1. THE BUSINESS ENTERPRISE LAW CLINIC THE JOHN MARSHALL LAW SCHOOL
THE ROLE OF TRANSACTIONAL LAW CLINICS IN
ESTABLISHING COMMUNITY ECONOMIC
DEVELOPMENT FUNDS
Michael Schlesinger
Director, Business Enterprise Law Clinic
The John Marshall Law School

2. Educational Component
AN EDUCATIONAL-ENTREPRENEURIAL SOCIAL ENTERPRISE: AN INCUBATOR WITH INTENDED CONSEQUENCES
Educational Component
Conceptualize the nature and purpose of a Community Economic Development Fund
Research and organizational structure
Drafting template documents
Private Placement Memorandum
Subscription Agreement
Articles of Organization: L3C
Operating Agreement
Loan Document Package

3. Entrepreneurial Component: Students’ Role
Involvement with community stakeholders
Collaboration with Fund sponsors
Participation in business meetings
Awareness of sources of funding
Consideration of economic sustainability

4. Social Enterprise Component
Accelerate growth of technology and non-technology businesses
Contribute to a revitalized business ecosystem that:
Improve the economy and raise the standard of living for residents
Help to build restorative economies in communities that have suffered:
Discriminatory policies
Plant closures
Loss of jobs and livelihoods
Diminution of civic life
Patient capital
Long term debt or equity investments
Seeks social as well as a financial return
High tolerance for risk and acceptance of positive but lower turns
Jumpstart the creation of businesses

5. An Incubator with Intended Consequences Community Based Leadership*
Address unique challenges faced by urban and African American entrepreneurs
Personal issues distracting focus on building a business
Lack of experience with successful business people and role models
Reluctance to approach established sources of assistance
Isolation from information and resources necessary for business success
Creating trusting relationships and new networks
Transparency about personal situations
Coaching by individuals who have faced similar challenges
Access opportunities through formal and informal networking
* Marvin Austin, Director of Business Development, Bethel New Life, Inc., West Side Business Xcelerator

6. Building and Sustaining Growth of Promising Businesses*
Management Skills: leadership, business and technical skills to manage and grow businesses
Operation and Management Systems: information for controlling resources and strategic growth planning
Marketing Opportunities: identify market opportunities and expanding markets outside the local economic region based on market research
Money/Investment Capital: access to financial capital in sufficient amounts to grow a business, buffer against losses and take advantage of growth opportunities
* Marvin Austin, Director of Business Development, Bethel New Life, Inc., West Side Business Xcelerator

7. Selection Criteria*
Existing businesses that:
Are between one and five years old
Have a product or service that has a recognized market opportunity
Are beyond the startup phase
Have some innovation in the product, process or delivery method
Have potential or actual markets outside the local economic region
Have potential size of: 5-25 employees; $500,000 to $3 million in annual revenue
Will create quality, living wage jobs
* Marvin Austin, Director of Business Development, Bethel New Life, Inc., West Side Business Xcelerator

8. Structure: For Profit
Sponsor organization (community development corporation, chamber of commerce or other tax exempt organization) establishes a L3C
Sponsor
Common Units
Investors
Preferred Units
L3C
Member-Managed
Management
Committee
(elected by Common and Preferred Unit Owners)
Priority Preferred Return

9. Structure: NFP-Tax Exempt
Sponsor-501(c)(3) organization
Stakeholders
Funders
Sponsor
501(c)(3) subsidiary
Board of directors