Deal to Watch: Matching the Formerly Incarcerated with Life-Changing Jobs

Key Stats:

Summary

70 Million Jobs has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Problem

The United States has the highest incarceration rate in the entire world: 655 out ot 100,000 people in the US are incarcerated (as of 2016). The United States houses almost 25% of the total global prison population, despite the fact that the US population is less than 5% of the worldwide population. 

Out of these massive numbers of incarcerated individuals in the United States, an estimated 650,000 people are released from prison each year. Job seeking is a top priority after leaving prison: formerly incarcerated individuals need an income to secure housing, food, and other essentials. Plus, employment reduces recidivism and increases the likelihood that ex-prisoners integrate fully into society. 

However, finding a job after getting out of prison is very difficult. Numerous studies have shown that employers discriminate against formerly incarcerated individuals when viewing resumes identical except for former prisoner status.

At the same time, the United States is experiencing record-low unemployment rates: 3.6% as of January 2020, close to the lowest since the 1960s. Employers are desperately seeking new hires, so the time is right to match potential employees seeking work with employers seeking to hire.  

Solution

70 Million Jobs is a jobs board and staffing business connecting formerly incarcerated individuals with jobs across the United States. 70 Million Jobs was founded by a former prisoner, Richard Bronson, who used his experience serving time for securities fraud to inspire a passion for post-incarceration employment. 

70 Million Jobs launched with a job board, soliciting employers to pay an advertising fee to list open positions on the site (similar to other job boards like Indeed, Monster, etc.). Formerly incarcerated individuals can browse and apply for jobs, and never pay a fee for their use of the platform. 

In 2019, 70 Million Jobs launched a staffing business to supplement its job board; now, the company serves as an employer of record, handling payroll, taxes, worker’s comp, etc. for its client employers.  

70 Million Jobs works with employers across a diverse range of industries, including manufacturing, construction, food service, customer service, administration, and technology. Clients include Uber, Sketchers, Denny’s, Jack in the Box, ADP, Safeway, and many more. 

70 Million Jobs has raised $1.4M in funding from leading investors including Y Combinator and Founder’s Fund. The company projects that 2019 revenues totaled nearly $200,000, and anticipates generating $3.5 million in revenue for 2020. 

Team

70 Million Jobs’ CEO is Richard Bronson, who started his career on Wall Street working for Lehman Bros. and Bear Stearns. He founded his own broker-dealer that grew to $100 million in annual revenue, and grew several consumer product and services businesses. Bronson was convicted of securities fraud in 2002, and spent two years in a federal prison camp. Since release, Bronson founded DoYouRemember.com, and devoted himself to post-incarceration assistance; he served as the Director of Defy Ventures, a 501(c)3 organization that provides second chances for those released from prison. 

Bronson leads a team of eight HR, operations, and marketing professionals. The team is projected to grow significantly following the close of 70 Million Jobs’ seed round: at least eleven other staff members ranging from software developers to recruiters are included in the company’s post-raise roadmap. 

Growth Plan

70 Million Jobs’ ultimate vision is to eliminate recidivism, a lofty goal that can only be achieved by significantly scaling its jobs board and staffing operations. The company’s immediate goal for use of its seed capital raise is to hire team members, including software developers, sales and marketing professionals, and recruiters. The company also intends to relocate to its own office. 

Beyond those immediate steps to scale, 70 Million Jobs will presumably leverage newly-hired engineering talent to refine its job board capabilities, at the same time that it expands capacity in its staffing business.  

Why We Like it

• Compelling concept and resulting market interest: 70 Million Jobs is addressing a societal issue that most everyone is aware of, and is led by a member of the population that the company is seeking to help. Richard Bronson has crafted a compelling narrative for the business, and leading investors have taken notice: 70 Million Jobs participated in the Y Combinator accelerator program, and has already secured $1.4 million in funding from leading investors.

• Increase of momentum on post-incarceration hiring: 70 Million Jobs is capitalizing on strong social tailwinds: politicians, non-profits, and employers are increasingly focused on reforming the criminal justice system, which includes providing quality post-incarceration opportunities. In fact, the Society for Human Resource Management recently created the Getting Talent Back to Work Pledge, signed by more than 1,000 organizations pledging to give second chances to those with criminal records. As more and more companies and organizations are spurred to become more progressive in hiring formerly incarcerated individuals, 70 Million Jobs is positioned to become the national leader in staffing solutions.
  
• Leveraging a proven business model in a new niche: Online recruitment sites make up a $10.3 billion dollar market in the United States, and 70 Million Jobs is echoing the successful business model of sites like Indeed (over $750 million in annual revenue) and Monster (over $575 million in annual revenue), but serves a niche not covered by other job sites. While 70 Million Jobs can likely never achieve the revenue of these huge players due to the finite market size of recently incarcerated individuals, full market coverage of that group would total over 650,000 jobs filled per year. 
  

The Rating: Deal To Watch

Richard Bronson has created an impactful, promising business in 70 Million Jobs. The company is addressing an undeniably significant need: employing the hundreds of thousands of individuals that leave prison and must secure gainful employment. It is operating according to standard, lucrative industry models for job boards and staffing, and is buoyed by America’s increased focus on criminal justice reform and truly rehabilitative justice. 

While it is unlikely that 70 Million Jobs grows significantly enough to become a candidate for public offering, acquisition scenarios do exist. Incumbent job sites could purchase the company to bolster their efforts in post-conviction hiring, or 70 Million Jobs could be bought by a conglomerate reminiscent of those that own Indeed and Monster. 

However, 70 Million Jobs does face risks. Incumbent players like Indeed could reasonably incorporate jobs for formerly incarcerated individuals into its site with minimal effort, eating up 70 Million Jobs’ market share. In this case, 70 Million Jobs’ only asset would be its expertise in staffing operations for companies hiring those with criminal backgrounds; while that capability could still be attractive for acquisition, the deal valuation would be much lower. 

70 Million Jobs is accomplishing a tremendous social goal and may well generate sizable revenue: the potential of this double bottom line makes 70 Million Jobs a Deal to Watch.