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Is entrepreneurship the way from prison to prosperity?

Marquis Hayes, a 34-year-old native of the Bronx, is a chef with an entrepreneurial spirit. As a boy, he hosted “Youth Supper Club,” a once-a-week gathering of friends; he baked “soul pockets,” stuffed with whatever they could afford: canned salmon, cheddar cheese. As a teenager, he made a small fortune (each week, he says, he grossed as much as $30,000) cooking high-quality crack cocaine. In prison, he turned an old bed frame into a sizzle plate and his cell into a restaurant; if he cooked for them, fellow inmates would get their crime-family relatives to send him money. When he got out, he sold quick-service food from his apartment – and, when word got out, former New York Knicks player Alan Houston commissioned him as a contract chef.

Marquis Hayes started his catering company after attending Defy Ventures.

Marquis Hayes started his catering company after attending Defy Ventures.

Today, eight years after completing a five-year sentence in state prison, he has channeled his tendency to capitalize on cooking into a successful catering company and an up-and-coming farm-to-table restaurant in Cooperstown, New York; he has catered for Bill Clinton and Michael Bloomberg.

Hayes credits this successful transition, in part, to Defy Ventures, an “entrepreneurial training” workshop for people returning from prison.

Defy is one of a small but growing number of programs that help former criminals adapt their money-making skills to the world of above-board capitalism, providing lessons in writing and pitching a business plan, marketing, and managing finances. Participants are also mentored by executives and offered venture capital to get their start-ups off the ground.

Over the past few years, programs like Defy, Project ReMADE (Stanford Law School), and LIFE Reentry Program for Women Prisoners (Oregon and Washington) have been debuting to great acclaim, promising to capitalize on ex-cons’ latent entrepreneurial energy. The U.S. Department of Labor, too, has caught hold of the idea: an online version, designed for the formerly-incarcerated and tentatively dubbed ReEntrepreneurship, is due for launch in 2015.

“Entrepreneurship training is a major new possibility for reentry program development,” says Jeremy Travis, president of John Jay College and an expert on how prisoners adjust to life after incarceration.

Not everyone shares the enthusiasm. Glenn Martin, a former prisoner who runs a reentry program called Just Leadership USA, says that glamorous success stories like Hayes’s are the exception – and a distraction. Reentry programs, he says, should focus on providing ex-prisoners with housing, employment, and political power, rather than emphasizing the niche possibility of starting a business.

“These programs line up with our capitalist notion about people pulling themselves up by their bootstraps,” he says. “But a lot of these guys don’t have boots.”

The number of former prisoners who stand to benefit from programs like Defy, he says, is “infinitesimally small,” particularly since the failure rate of all start-ups, let alone those started by people with a criminal record, is about 75-80%.

At first glance, these programs seem perfectly suited for the re-entering population.

For one thing, says Catherine Hoke, the founder of Defy, many of these men were entrepreneurial already. Drug dealers, gang leaders, and prison hustlers have a mindset and a skills set aligned with starting a new business. They are ambitious and acquisitive. They know how to lead, manage employees, handle money, calculate product loss and profit margin, chat up new customers, and brand themselves as having the highest-quality product.

“These programs line up with our capitalist notion about people pulling themselves up by their bootstraps,” he says. “But a lot of these guys don’t have boots.”

Coss Marte, a former drug dealer and Defy graduate who now runs a “prison-style” fitness business, agrees.

“Back then,” he says, “I had 10,000 business cards and 20 employees, and was earning over a million a year. Now, my boot camp has 400 customers and counting.

“What I do on a day-to-day basis is extremely similar. Networking; not being afraid to ask – for a business card, for help, for follow-up. Handling money and employees; branding; being on time every time… I was doing all of this before.”

And entrepreneurship offers an alternative to conventional employment, which is often hard to find if you have a criminal record. (And, because they have been “out of the game” for so long, ex-cons are often in the unusual position of being both older and less experienced than other applicants.)

Says Travis, “This may be a new type of reentry program, but because it’s so difficult for ex-prisoners to find work, it’s not new to see them learning to make money on their own.”

Tyrone Mullins, a former gang leader, now ReMADE graduate, operates a rapidly-expanding Bay-Area company, Green Streets, that provides recycling, composting, and environmental education services to residents of low-income housing. (He’s been so successful that he was invited to the White House as a “Champion of Change.”)

