Rising to New Heights: Alfa Demmellash and Rising Tide Capital
Alfa Demmellash of Rising Tide Capital helps local people make their business dreams a reality.
It’s impossible for Alfa Demmellash to name just a few favorite success stories out of the 1,000+ entrepreneurs who have come through Rising Tide Capital, a Jersey City-based nonprofit that helps people start and grow businesses.
There is Care About You, founded by Angela McKnight, which provide services for senior citizens and Bus4Us, started by Beverly Williams and Stephen Hinchey, that transports school children. There is also Cazz Fleming who launched her own line of cosmetics and Dana Osborne-Biggs handcrafting leather goods. But when Demmellash talks about the Bergen-Lafayette Montessori School, she gets a special glow.
Decades ago and thousands of miles away from Jersey City, Demmellash was growing up in Addis Ababa, Ethiopia. When she was just 2, her life suddenly changed.
“My mother left during the time of Red Terror in Ethiopia [a violent political campaign] perpetuated by Mengistu Haile-Mariam, which started in 1977,” says Demmellash. “After my mother’s older sister was gunned down in the streets, my grandparents feared for my mother’s life and encouraged her to leave the country for the United States. Her younger sister, my aunt, who was 16 at the time, volunteered to be my caretaker while my grandparents grappled with providing for many who were displaced and caught up in the chaos.”
Demmellash says her mother sent money, earned by being a waitress and seamstress, back home to Ethiopia.
“The only thing she said was ‘You have to spend it on education,’ ” Demmellash recalls. That hard-earned money went to pay for Demmellash’s tuition at an Ethiopian Montessori school. As Montessori schools worldwide follow the approach developed by the noted Italian physicist and educator Maria Montessori, it turned out to be not so different from the one that Rising Tide’s services helped found in Jersey City, decades later.
HER OWN JOURNEY
The journey from Africa, to Boston, to Harvard was not easy. Alfa rejoined her mother in the U.S. as a teenager. “I arrived in Boston when I was nearly 13 years old. My mother had saved enough money to send me to a nearby Catholic middle school,” Demmellash says.
After attending a public high school, she applied to Harvard University, never assuming she’d get in. She says, “In the end, Harvard came through not only with an acceptance, but with the most generous financial aid package. Even though I graduated with minimal college debt by today’s standards, it still took me 10 years to pay it off.“ When I speak to young people interested in college, I always tell them not to neglect applying for the more well-resourced colleges and universities because if they get it in, they often have more resources to support students who can’t afford their tuitions.”
Demmellash graduated cum laude in 2003, and then sought a career path to address issues that had affected her own life like the multi-generational poverty that she had broken free from. “Ultimately, it kept coming back to ‘How do you address poverty? Jobs. But where do jobs come from?’ ” she says. “It’s estimated that 90 percent of all new jobs are created by small businesses, local businesses. So how can we create long-lasting, sustainable local businesses that can hire local residents? Where do we find these people who are inclined to start businesses and help them grow?”
STARTING TO RISE
To help start those businesses, Demmellash and Alex Forrester—her Harvard classmate and eventual husband—founded Rising Tide Capital in 2004. Demmellash took the reins as chief executive officer, with Forrester as chief operations officer. (They have a similar division of labor at home. Demmellash does the cleaning while Forrester tackles the cooking.)
The two ended up in New Jersey after Forrester’s sister suffered a brain hemorrhage, and they both returned to the state to help his family care for her. (His father, Doug, Rising Tide’s founding chairman, was a candidate for governor in 2005.) In deciding where to center their fledgling organization, they looked at the state’s other urban areas such as Camden and Newark, but decided that Jersey City had a vibrant community of entrepreneurs.
“We felt that here, we were surrounded by people from all different backgrounds who had this creative energy, and we just wanted them to get into the same room and be a part of their community,” Demmellash says.
The backbone of Rising Tide Capital (RTC) has been its Community Business Academy (CBA), a 12-week training session where participants pay between $125-$295, a sliding scale based on income, to receive intensive training on how to start, run, and expand a business. Rising Tide also provides follow-up coaching and mentoring, and can connect graduates with microlenders.
The program works. In comparison to only a 50% national rate for new businesses reaching the five-year mark (as reported by the U.S. Small Business Administration), RTC entrepreneurs have an 87% survival rate.
When talking about his wife’s success with Rising Tide, Forrester’s explanation hints at his background as a philosophy major. “To really change things, you have to be able to cast a vision, something that people can hold on to through the murkiness of the journey,” he says. “That gift of vision that is such a critical part of real change. She has that gift.”
