Offering guidance on growing a home garden, donating a few dollars to the less fortunate, and connecting a mom with a good preschool and a job seeker with a job are all easily-apparent acts of service. What’s not so apparent, however, is the fact that these aims double as the ambitions of rising startups, companies now under the tutelage of the urban accelerator known as Tumml.
Tumml CEO and Co-Founder Clara Brenner, along with President Julie Lein, is attempting to use this non-profit accelerator as a trigger for urban investment and the continued growth of a new industry in civic service.
“We want to show people that you can be a startup in the space, be a social entrepreneur in the U.S., and be successful,” Brenner said, referring to Urban Impact Entrepreneurs, a term coined by Brenner and Lein to identify companies that develop products and services that solve specific city challenges.
Brenner said Tumml was founded in 2012 shortly after she and Lein graduated from the Massachusetts Institute of Technology, both earning MBAs and both taking to the notion that civic good could be more than just “good;” it could become a framework for a business model that is dually profitable and impactful.
Brenner and Lein we're inspired to create Tumml from their previous work in civic-minded companies. Lein had worked at Revolution foods, a company that provides healthy school meals for children, while Brenner worked at Fundrise, a startup that allows local citizens to invest in large community real estate ventures.
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“We were just really blown away by the incredible social impact that these for-profit companies were having in the communities in which they were operating, and also by how rapidly they were scaling,” Brenner said.
Hoping to create a vehicle to support an industry of civic good while at MIT, the duo set themselves to research and harnessed Lien’s previous experience as a political pollster to conduct a study of entrepreneurs contributing toward urbanized social improvements.
“We didn’t have any type of language to explain to anybody else what we were talking about, what these startups had in common,” Brenner said.
The research and polling uncovered a potent find: Entrepreneurs who attempted to solve urban problems were less than half as likely, compared with their more traditional peers, to secure enough seed funding to launch their businesses.
“Obviously, a huge disparity!” said Brenner.
Delving into underlying causes, Brenner said the study revealed that the reason for the lackluster investment stemmed from two major roadblocks: the first, that investors weren't fond of the unproven space, and the second, that urban entrepreneurs have to solve problems based in a physical environment — compared the more affordable digital one.
The study’s other takeaways showed a lack of communication and collaboration from government officials, as well as city regulations varying from city to city to such a dizzying degree that they prohibit expansion.
The Tumml Solution
Attempting to be an answer to the troublesome challenge of seed money, Tumml was supercharged through the philanthropic backing of Accela, a government software provider; the Nixon Peabody law firm; and the Blackstone Charitable Foundation, a firm promoting entrepreneurial activities.
Though the majority of revenue for Tumml currently springs from the 501(c)(3)’s philanthropy support, Brenner said the long-term vision is revenue generated from equity taken from the accelerator’s civic-minded companies. Entrepreneurs and sprouting companies fortunate enough to be selected for Tumml’s four-month accelerator program are furnished with $20,000 in seed funding, in exchange for 5 percent of their company’s equity.
“We’re putting our money where our mouth is,” Brenner said of Tumml’s strategy. “Our lens has helped us focus on companies that are incredibly strong in terms of social impact, but also they’re ability to scale.”
Some of these companies include Handup, a mobile donation platform for the homeless and less fortunate; Kid Admit, an online platform to help conduct parents through the preschool admission process; Earth Starter, a company that produces all-in-one garden systems for city dwellers; and WorkHands, a company vying to be the next Linkedin for the blue collar working class.
Telling signs the Tumml strategy is working, Brenner said, can be seen in the number of investors taking advantage of the group's growing list of promising startups. The companies who’ve completed the Tumml accelerator, Brenner elaborated, have gone on to to secure significant funding, not just from a single investor, but from multiple.
“That type of investment," Brenner said, "really validates our theory that you need to create strong businesses that are going to last in order to create a significant social impact."