The 22,000-square-foot structure at 700 Kalamath Street is heavy on windows and open space, with a fireplace and sweeping views of the Front Range. In October, construction will begin on a community event center, adding to the existing technology center, entrepreneur resource library and youth innovation lab, which includes a place for transient teens to lock up their work. The building also doubles as the Art @ Kalamath gallery, showcasing local artists through partnerships with + Gallery, Shannon Long Studios and Sandy Carson Gallery, and is home to Concierge Colorado, KGNU radio and Deproduction, which runs Denver community television.
"It's really an environment of inspiration," Hostetter says.
And as far as she's concerned, the risk was worth it, especially since the building embodies the entrepreneurial spirit she works so hard to promote. Hostetter has been the driving force behind this micro-lending business for nearly ten years, through various mergers and name changes. She's watched the staff grow from two employees to sixteen, the number of clients served from 300 to 3,400. And last November, she got to see the organization that started with 700 square feet inside an incubator move to its own home. Now she's witnessing the plans for that home come to life.
"Most nonprofits, we're often put in a dark corner someplace," she says. "Micro business is about going for something that nobody but your mom believes you're going to get to. It's about going there, to that place when you go to bed at night you turn on the radio so you don't hear the voice in your head that says, 'You're crazy. What are you doing going for this dream?' That's what we're asking our entrepreneurs to do every single day. Do we ask them to do it in a dark, dingy, smelly, leaking-roof, hole-in-the-wall, doesn't-talk-about-success building, or do we ask them to do it in a place that says, 'This is where you belong -- here and beyond it. This is beyond where you thought you could get, and sweetheart, you're already here. Think about where you could go.'"
Jan Campbell, president of MBD's board and a senior vice president with Wells Fargo, doubts this latest leap would have occurred without Hostetter's leadership. "As a manager myself in the corporate world, you never like to say that your management is irreplaceable, but we wouldn't be here today having accomplished what we have without her," Campbell says. "She's the one in the forefront creating the vision. We spend our time running after her."
Hostetter had a different life plan when she stumbled upon micro enterprise. Ten years ago, the Denver native was married, working multiple jobs and studying at Metro State, determined to work for the United Nations. Then she found out she was pregnant. "I decided to change my life," she says. "Instead of working for world change, I thought I would look at change domestically." She came across a tiny ad in the newspaper and applied for a part-time position at Colorado Capital Initiatives. "This is it," she remembers telling her husband not long after starting the job. "This is what I want for my life's work." In six months, she was program director. A year later, she was executive director.
By definition, micro enterprises are smaller than small businesses. Often in retail or the service industry, such endeavors usually have five or fewer employees and need less than $35,000 in start-up or expansion capital. Though their economic impact may seem insignificant alone, Hostetter says it's these smallest of small businesses that lend a city its culture and provide communities with avenues out of poverty. "There's this thing that micro enterprise can do," Hostetter says. "I truly believe it will change the world and the economy, and it's not new. It's the idea of owning your own business, providing for your family and giving back to the community. That's why I fell in love."
Colorado Capital Initiatives, founded in 1993, first changed its name to PACE, or People Assisting Community Entrepreneurs, before settling on Micro Business Development in 2002. While other micro lenders floundered, MBD acquired Colorado Microcredit in 2002 and then took over the for-profit Business Capital of Colorado in 2004. What started as a lending institution for high-risk business owners unable to qualify for traditional loans has evolved to incorporate business counseling, technical resources, youth outreach and financial literacy training. MBD actively targets poor communities by building relationships with the agencies that serve them. Many times, entrepreneurs come to MBD after an acquaintance has suggested they turn a skill into a business. Hostetter describes MBD not as a lender, but as a partner: "It means we get to know all your deep dark secrets, all the skeletons in your business closet. If you're looking for a quick financial fix, we're not who you want. We're a long-term strategic partner."
One of her first partners was a man named Mike McCrea, better known as Big Mike. He had left his truck-driving job to start Big Mike's BBQ after his employer and co-workers kept requesting that he cater their events. When Hostetter asked about his dream for the business, he told her he was going to be the Bill Gates of barbecue. Big Mike went on to win various awards and contracts, and was recently featured on the Food Network's Food Finds. Today his rubs and sauces are sold in high-end markets all over Colorado.
"I think he's one of my favorite success stories, because it hasn't always been a success," Hostetter says. "The issue for a micro entrepreneur is that it's not just about your product or your service. If it was, Mike and 95 percent of them would be successful."
Back when Big Mike first came to MBD, everyone who worked at the nonprofit knew every client. When Boulder Beverage sold a case of their mixes, Hostetter would get an e-mail: "Argonaut bought a case! Run out and buy something from Argonaut!" And everyone would.
By the time Erin Loughrey came to MBD in 2002 with her idea to start a doggie daycare, the organization was working through its growing pains. Decisions as seemingly insignificant as whether or not it was "right" to raise the loan-application fee from $25 to $35 were tearing the office apart. But Loughrey -- with no capital, credit or assets -- was so grateful for MBD's loan that she threw in an extra $10 as a donation. Now Dog-Topia boasts hundreds of clients and is in a larger space thanks to a second loan from MBD. Loughrey paid back her first loan, making her part of the 96 percent of MBD clients who have done so, and part of the 80 percent who are still in business after three years. If clients fall behind, MBD works with them to get back on track; only those who don't make an effort to pay are sent to collections. MBD made a total of 100 loans in its first seven years; this year it's on track for 200. Hostetter's goal is to grow the loan pool, now at $1.5 million, to $4.5 million, so that it becomes self-sustaining. If that happens, supplemental funds from donors and grants -- just last week, MBD received a $500,000 award from the U.S. Treasury -- could be invested in experimental programs, such as a project with the Colorado Coalition Against Domestic Violence that trains counselors to teach women entrepreneurial and financial skills.
But first the company needs to raise $5.3 million to cover its $3.5 million bond issue and building improvements. MBD has five years to pay back the bondholders, with an option to extend, but Hostetter doubts that will be necessary: The nonprofit has already raised nearly $2 million.
A longtime client recently came to the center for the first time, and when he saw the resource library, he took a deep breath and said, "This is a place where you can learn."
"Exactly," Hostetter whispers.
