Across the nation, there are approximately 3 million American youth aged 16 to 24 who are neither in school nor working. These 3 million youth are disproportionately young men and women of color. A Brookings Institution study finds that in some places, young blacks and Latinos are up to 3 to 6 times more likely to be disconnected from the economy than young whites – and concludes that a young person’s success in the labor market today is largely shaped by place, race and education.

That means the deck is stacked against young people of color, especially those from low-income neighborhoods, who are often confronting the effects of living in concentrated poverty, experiencing discrimination and facing barriers to obtaining a high-quality education. So how can you level the playing field for these young people and give them a chance to realize their full potential?

One trend the Catalyst Funds team has been tracking is the rise of urban-serving businesses, which we think could represent a potential new model for social change. Through our investments in venture capital (VC) funds like Urban Innovation Fund, we’ve sought to learn more about how social enterprises can impact low-income people and create jobs, especially for people of color.

The Town Kitchen (TTK), an Urban Innovation Fund portfolio company, is seeking to even the playing field for young people of color, especially those from low-income neighborhoods, by serving “lunch with a purpose.” TTK is an industrial catering company that services corporate customers and employs urban youth. By providing youth ages 15 to 25 with entrepreneurial training, college course credit, and fair-wage employment, TTK is creating a pathway to upward economic mobility for young people so they can live, work, and build futures in their native cities.

Since launching in January 2015, TTK has grown from just four people working in a small kitchen to a staff of 22 people, and has delivered over 145,000 lunches to 700+ corporate clients including UC Berkeley, Schoolzilla and the Golden State Warriors. This exceptional growth has not gone unnoticed: TTK’s work has been recognized by Inc., Entrepreneur Magazine, Fast Company, and Sunset Magazine.

I recently connected with Sabrina Mutukisna, the co-founder & CEO of TTK, and had a chance to ask her a few questions about TTK and her experience in starting up a company.

What inspired you to start TTK?

I was raised in my parents’ drycleaner and grew up working all sorts of entry-level jobs. While I always knew the value of a college degree, by the time I attended UC Berkeley, I realized that navigating the education system was challenging – especially if your parents don’t have a college degree. I became passionate about supporting young people in higher education and creating pathways towards upward economic mobility. For young people in low-income communities, this begins with the stability of having a great job, like The Town Kitchen, coupled with mentorship and access to resources, such as opportunities for higher education. 90% of TTK employees, for example, are enrolled in college classes.

Employee Breakdown

47% of TTK employees are foster or re-entry youth

What does a typical day look like for one of the young people employed by TTK?

Each day really varies. Most of our youth employees work in the kitchen and begin their days around 7am. For those employees, 7am-11am is all about the hustle. We have to plate, pack and load hundreds of meals in under four hours. Some of our youth staff join our delivery drivers and serve our clients on-site while the rest of the kitchen crew prep for the next day’s service. We also have a few youth employees that work in sales and accounting – their days start around 8am where they’re working from a laptop or taking client meetings.

Employee Retention

81% retention rate at TTK

What factors have contributed to your strong retention rate?

As a company, we collaborate with local workforce development organizations to source and employ urban youth. We recruit the majority of our workforce from the graduate pool of the Youth Food Project’s Culinary and Food Entrepreneurship Training program, an Oakland-based non-profit. They support with retention by providing case-management services and wraparound support to our youth, helping with things like housing and childcare. In addition, at TTK we place a strong emphasis on internal promotion, work to integrate concepts of restorative justice and have a culture committee that plans community-building events like bowling parties and movie nights. These efforts have resulted in our stronger-than-industry-average retention rate of 81%, compared to the 39% you usually see.

How did you overcome the early-stage financing gap that many urban-serving businesses face? Where or to whom did you look to raise the early capital needed to get your business off the ground?

Early on, we leveraged crowdfunding to iterate and test our model. We used a 0% interest loan from Kiva Zip to print custom boxes and test our menu. We raised $42k on Indiegogo to launch, with $25k going to capital expenses. While crowdfunding can be a challenging experience, the network of supporters helped with everything from branding to generating business leads. After crowdfunding, we bootstrapped to $1 million in revenue in 2016. In 2017, we raised $1 million in seed funding. Urban Innovation Fund led the round and was joined by Better Ventures, Rose Culinary Ventures, Slow Money and SheEO.

What’s next? Five years from now, what do you hope TTK will have achieved?

Right now, there are more unemployed young people in the world – 71 million– than we’ve ever had at any point in history. That’s a lot of unrealized potential. In five years, we envision The Town Kitchen as a national company, with a food hub in every major urban city that’s employing thousands of young people. Ultimately, we hope to be an example of a social impact model that people can look to in creating innovative, long-term solutions for the young people who need it most.