![]() In terms of complexity, we see part of our role as advisors and intermediaries to simplify things so that they can be presented in a way that is not too daunting. How can we help increase engagement on the catalytic end of the impact investing spectrum?Īner: You touch on an excellent point. Several of you mention the blending and layering of capital that comes together, and this complexity can be a barrier for impact investors. This is all so inspiring, but as we know, it is a pretty complex picture. That's where we look at the power of bringing different forms of catalytic capital together for a deep place-based effort.ĭebra: Thank you, David. We can get a small amount of catalytic capital from investors who would never take one of these transactions on their own, and be set up to align with programs like SSBCI. This is a very bespoke place-based effort with deep community ties. They are launching a fund alongside their accelerator to support healthy food access and Native Hawaiian-led organizations and small businesses. On the other end of the spectrum, we are working with Hawaii Investment Ready on a place-based effort. We are now in the process of closing our first PRI’s and high net-worth catalytic investors, setting the stage for more institutional capital to follow. To launch that, we initially used a series of philanthropic capital to hire the team, pay consultants and lawyers, and get everything moving. One example of the use of catalytic capital is the launch of a real estate investment trust focused on expanding access to child care by owning child care properties and being the mission-aligned landlord for family-based child care, primarily for women of color. We often focus on small businesses and social enterprise transactions for diverse founders. David, can you share about your work, especially how catalytic capital plays a role in the place-based aspect of your investing?ĭavid: Mission Driven Finance’s purpose is to develop portfolios that will get capital to flow where it normally doesn't, but should. These are incredible illustrations of capital gaps - from solar panels in Navajo Nation to tech solutions that lead to a platform for Moderna. We provided capital so that they can refinance extractive loans, access patience relevant capital and have a path for growth.ĭebra: Thank you. However, it could grow to be a highly profitable, premium-wage, job-generating, mid-market company. They have several hundred employees but may not attract equity capital or private equity capital because they're not growing fast enough to meet their return profiles of those types of firms. Their mission is to help people in the military by providing a first source of jobs once they enter the civilian workforce. We were able to provide her with a million dollars in capital and substantially grow her business.Īnother example is a veteran-led business that helps provide security services to anchor institutions like hospitals, educational facilities, and utilities. She was a key solution provider to Moderna as part of the COVID vaccine solution. She was an engineer who had worked for several very large pharmaceutical companies and understood the need for more consistent compliance control. This woman saw that there was a way of creating a compliance platform to help companies seeking to get their drugs approved by the FDA. One example of this work is with a Black, women-led company. We want to be the place that helps these businesses create value, jobs, and wealth creation in their underserved communities. This is not a new statistic it has been going on for 30 years and continues.Īt Founders First, we leverage revenue-based financing to fund diverse founder-led and small businesses so they have a pathway to mid-market. Less than 1% of capital goes to founders of color, and less than 5% goes to women. Kim: My focus has been to use my lived experience of running six companies to solve the need for more capital investment in diverse, women-led companies. Kim, can you share some of the gaps you've tried to fill and why? These are the kinds of gaps we want to fill. Something can be too small, big, risky, or even long-term to garner capital from various sources. In fact, small can be part of the impact story. We should think about this as something other than a one-size-fits-all space. I love those examples because you illustrate that the trajectory might differ. Only some communities, opportunities, and innovations are investment-ready on the terms mainstream investors find acceptable. Debra: Capital gaps exist because markets have gaps.
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