We pay vendors directly or reimburse with receipts.
6. Connections. We introduce participants to lenders, accountants and attorneys who offer help at low cost.
7. Showcase and follow-up. We hold a showcase at the end of each cohort and check in at six and twelve months.

Coaches and mentors. Our coaches are business owners, accountants and bankers who complete our orientation and pass a background check.

Access and fairness. The program is free. We welcome founders from every background and offer help with childcare and transportation.

Market Analysis

Who we serve. Entrepreneurs of color in our city who run or want to start a business and have limited access to capital and networks. Eligibility is based on business stage, commitment and income guidelines our board sets, with at least 60 percent of seats reserved for participants from low- and moderate-income backgrounds.

How we estimate need. We cannot count every founder who could benefit, so we plan from what we can see. At our library evenings, rooms were full and we kept a waiting list. Community banks, a chamber of commerce and business associations told us they know many more founders than we can serve. For Year 1 we plan to serve about 40 entrepreneurs in 2 cohorts. By Year 5, with more cohorts and coaches, we plan to serve about 120.

Where participants come from.
- Business associations and chambers of commerce.
- Community banks and credit unions.
- Churches and community centers.
- Graduates who tell a friend.

Who else benefits. Neighborhoods gain more local businesses and jobs. Lenders gain borrowers with plans. Customers gain more choices.

What the numbers mean. Every number here is a founder with a business to build. We keep our early counts modest and honest so we can do the work well.

Competitive Landscape

What founders can find today, and how we are different.

1. Small business development centers. They offer strong general advice. Many founders of color do not know about them or do not feel they were built with them in mind. We refer participants for deeper help.

2. Business accelerators. Some are excellent and focus on fast-growth companies with outside investors. Many of our participants own main street businesses. We serve them.

3. Community lenders. They provide loans and need borrowers with plans. We help participants prepare.

4. Community college classes. Useful, with limited coaching and a cost in time and money.

5. Online courses and videos. Helpful, and no replacement for a coach and a network.

What makes us different.
- Free to every participant.
- A curriculum written with founders of color.
- Coaches, mentors and a place to work.
- Micro-grants and stipends for childcare and transportation.
- A strong tie to community lenders and professionals.

We have spoken with business centers, lenders and associations to make sure we are filling a gap and not duplicating services. Their letters of support are in the attachments.

Marketing & Sales Strategy

How founders and partners will find us.

Reaching founders.
- Business associations and chambers. We will present at meetings and events.
- Community banks and credit unions. We will ask loan officers to share information with small borrowers.
- Churches and community centers. We will hold open information nights.
- Online. We will use a simple website and social media with clear information in English and Spanish.
- Word of mouth. Graduates tell friends, and we ask them to bring a friend to the showcase.

Reaching coaches and partners.
- Invite business owners, accountants and bankers through professional groups.
- Offer an orientation, a background check and a short guide to coaching founders.
- Give partners a short report each quarter with counts of participants and what they said.

How we decide who joins. We use an application with a short description of the business and goals. A small review group selects about 20 participants per cohort, with attention to need, readiness and a mix of industries. We reserve at least 60 percent of seats for participants from low- and moderate-income backgrounds and keep a waiting list.

What we watch. Applications, attendance, business plans finished, micro-grants awarded and how businesses are doing after a year.

Operations Plan

How the program will be carried out.

Timeline for Year 1:
- Months 1 and 2 (July and August): Hire the Program Director and coaches, buy equipment, finalize the micro-grant agreement and privacy policy with our attorney and build the application portal.
- Month 3 (September): Open applications and select the first cohort.
- Months 4 to 6: Run the first 12-week cohort with coaching and a showcase.
- Months 7 to 10: Run the second cohort and award micro-grants.
- Months 11 and 12: Survey participants, report to funders and plan Year 2.

Space. Sessions and co-working are held in rented office space near public transportation.

Safety and privacy.
- Every coach and volunteer passes a background check and completes orientation.
- Micro-grants are paid only for approved expenses, with receipts, and are reviewed by two people.
- We follow a written conflict-of-interest policy for grant decisions.
- We keep participant records private, share them only with permission and follow a written policy.

Equipment. We buy about $10,000 of equipment once at the start: laptops and co-working furniture ($6,000), a projector and sound system for classes ($2,000) and a printer, scanner and secure storage ($2,000). Later years replace or add a few items.

Staffing. In Year 1 I serve as Executive Director. The Program Director works about 60 percent of a full-time position at $70,000 a year and manages cohorts and micro-grants. Two part-time Business Coaches, each paid $24,000 a year, lead sessions and coaching. We add a coach in Year 3.

