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Commerce in the Community: Rising Tide Capital works to improve traditionally disadvantaged communities by empowering local entrepreneurs to start and grow their businesses.

Alex Forrester, Co-Founder and Cheif Operations Officer of Rising Tide Capital

Ed. Note: This post is part of the Commerce in the Community series highlighting the work of community leaders and organizations that are strengthening the middle class and providing ladders of opportunity for all Americans.

Below is an interview with Alex Forrester, Co-Founder and Chief Operations Officer of Rising Tide Capital, a nonprofit organization that provides high-quality business education and consulting to low- and moderate-income entrepreneurs in Northern NJ. Rising Tide Capital has achieved national recognition for its approach to economic empowerment of low-income individuals and communities through entrepreneurship. In 2009, Rising Tide Capital was selected as a CNN Hero and recognized by President Barack Obama in a White House speech on innovative non-profit organizations.

Q1: Tell us about Rising Tide Capital. What is your mission and main focus?

Rising Tide Capital is a nonprofit organization committed to the economic empowerment of low-income families and communities through entrepreneurship. By providing high-quality business education and consulting services and by partnering with local microfinance agencies, our goal is to help create jobs and economic opportunity in the neighborhoods that need them most by investing in the success of the talented men and women who live there.

We believe in the value of the work we do at Rising Tide Capital because it leverages an immense amount of entrepreneurial activity that is already going on in low-income neighborhoods and tries to invest in those efforts in ways that can confront the extremely challenging context of working poverty in modern America. Due to unemployment, underemployment, and low-wage work, many urban communities have large numbers of poor and working-poor families. These families struggle with financial self-sufficiency and often have difficulty covering basic expenses like rent and electricity. The emotional and psychological stress of financial insecurity—and the anxiety and depression that so often develops—is at the root of what keeps poor communities poor.

Living in the midst of these communities are skilled men and women with the courage, the talent, and the entrepreneurial drive it takes to start and grow successful businesses. They turn to entrepreneurship as a way to supplement their income and to create economic opportunities for themselves.  The businesses they start—often home-based and part-time—have the potential to grow and provide employment to their owners and to others in the community. Their likelihood of success, however, is often limited by their level of business skills and access to resources.

It is within this framework that Rising Tide Capital exists. By providing high-quality business education and consulting—custom designed for the educational needs of low-income entrepreneurs—RTC assists these talented men and women to start and  grow successful businesses, generating jobs and economic opportunity for themselves, their families, and their communities.

While mainstream small business development initiatives exist in many areas, these resources are often oriented to serve individuals whose educational level and business acumen is often a step above the level at which many low-income entrepreneurs begin. The result is often frustration and marginalization on the part of many entrepreneurs, whose needs are not being met by a program intended for more advanced participants. By specializing in educational services that are custom designed for the needs of low-income entrepreneurs, RTC represents an important part of a larger ecosystem. Using best practices in adult participatory education methodology, RTC has cultivated an expertise within this special segment of the entrepreneurship education field and is dedicated to a long-term vision that enables this expertise to benefit other underserved communities.

Q2: How did Rising Tide Capital get started?

Rising Tide Capital was co-founded in May 2004 by myself and our CEO, Alfa Demmellash. Alfa and I had met as undergraduates at Harvard University. Alfa was born and raised in Ethiopia and was a Government major interested in the connection between poverty and political violence. I was born and raised in New Jersey and was a Postmodern Philosophy and Theology major interested in the connection between faith and social justice. Eventually, both of our paths brought us to an interest in social entrepreneurship and microfinance. We had become fascinated by microfinance after reading about Muhammad Yunus’s pioneering work at the Grameen Bank in Bangladesh. (Yunus later won the Nobel Peace Prize and has inspired many others like us to follow similar paths.) After reading his book Banker to the Poor we wanted to know whether microfinance could play the same kind of transformational role here in the United States as it had internationally. We decided to find out for ourselves, so we moved to Jersey City and started Rising Tide Capital. During that first year, we learned many lessons that have guided our approach ever since. We were meeting with anyone who was willing to talk to us and eventually found our way to Martin Luther King Drive in one of the toughest neighborhoods in Jersey City where we ended up partnering with an organization that worked with formerly incarcerated men and women and their families. For anyone who went through their program who was interested in potentially starting a business, we would set up a meeting to talk with them about their idea and help them think through the next steps. While our original goal was for Rising Tide Capital to be a microlender, we began to see that there was a huge unmet need for education and advice for these aspiring entrepreneurs. We realized that a loan is, frankly, just more debt unless someone knows what to do with it and that while there has been a lot of attention paid to the financial side of microfinance, very little attention had yet been paid to how to deliver high-quality business management training and consulting services to this segment of the entrepreneurial market. It became clear to us that we could partner with other lenders, but that the real need that Rising Tide Capital should focus on is the education and consulting side of the industry. That’s what we’ve been doing ever since, and now ten years later we work with over 500 entrepreneurs per year who go through our Community Business Academy program and receive year-round support services after their graduate. It has been an amazing journey! 

