Q&A with the ImpactAssets Investment Team:
Kapor Capital Fund III, Grameen America, Enterprise Community Loan Fund and Hope Enterprise Corporation
The ImpactAssets Investment Team has recently approved four new private debt & equity impact funds addressing racial and gender equity as investment options for The ImpactAssets Donor Advised Fund. They are available at a $10,000 minimum to ImpactAssets clients.
Please briefly introduce each fund. Who is each of these funds for?
- Kapor Capital Fund III is a Black-led venture capital fund that focuses on early-stage, tech-driven companies across healthtech, edtech, and fintech that are committed to closing gaps of access, opportunity or outcome for low-income communities and communities of color. The fund intentionally seeks to fund entrepreneurs traditionally underrepresented within venture capital, such as people of color and women. The investment is a fit for investors looking for a U.S.-based, high-risk, high-return opportunity that supports impact themes of racial and gender equity, healthcare, education and financial inclusion.
KAPOR CAPITAL FUND III FINAL CLOSE: SEPTEMBER 30, 2021 - Grameen America (GAI) helps low-income women boost their income, build assets, access the mainstream financial system, and create jobs in their communities through their group lending microloan model. The investment is a compelling fit for investors looking for a low-risk, U.S.-based opportunity to generate fixed returns while supporting impact themes of poverty alleviation, gender equity, and decent work and economic growth.
- Enterprise Community Loan Fund (ECLF) is a Community Development Financial Institution (CDFI) loan fund that offers investors the opportunity to support the creation of affordable housing and community revitalization in communities of color across the United States. ECLF's loan portfolio also supports the construction of healthcare and educational facilities in underserved communities. The investment is a fit for investors looking for a low-risk, U.S.-based opportunity to generate near-market returns while supporting impact themes of poverty alleviation, racial equity, and sustainable cities and communities.
- HOPE Enterprise Corporation is a Black-led Community Development Financial Institution (CDFI) that provides people in low-income areas of the Deep South with access to small business loans and non-predatory financial services. HOPE's clients are 75% people of color and 60% women, and approximately half were unbanked or underbanked prior to their relationship with HOPE. The investment is a fit for investors looking for a low-risk, U.S.-based opportunity to generate near-market returns while supporting impact themes of poverty alleviation, racial equity and financial inclusion.
What will investors who are interested in closing the gender gap find interesting about Grameen’s thesis and history?
Grameen America's (GAI) primary impact goal is to help close the gap in economic opportunity for low-income entrepreneurial women in the United States, where over 15.5MM women live in poverty and receive less than 5% of small business funding from mainstream financial institutions. Access to capital is particularly challenging for low-income women, who may not meet the formulaic underwriting requirements of traditional lenders. GAI builds on 35 years of experience honing lending models that are specifically tailored towards low-income women. GAI does not rely on traditional methods that require collateral or certain credit scores, which create barriers to equitable access. Instead, their process focuses on building 'social capital' through group lending models and the provision of business education and training to improve the outlook for their borrowers' businesses and reduce the risk of principal loss. This approach democratizes access to capital without compromising quality. GAI has maintained a 99%+ collection rate on $2B in disbursed loans.
What will investors who are interested in venture capital find interesting about Kapor's investment strategy?
Investors will be impressed by Kapor Capital's exemplary track record over the past ten years and unique impact thesis. Since 2011, Kapor Capital has invested more than $100MM across 178 impact investments and has generated top quartile financial returns: Kapor's TVPI of 3x outperforms the 75th percentile for both Pitchbook (2.39x) and Cambridge Associates (1.86x). Kapor seeks to replicate its previous success by extending its peer-beating investment strategy to Fund III at a greater scale. The fund will invest in a portfolio of approximately 50 companies across healthtech, edtech and fintech, with initial investments ranging from $450K for Pre-Seed companies to $1.95MM for Series A companies. The fund will reserve 65% of invested capital for follow-on investments, allowing Kapor to double down on the best performers in the portfolio. From an impact perspective, Kapor sets itself apart from other VC funds through their focus on founders from underrepresented backgrounds. This stems from their belief that underrepresented founders have valuable lived experience that provides a unique perspective and enables them to identify rapidly-scalable, market-based solutions that may have been overlooked by others.
LEGAL AND PROGRAM DISCLAIMER: This is not a solicitation to buy or sell securities, nor a private placement offering pursuant to any private placement memorandum that must be issued to qualified investors. It is an informational description of charitably oriented, social purpose investment options that have been approved by ImpactAssets only for use in its donor advised fund asset base. It is only for use by its donors. Any allocation to private debt and equity investment options may result in losses and illiquidity that will be borne solely by each donor advised fund account with investment in these options, as will associated program fees. The minimum allocation per donor advised fund account per option is $10,000. Grant making from the principal value will not be possible until distributions are returned to The ImpactAssets Donor Advised Fund. There is no guarantee of any recovery of capital. No assurance can be given that investment objectives or targets/projected returns will be achieved. Actual target may vary and should not be considered or relied on as a performance guarantee. The Fund Manager has not approved the information contained in this Fund profile, including the assignment of risk ratings contained herein. The Units may be offered solely to, and subscriptions will be accepted only from “Accredited Investors,” as defined in Rule 501(a) of Regulation D promulgated under the authority of the Act, who are also “Qualified Clients,” as defined in Rule 205-3 of the United States Investment Advisers Act of 1940, as amended.