POCD-Prisoners, Opportunity, Context, Deal

In a presentation hosted by the Social Enterprise Club, Catherine Rohr, founder and executive director of the Prison Entrepreneurship Program (PEP), and Chris Quadri, PEP grant writer and former program participant, shared how PEP is changing the lives of inmates.

One hundred thousand dollars in sales per week, 90% net margin, 90% repeat business. As an investment banking teaser, this company profile would have generated widespread interest among the investment community-had the core product not been crack cocaine. A large percentage of inmates go to prison as seasoned entrepreneurs, having run highly successful enterprises such as drug rings and gangs. They know how to manage others and get things done. They are passionate, intelligent and willing to take risks. Even the most unsophisticated drug dealers inherently understand business concepts such as competition, profitability, risk management and the development of proprietary sales channels. What if these influential leaders ran legitimate companies?

To help us answer this question, Catherine Rohr, founder and executive director of the Prison Entrepreneurship Program (PEP), and Chris Quadri, PEP grant writer and former program participant, visited the HBS campus, September 19th. In a presentation hosted by the Social Enterprise Club, Catherine and Chris shared their stories and showed us how PEP is changing the lives of inmates participating in the program. Below are some of their thoughts:

Catherine Rohr
Founder and Executive Director of PEP

What is the Prison Entrepreneurship Program (PEP)?
PEP is a Houston-based nonprofit organization whose mission is to stimulate positive life transformation for executives and inmates, uniting them through entrepreneurial passion, education and mentoring. PEP engages the nation’s top business and academic talent in an innovative solution by creating high-impact service opportunities.We constructively redirect inmates’ talents by equipping them with values-based entrepreneurial training-enabling them to productively re-enter society.

How and why did you develop the PEP concept?
The idea for PEP came about in April of 2004 at a prison visit in Texas when my husband, Steve, and I spoke with a former inmate who started a very successful handyman business. We offered to help him with his business strategy, and in the process, realized that inmates and executives have much more in common than one might think. We figured that if inmates’ entrepreneurial passions and influential personalities were properly channeled, they could become successful and productive members of society.

Beginning in September, Steve and I dedicated our efforts to PEP and started building the organization. I took a 75% pay cut from my investment work (with the other 25% providing our start-up funding), Steve turned down a job offer to launch PEP on a full-time basis, and we moved to the ghetto to live among those we serve. We literally invested our entire personal savings in this program.

I developed the PEP concept for two reasons. First, I saw tremendous opportunity and untapped potential in these inmates. I had seen human beings who had messed up, rather than “hardened criminals.” I saw these creative, bright, risk-taking, entrepreneurial individuals who were hungry for knowledge and a fresh start in life. The second reason that I developed this program is because after seeing the need, I was struck with an overwhelming sense that this was my calling in life.

What motivated you to transition from the venture capital industry to the non-profit sector and PEP?
Although I loved the VC/PE world and my work, nothing compared to what I experienced with our participants. I look at it this way: in VC, I was making money and making money for others. Today, I basically still do VC work, but with a higher risk demographic, and without making much money at all, but it’s the most rewarding work I’ve encountered. Making money in itself never satisfies. Equipping others to live up to their potential is incredibly satisfying. I always thought about this question: “If I died today, why would my life matter?” I knew that the only real impact-or purpose-was the difference I made in the lives of others.

What are some of the results of PEP since it was created in May 2004 to date?
 Graduated 165 inmates in two prisons (currently conducting its fourth business plan competition with a class of 65 additional participants set to graduate in October 2006).
 Recruited more than 200 top-level business executives to participate in 13 prison events.
 Maintained 90% participant employment rate (currently at 100%), typically within one month of release.
 Launched Entrepreneurship Schools in Dallas and Houston.
 Assisted 20 participants in the launch/operation of entrepreneurial businesses.
 Assisted two inmates in filing provisional patent applications.
 Launched PEP Opportunity Fund, a for-profit venture capital/debt fund.

What are the growth prospects for PEP?
We believe PEP has the potential to become a nationwide organization, impacting the lives of hundreds of thousands of inmates, former inmates and business executives over time. Within three years, we hope to be working in several states. PEP is already statewide in Texas, and our organization has more than doubled each year.

How can HBS MBA students help PEP toward its goal?
Students can serve as MBA Advisors beginning in December. This will be our third time working with HBS students. We ask for up to a one-hour commitment per week for roughly a two-month period. As an MBA Advisor, you will be matched, one-on-one, with an inmate at the Hamilton Unit in Bryan, Texas. You will review one section of his business plan each week and will provide conceptual and grammatical feedback. Inmates don’t have access to you nor receive your personal contact information; rather, a PEP staff member will email you with your editing assignment each week.

Additionally, HBS students can participate in our upcoming MBA Day in Prison. This provides MBA Advisors the opportunity to personally meet and work with their assigned inmates. MBA Day is tentatively planned for Saturday, February 17 (all day) at the Hamilton Unit. PEP can assist MBA students with fundraising to cover the cost of the trip.

Interested students should contact PEP’s Business Plan Competition Manager, Phi Tran, at (832) 767-0928 or by November 10.

Chris Quadri
PEP Grant Writer and Former Program Participant

What is your role in PEP?
I am PEP’s grant writer. Aside from writing grants, I spend much of my time meeting with potential donors and volunteers to educate them about PEP and spread community awareness surrounding our cause.

How did you find out about PEP and why did you decide to get involved?
I found out about PEP when I heard Catherine speak at the prison that I was at in Bryan, Texas. She held a “Kick-off” event in order to spread the word about PEP’s service offerings. I became involved because I saw PEP as an opportunity to attain some real-world skills and knowledge (business plan and résumé building) and get connected to influential professionals in the community to which I was being released.

How is PEP helping inmates in U.S. prisons?
PEP is opening doors for formerly incarcerated men in a variety of ways: 1) Equipping them with the skills they need upon release to enter the workforce and earn livable wages; 2) Providing them with the training and resources they need to start a small business of their own, including consulting professionals, executive mentors and access to a growing network of angel investors; 3) Supplying a network of service providers and professionals to assist them with their many reentry needs-from optical and medical care, to housing and job placement assistance; 4) Not to be overl
ooked, is the confidence and hope that is rekindled in many of the men through their PEP experiences.

What is the perception of prisoners about the service that PEP is providing?
In a word-unbelievable. To have the opportunity to be exposed to the variety of talent that PEP recruits into prison is viewed as nothing short of amazing. As a felon and a prisoner, it is very clear how you are looked upon by society in general-a man with a felony is forever viewed and treated as a threat and a nuisance. PEP represents redemption from our past. PEP is shattering an image that we felt we would be burdened with our entire lives, despite tangibly transforming our lives. It is truly a fresh start.

What message would you like to convey to MBA students at HBS?
If you are seeking a revolutionary service opportunity with an unbeatable social ROI and sustainable economic and multi-generational impact on the community, this is it.

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October 3, 2006
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