Q3: How are you working to promote entrepreneurship and economic development?

The typical entrepreneur at RTC is a 39 year-old mother of two children earning less than $35,000 a year. In an area like Northern NJ where we are headquartered, her family would need to earn $50,000 per year to be considered “self-sufficient”, just to cover basic living expenses like food and rent. While many of our entrepreneurs may come to us with a job, they simply aren’t earning enough to support their family and are looking for a path forward. By helping our entrepreneurs to start and grow successful businesses we are not only helping them to create jobs for themselves and others, but we are also helping to stabilize their families and improve the lives of the children living there in ways that go beyond the pocketbook. Over time, we believe that these strengthened families end up playing informal leadership roles in their neighborhoods and extended networks in ways that build up a community’s social capital and contribute to the long-term success of macro-level revitalization efforts that may be going on around them. We tend to think of our work as occurring in the capillaries of the economy and believe that any comprehensive approach to urban poverty needs to take advantage of the immensely powerful role that local, small-scale entrepreneurs can play in nourishing the true “grassroots” of a neighborhood.

In order to pursue these goals, Rising Tide Capital runs two core programs—The Community Business Academy (CBA) and Business Acceleration Services (BAS)—to support entrepreneurs who are starting or trying to grow a small business. The Community Business Academy is a 36-hour course in basic business planning and management, taught by experienced instructors, each of whom has prior experience owning and running a small business. Our curriculum is simulation-based, using best practices in adult participatory learning methodology, and everyone who graduates from the program is eligible for college credit from a local university towards a certificate or degree. Through group discussion, guided exercises, and hands-on business simulations, aspiring entrepreneurs gain a working familiarity with critical skills like record-keeping, cash-flow management, break-even analysis, competitive pricing, marketing strategies, negotiations, and business planning. Graduates of The Community Business Academy then receive year-round Business Acceleration Services—including one-on-one consulting, advanced seminars, networking events, and mentorship—in order to start and grow their business. When an entrepreneur is ready to pursue financing for their business, he or she works individually with a consultant to prepare and refine their business plan and documentation and is then connected to our network of local micro-lending partners. We have designed our services to provide ongoing support over a multi-year period and tend to work with our entrepreneurs for two to three years after graduating.

In the end, results are what matter, and we take outcome measurement very seriously in the way we go about designing our programs and learning from our performance. To date, RTC has graduated 838 graduates from its Community Business Academy (CBA) program, of whom 398 are in business today and 363 in the planning stage. In 2013 alone, RTC graduated 191 entrepreneurs from its Community Business Academy and saw 52 of its entrepreneurs start new businesses, 129 strengthen existing businesses, and 76 businesses expand their sales or staffing. A total of 154 (68 FTE) jobs were created as a result. Within two years after graduating, our entrepreneurs experience an average 157% increase in business revenue and 27% increase in household income. As a result of these strong outcomes, RTC produces $3.80 in local economic impact for every dollar invested in its programs.

Q4: In what ways are you partnering with other organizations in the community to increase your impact?

RTC works in close collaboration with a current total of 128 community partners, who promote, host, and complement our program activities within the community. These partnerships form the foundation of our grassroots methodology, and they include a wide variety of organizations—from microlending agencies to community colleges and community based organizations. We are attempting to link our program to the larger ecosystem to create a multiplier effect, or what some might call “collective impact”. On one hand, we may partner with a social service agency offering an IDA program to make sure that their clients who are interested in entrepreneurship can link their IDA savings to a business development goal. On another hand, we are focused on targeting our services to immigrants and refugees and have recently launched Spanish-language versions of our programs. We also partner with domestic violence agencies and organizations who work with the formerly incarcerated to make sure that our services are easily accessible for populations for whom entrepreneurship represents an especially important opportunity for self-sufficiency. Our partnerships with local community colleges and universities is also very important to us. One local university in our area has agreed to provide six credits towards a degree or certificate for graduates of our program. Another university in the area accepts two graduates each semester from our program into a year-long, rent-free residency in their small business incubator. On a larger level, we also partner with city and county-level economic development agencies to make sure that revitalization efforts include pathways of opportunity for low-income individuals and neighborhoods. These partnerships are absolutely critical to our approach and to the success we’ve had to date, and we’ve been very fortunate to have a high level of interest and engagement from City Hall in each of the cities where we work.

Q5: If people want to learn more about Rising Tide Capital, what should they do?

Please visit our website at or call us at 201-432-4316. You can also find us on Facebook: or follow us on Twitter @RisingTideOrg. Of course, you can always come visit us at our offices in Jersey City. We are located at 334 Martin Luther King Drive, and we’d love to see or hear from you!

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