Revitalizing Baltimore Neighborhoods with Entrepreneurship: Jay Nwachu, CEO of Innovation Works Leads the Way
Sandtown-Winchester, Harlem Park, Greenmount, Cherry Hill – these Baltimore neighborhoods could exist in any other major metropolitan city. They all struggle with crime, poverty, high unemployment, and an overall lack of investment.
But for Jay Nwachu, CEO of Innovation Works, these neighborhoods are fertile ground for uncovering some of the most compelling entrepreneurs, ideas, and small businesses in Baltimore.
“I’m really excited about the trajectory in front of us and early successes and what I really think it means for Baltimore,” said Nwachu, CEO of Baltimore-based Innovation Works.
Innovation Works is a collaborative resource networks that connects neighborhoods, entrepreneurs, social innovation assets, and investors to build sustainable neighborhood economies in Baltimore. With its financing subsidiary, Ignite Capital, the two aim to help reduce the racial wealth gap in Baltimore, which, as Nwachu puts it, is a “heavy lift.”
The organization supports “social entrepreneurs” who work to improve their communities by creating businesses that support jobs and build wealth at the neighborhood level. Innovation Works’ portfolio is made up of an eclectic yet exciting group of businesses ranging from a developer, garment manufacturers, natural dye processors, culinary arts, and coffee roaster.
How does Nwachu and Innovation Works help? They step in by providing critical resources through a five-stage enterprise development pipeline that includes education, training, mentorship, and financing through Ignite Capital.
“We find ourselves in our small bubble at this intersection of community development and economic development,” Nwachu said. “Even more specifically, thinking about how we support entrepreneurs who are looking to address some of the challenges we have in the city, and supporting them with the resources that they need to address those critical challenges and create wealth for themselves and their own families. That’s what entrepreneurship is about.”
He is seeing progress. Innovation Works’ team has grown to 12 employees who are working with 160 entrepreneurs across the city. The organization’s mentor network has grown to 100 mentors who come from all walks of life, finance, law, marketing, business and are not in for a couple of weeks, but for years.
“These are professional folks who are rolling up their sleeves to help entrepreneurs pro bono,” Nwachu said. “This is a testament to Baltimore.”
Meantime, Ignite Capital, has raised $3.4 million over the past two-and-a-half years and has already put $1 million of the money to work by investing in 18 businesses.
There is an excitement in Nwachu’s voice when he talks about some of the businesses that Innovation Works is backing.
Black Acres Roastery near Station North is a company Nwachu sees taking off. Run by Travis Bell, Black Acres not only sells fresh coffee, but cold brews, and has a wholesale business that is humming with clients that include Trader Joe’s.
“We just invested capital in the business because he (Bell) is going to expand his manufacturing capacity,” Nwachu said. “In the grand scheme of things, you see this as the coffee business. But it has these social impact elements around the types of jobs that he’s going to create, the livable wages that will come with them, who he’s creating jobs for and how to think about his entire value chain.”
“But end of the day, you still want this coffee shop to be successful and to grow and create jobs. At the end of the day, Baltimore needs jobs,” Nwachu adds.
Another star in the Innovation Works portfolio is RunMitts LLC, headed by Susan Clayton. An avid runner, Clayton could never find a pair of mittens or gloves to keep her hands warm during cold weather workouts. So, she invented WhitePaws RunMitts. The former running coach’s mittens took off at a sprinter’s pace. In 2021, she was approached by Recreational Equipment Inc., better known as REI, which wanted to sell her mittens in four of its stores. She was making the mittens in her basement and knew she would have to scale fast, Nwachu said. Ignite Capital approved a $150,000 loan, with Clayton using $100,000.
“That was probably one of the fastest loans we approved,” said Nwachu, who noted that Clayton paid back the $100,000 within a year.
Shortly after the initial order, REI came back saying it wanted to carry WhitePaws RunMitts in 80 stores. Innovation Works connected Clayton with mentors and today they are working to expand sales to running stores and big box sporting goods stores like Dick’s.
Nwachu says making the popular mitts are perfect manufacturing jobs for Baltimore.
“You don’t need a college degree or a high school diploma. It’s a matter of creating, which is something that Baltimore knows too well,” he said.
These stories, Nwachu says, illustrate that “possibilities exist in Baltimore.”
What has impressed him is the fact that not a single borrower has defaulted on a loan from Ignite.
“People are just paying back the money because they know that it’s not just about them,” Nwachu said. “The beauty of social entrepreneurship is that folks are showing up with that mindset. There is this sense of responsibility to the broader pool that folks are showing up with, that makes it not transactional because we’re all fighting for Baltimore.”
Nwachu envisions a virtuous circle with social entrepreneurs leading the way and Innovation Works providing the support. A Travis Bell or Susan Clayton anchors a neighborhood that welcomes their business. Other entrepreneurs following and they feed off each other – the coffee roaster, mitten maker, restaurant, early childhood education center – selling goods and services and providing a network of brainpower and support. The businesses become part of the neighborhood providing jobs, income, and programs and services residents need.
Nwachu knows neighborhood transformations do not happen overnight, but he is pleased with what he is seeing as Innovation Works celebrates five years in business this year.
“Ultimately, that’s how we rebuild economics and neighborhoods is by having like businesses where people can spend money,” Nwachu said. “And then people want to live in those places because you have basic amenities next door. It’s the model that we know works.”