Management & Organization

Marcus Dillard, Executive Director. I lead the organization, report to the board and am responsible for budgets, partnerships and reporting. I came to this work as a small business lender who saw how many strong founders were turned away. I will complete the coach orientation we require so I understand the program from the inside. (Replace this paragraph with your own background.)

Program Director. The Program Director manages cohorts, coaching and micro-grants. We will hire someone with experience in small business or community development. About 60 percent of this position is part of our grant request.

Business Coaches. Part-time coaches who lead sessions and meet with participants. Each passes a background check and completes orientation.

Board of directors. Our volunteer board includes a business owner, a community banker who serves as treasurer, an accountant, an attorney, a chamber of commerce leader and a graduate of our program. The board meets every other month, approves our budget and reviews micro-grant rules. No board member is paid, and members with a conflict of interest step out of related decisions.

Advisory partners. A small business center, a community lender and a city economic development staff member give guidance twice a year.

Staffing and pay in this plan: Executive Director, paid $56,000 a year; program Director, paid $70,000 a year; business Coach (part-time), paid $24,000 a year.

Milestones Narrative

Our goals, how we will measure them and when we plan to reach them.

Year 1 outcomes (July 2027 through June 2028):
- Serve about 40 entrepreneurs of color in two 12-week cohorts.
- Have at least 85 percent of participants finish the program.
- Award about 40 micro-grants of up to $1,500 for approved business expenses.
- Have at least 70 percent of participants complete a written business plan and a simple budget.
- Receive positive feedback from at least 85 percent of participants who answer our short survey.

What we count and how.
- Participants enrolled, sessions attended and coaching hours, from our records.
- Business plans completed, from the coach's checklist.
- Micro-grants awarded and what they paid for, from receipts.
- Participant outcomes at six and twelve months, from a short, confidential form.
We report what we find, including what did not work, and use it to improve.

Growth over five years.
- Year 2: About 60 participants in three cohorts and a second coach.
- Year 3: About 80 participants and a larger co-working space.
- Year 4: About 100 participants at 2 locations and an alumni network.
- Year 5: About 120 participants in four cohorts and a partnership with a community lender.

Learning along the way. At the end of each quarter, the director and the board review the numbers and decide whether we are on track. If we are behind, we will adjust our outreach, our sites or our schedule before asking for more money.

After the grant. By Year 5, grants make up about 35 percent of our budget, down from about 54 percent in Year 1, as partners and donors give more. We will keep building those relationships every year.

Funding Request

What we are asking for, and how the money will be used. Our request: $100,000 from the Texas Opportunity Capital Foundation for the Program Director, the micro-grant pool, curriculum materials and participant stipends, for July 2027 through June 2028.

The request is spread across these budget lines:
- Personnel: Program Director salary, 60 percent of a full-time position, $42,000.
- Other: Micro-grant pool: 40 grants averaging $1,000, $40,000.
- Supplies: Curriculum materials, workbooks and resource library, $8,000.
- Other: Participant childcare and transportation stipends, $10,000 (other funds add $4,000).

Other money in the program. This request is about 70% of our Year 1 grant income. Other grants and the income lines below pay for everything it does not cover.

Year 1 budget: about $262,000, planned to balance with a small surplus (about $13,000 after the yearly wear on equipment). Year 1 money coming in: Grant Revenue $142,000; cDFI Partnership Grant $60,000; city Economic Development Grant $40,000; corporate Sponsors and Individual Donors $20,000. Year 1 costs: executive Director $56,000; program Director $70,000; business Coach (part-time) $24,000; micro-Grant Pool about $40,000; curriculum Materials and Resource Library about $8,000; participant Childcare and Transportation Stipends about $10,000; co-Working Space about $18,000; guest Instructors and Mentors about $8,000; marketing and Outreach about $5,000; administration and Insurance about $12,000; about $4,400 a year for the wear on equipment.

One-time startup costs. Startup costs of $20,500 are paid once from startup money, not from the yearly budget: $6,000 for laptops and co-working furniture; $2,000 for projector and sound system for classes; $2,000 for printer, scanner and secure storage; $2,500 for attorney review of the micro-grant agreement and privacy policy; $3,500 for website and online application portal; $1,500 for background checks and coach orientation; $3,000 for first insurance payment.