“Sure,” says Mullins, “there was a job – once – installing a solar panel on top of our building. But it was a two-month gig… In neighborhoods like mine, the jobs there are are minimum-wage, temporary, and, most of all, not available to people like me.

“But now that I'm a businessman, I see that I can create something more permanent – by my own self.”

The notion that a little entrepreneurial spirit can be a fix for the down-and-out, the quintessentially American corner-hustler-to-corporate-owner story of men like Hayes, Mullins, and Marte, is appealing. It’s particularly gripping to funders, many of whom are themselves entrepreneurs.

But, as Martin points out, those success stories belie the reality for most ex-prisoners.

“Why should we be so laudatory about a type of program that’s helpful only to the very, very, very rare ex-prisoner with existing entrepreneurial skills and a dynamic business idea; a quality high school education; and the willingness to go without income for awhile, which is the first thing any new entrepreneur has to commit to?”

Joanne Page, executive director of the Fortune Society, one of the nation’s largest reentry programs, agrees that “entrepreneurial training” neglects the people who are really struggling – which, she says, is the majority of returning prisoners.

“These programs do help the ‘few,’ the ‘best in class,’” she says. “But the greater need, when it comes to reentry, is for more and better programs with a low threshold and an open door, with trained social workers who are ready to accept and care for the overwhelming majority of returning prisoners: state babies [those who have been in and out of the system from an early age], people with no education or a drug addiction, and the mentally ill.”

But Debbie Mukamal, the founder of ReMADE, says that’s a false standard.

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“Almost every type of reentry program,” she says, “is actually for only a fraction of returning prisoners. Drug rehab, college readiness, creative writing workshops – these aren’t viable, useful, or appealing options for every single person, but we think of these things as really valuable.”

More importantly, say Hoke and Mukamal, their programs do more than allow the born entrepreneurs to thrive. Entrepreneurialism is an aptitude – and an attitude, they say – that’s useful and empowering for everyone.

“Confidence, setting and meeting goals, organization,” says Hoke. “Being transparent instead of trying to be ‘hard’; getting used to meeting new people. Not eating in five minutes like ex-prisoners are used to doing... These are skills that all former prisoners could benefit from having, whether or not they start a business.”

Catherine Hoke, Defy Ventures Founder and CEO, in 2012.

Catherine Hoke, Defy Ventures Founder and CEO, in 2012.

“It’s the skills of embarking,” Mukamal adds, “that this group so needs.”

With the help of Defy, for example, Hayes says he developed social capital (his new “best buddy” is former New York Stock Exchange CEO Duncan Niederauer), confidence and social skills (his fiance is a creative director for Ralph Lauren), and the ability to present himself as a businessman (he learned how to tie a tie, shake a hand, and “pitch himself”).

Yet reentry remains a particularly precarious time, Page says -- financially, socially, and emotionally. It’s one thing to affirm that returning prisoners deserve the opportunity to be ambitious, she says, and quite another to suggest they pursue it in the first few months or years after getting out.

“Prison is about finding ways to accelerate time,” she says, “and being back is about trying, desperately, to slow it.”

Hayes and Mullins concede that the emphasis on hustle is itself a kind of hustle. Given that almost all start-ups, including the ultimately successful ones, are slow to provide dependable revenue, entrepreneurs with criminal tendencies are tempted to look elsewhere for income.

“For a long time,” says Mullins, “I felt like I had one foot in and one foot out. I was trying to seem like a businessman, but there were real problems with alcohol, drugs, and my anger. I went back to prison for getting in a fight.”

And when former inmates like him have already invested so much in a venture, Hayes adds, they’re tempted to throw good money after bad – and end up in serious debt.

The success stories like Hayes and Marte impress potential funders. But the majority of participants – overwhelmed with having to pitch themselves to a scary, unfamiliar white-collar crowd, during what is already the most overwhelming transition of their lives – fail to get a business going. Worse, they aren’t offered long-term, wrap-around support.

“A lot of these guys crash and burn,” says Page. “You can’t have a business-school mentality that despises failure when you’re working with a vulnerable population like this one.”

But at its best, says Russell Pyne, a venture capitalist and one of the the mentors for ReMADE, the entrepreneurial training model respects former prisoners in a way that providing basic social services does not. ReMADE, he says, brings felons onto the Stanford University campus, where they’re treated as serious adults by venture capitalists who would normally be investing in big-time Silicon Valley start-ups.

As Mullins describes the feeling, “When I got home after pitching my business idea, I said to myself, ‘I have arrived. I can co-exist in their world.’”

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