Detroit certainly faces challenges unique among big cities in the U.S., and even different from other industrial Midwest cities.
But the increasing number of entrepreneurs seeking capital to grow their businesses – and having trouble doing so – is not unique to just Detroit, says Jack Dorsey, founder and CEO of Square Capital (and founder/chairman of Twitter). He’s in town for this week’s Techonomy conference at Wayne State University.
He and I met at Human, a new retail shop on Cass Ave. that sells clothing and other merchandise made by Detroiters. It’s a fun, dynamic spot in the middle of what is a growing fashion district in the heart of Midtown.
“Procedures around getting capital are really difficult, even for businesses that are established. It’s not unique to a particular geography,” Dorsey said. “We see this all over the country, from St. Louis to New Orleans and even just outside of San Francisco.”
Square Capital is a program that helps businesses grow by giving them quick access to funds. It’s the advance capital arm of Square and Dorsey’s latest business venture.
Dorsey said the growing trend in local businesses was one inspiration for Square Capital’s creation.
“Smaller businesses now have the freedom to stay physically small and still have a global impact,” he said. “Six people can build something the entire world can use.”
“We want to do the same thing at Square Capital. Local sellers can be in a neighborhood in Detroit and have local character and soul, and still be a national company.”
Human Detroit owner Jill Drnek was a typical Square customer who received an email letting her know capital was available to her overnight, if she wanted.
She took Square Capital up on the offer and the money was in her account the next day. She will automatically repay it as she sells products using Square.
That’s how it works for all business that accept the capital. And paying back is flexible according to how much the business does in sales, as opposed to most traditional lending payment structures.
“I’m already farther along than I would have been and had I not received capital,” Drnek said. “ I was able to bring in a new employee and expand my online presence. It’s literally given me the opportunity to become more productive.”
Dorsey’s newest project is entirely based on trust between Square and its customers.
“We have a lot of information about every one of our sellers – they run a lot of their business on square,” Dorsey said. “It builds trust on both sides. As they continue to grow, there’s more and more trust around what they’re trying to do.”
“People should not be limited by tools, only by their ambition,” Dorsey added.
These tools should also be accessible to those interested in starting or growing businesses, even in impoverished areas like much of Detroit.
Certain areas within Detroit are being revitalized and growing. Midtown, including Human’s location, is no exception.
But there is also widespread acknowledgement it’s difficult to expand those opportunities to residents in neighborhoods and other areas with less access to education and training.
“We want to help every business thrive,” Dorsey said. “Whether you have metro PCS – or whatever you have in your pocket and use day to day, you can simply download our application and get started.”
“We want to make it accessible to more and more people. That’s our goal and that’s our job.”