How we got our startup number. The Funding Need Calculator in this plan adds the startup costs ($20,500), the cash the program uses before it balances (about $0) and a cash cushion of about $61,800, which is about three months of Year 1 costs. In all, that comes to $82,500. We start with $10,000 from our founding board and $75,000 in startup support from a community foundation and a community bank, $85,000 in all, which covers that amount with room to spare.

The next five years. Our budget grows from about $262,000 in Year 1 to about $367,000 in Year 5. Grants are planned at $142,000, $125,000, $133,500, $117,500 and $127,000 in Years 1 to 5. Other income grows: cDFI Partnership Grant from $60,000 to $100,000; city Economic Development Grant from $40,000 to $80,000; corporate Sponsors and Individual Donors from $20,000 to $60,000. Our surplus is planned at about $13,000 in Year 1, about $13,500 in Year 2, about $15,100 in Year 3, about $16,000 in Year 4 and about $17,900 in Year 5. We run two cohorts in Year 1, three in Year 3 and four in Year 5, with more coaches as cohorts grow.

Savings. We plan to keep several months of costs in savings. The lowest year-end balance in the plan is about $79,500, at the end of Year 1. Some grant payments and partner payments arrive after we bill, so we plan for about $10,480 owed to us at the end of Year 1.

Cost per entrepreneur. In Year 1, our total costs are about $6,285 per entrepreneur served, which includes setting up the program. By Year 5, with more entrepreneur served and a trained team in place, that falls to about $2,909 per entrepreneur.

After the grant. CDFI partners, city economic development funding, corporate sponsors and individual donors grow every year, so grants become a smaller share of our budget. Graduates share their stories, and banks and companies can sponsor a cohort or a micro-grant by name. We will look for partnerships with lenders and city agencies that want to see more businesses owned by entrepreneurs of color succeed.

Risks and how we will handle them:
- A participant misuses a micro-grant. A written agreement, receipts and a limit on what grants can pay for, with two people reviewing each award.
- A coach leaves. We keep a list of trained backup coaches and share the curriculum and notes.
- Low enrollment. We widen outreach through business associations, churches and community banks.
- A cohort that struggles. We review progress each week and add coaching time.
- A privacy problem. A written policy, secure systems and training for every staff member and volunteer.
- A grant ends. We keep savings and grow partner and donor support each year.

If you are just starting. A new organization can begin before it has its own 501(c)(3) status through a fiscal sponsor: an established nonprofit that receives grants for you and passes them to your program, usually for a fee (commonly around 5% to 10% of the grant, sometimes more; ask before you agree). Another way is to start smaller: one neighborhood, a handful of entrepreneurs and a small team, tracked carefully. Strong results from a small start make larger grants easier to win.

Appendix Notes

Documents to attach with this proposal:

- Your IRS 501(c)(3) determination letter, or your fiscal sponsor agreement.
- Your most recent financial statements and your current year budget.
- A list of your board members and what each one does.
- Signed letters of support from partner schools, agencies and sites.
- Your site agreements and your insurance certificate.
- Your consent, waiver and privacy policy.
- Your safety plan and background check policy.
- Your program outline and schedule.
- Quotes for equipment and materials.
- Resumes for your Executive Director and key staff.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Grant Revenue: $142,000 in Year 1, growing to $127,000 in Year 5.
- CDFI Partnership Grant: $60,000 in Year 1, growing to $100,000 in Year 5.
- City Economic Development Grant: $40,000 in Year 1, growing to $80,000 in Year 5.
- Corporate Sponsors and Individual Donors: $20,000 in Year 1, growing to $60,000 in Year 5.
- Pay (a full year, per person, including payroll taxes and workers' compensation): executive Director $56,000; program Director $70,000; business Coach (part-time) $24,000.
- Other yearly costs in Year 1: micro-Grant Pool $40,000; curriculum Materials and Resource Library $8,000; participant Childcare and Transportation Stipends $10,000; co-Working Space $18,000; guest Instructors and Mentors $8,000; marketing and Outreach $5,000; administration and Insurance $12,000. These grow between 4% and 6% a year.
- Equipment: $10,000 at the start, then $2,500 to $3,500 a year.
- Startup costs: $20,500, paid once from $85,000 in startup money.
- Entrepreneurs served: about 40 in Year 1, growing to about 120 in Year 5. Locations: 1 in Year 1, growing to 2 by Year 4. Each cohort meets for twelve weeks.
- About 4% of each year's income is still owed to us at year end.
- Tax: none, as a nonprofit.
- Every dollar amount is an estimate. Replace them with your own quotes and real budget.

Startup Costs