A TIDE OF SUCCESS
Entrepreneurs may be good at their chosen passion, whether it be teaching preschoolers, creating a line of artisan desserts, or designing a website. But Demmellash says it can be hard for new business owners because there are so many “spinning plates” that have to be kept in the air.
“There’s marketing, customer service, business management, financial planning, and building a customer base. Most entrepreneurs are good at one or two things but they need the other management pieces,” she says.
Myani Lawson, founder of the Bergen-Lafayette Montessori School, and RTC graduate recalls, “I knew about education, but I didn’t know about running a business.” Lawson had previously created a nonprofit offering arts and enrichment classes in public schools, and also ran a preschool readiness program out of her home. She explained that Rising Tide helped her understand her target market, weigh her options in where to locate the school, settle upon the right pricing, and negotiate her lease.
The school opened in 2014, and has 17 students between ages 2½ and 6, with room to grow. “I’ve always wanted to open a school and now I’m doing it,” Lawson says. “Alfa and her husband are helping so many people with their organization and it’s because of their passion.”
“Every instructor of the Community Business Academy has prior experience starting and growing a small business,” Demmellash says. “We also have our network of more established local business owners and professional service providers who provide discounted and pro bono services.”
Consultants available to help CBA graduates include web designers and developers, accountants, graphic artists, copywriters, lawyers, branding experts, and financial advisors. This is part of the ongoing network of support that RTC provides to entrepreneurs long after graduating.
SUPPORTING LOCAL STARTUPS
Rising Tide Capital has a $2 million budget, with major supporters including Bank of America, the F.M. Kirby Foundation, and JP Morgan Chase. Another major supporter, Citi Community Development, was eager to sing Rising Tide’s praises.
“We recognize the tremendous impact that entrepreneurship has on strengthening the financial health of underserved individuals and creating jobs in our communities,” said Eileen A. Auld, Director of the New York Tri-State Market for the company. “We are proud to partner with organizations like Rising Tide Capital to help empower residents across Hudson and Essex counties.”
Rising Tide also receives $220,000 annually from Jersey City. “Alfa’s vision to help individuals fulfill their dreams of becoming small business owners has improved the lives of countless Jersey City residents,” says Mayor Steven Fulop. “In Rising Tide, she has created a model for others to follow. Thanks to Alfa’s dedication, Jersey City residents are starting businesses, employing their neighbors, and improving their community.”
Another politician was also impressed with Rising Tide Capital. In a 2009 speech at the White House, President Barack Obama singled out RTC’s efforts. “If we empower organizations like [Rising Tide Capital],” the President said, “think about the number of young people… whose lives we can change, the number of families whose livelihoods we can boost, the number of struggling communities we can bring back to life.”
FAMILY AND FUTURE
After rejoining her mother in the United States, Alfa realized how hard her mother had worked, and how difficult it was to get ahead. “She was very smart and very good at what she did, but she didn’t know how to get out of the place where she started,” Demmellash says.
She and Forrester have a 2½-year-old son, Noah, and welcomed their son James last August. “I always used to think of parenting as the angle of responsibility, but as these little people come into my life it’s really astounding how I’m even more admiring of my mom, even more connected to her,” Demmellash says. “I’m amazed by her fortitude of knowing she had to leave me behind, to be a refugee, to go on to make a better life for us.”
Understanding that type of struggle first-hand gives Demmellash a window into the lives of many of the people who come through Rising Tide’s doors. Though the programs are open to all, about 80 percent of RTC clients have been from low to moderate-income backgrounds.
“Every day I wake up knowing that so many of the women we work with at Rising Tide are single moms who are going through struggles that I can’t even understand,” Demmellash says.
When asked if she ever considered using her Ivy League pedigree to snag the type of high-paying public sector job that many of her peers have, Demmellash laughs.
“I used to get asked that question all the time,” she says. “When I graduated, I vowed to spend the first 10 years of my career going to wherever I felt the calling to make a positive contribution to the world.”
Rising Tide celebrated its 10th anniversary in 2014, so that deadline has passed. And Demmellash says she’s even more devoted to the organization that began in their old Jersey City apartment.
“I would say that I’m even more determined not to run off and get a corporate job,” she says. “More than ever, I think we need to make the world a better place, because now my little person is living in this world and that changes your whole perspective.”
Rising Tide Capital is located at 334 Martin Luther King Drive, 201.432.4316. For more information, visit risingtidecapital.org. This article originally appeared in the 2015 Fall issue of JCI Magazine.
Photos: Claire Pedulla, Top Photo: The Rising Tide Capital Staff