IMPACTASSETS 50™

An Annual Showcase of Impact Investment Fund Managers

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An Annual Showcase of Impact Investment Fund Managers

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ImpactAssets 50: A Global Landscape of Impact Investment Fund Managers
The ImpactAssets 50 (IA 50) is the first open-source, publicly published database of experienced private debt and equity impact investment fund managers.
https://www.impactassets.org/impactassets-50

ImpactAssets 50

An Annual Showcase of Impact Investment Fund Managers

IA 50 2022 PROFILE

Mission Driven Finance, LLC

Total Assets Under Management: $25 – 49M
Asset Class: Private Debt - Absolute Return / Notes, Real Estate, Private Equity
Primary UN Sustainable Development Goal: 10 – Reduced Inequalities
Affordable Housing & Community Development
Education
Small/Medium Business Development

Firm Overview

Category: Private Debt - SME Finance (US)

Mission Driven Finance is an impact investment firm dedicated to building a financial system that ensures good businesses have sufficient affordable access to capital. Built from the ground up with a single purpose—to make it easy to invest in your community—all of our funds and structured products are designed to close financial gaps that will close opportunity gaps. We work with local and national investors to help them create the impact they want, and work with businesses and community partners to help them get the capital they need. Mission Driven Finance was launched in 2016 in San Diego, CA and is a Certified B Corporation. Co-founded and co-owned by a woman of color, our team at Mission Driven Finance is intentionally diverse: 62% women, 57% Black, Indigenous or people of color, and 48% first- or second-generation New Americans. We are entirely focused on private market impact transactions and asset management.

Firm Headquarters: US & Canada
Years of Operation: 5 – 9 years
Total Assets Under Management:
$25 – 49M
Total Number of Investors: More than 25
% of Capital from Top 3 Investors: 25% – 49%
Investment Thesis:

Our mission is to mobilize massive amounts of capital that will increase equitable and inclusive access to education, health, and wealth - because we all do better when we all do better.

Investment Overview:

Too many good businesses and community initiatives are either ignored or preyed upon by the current financial system. Unfortunately, these are often the organizations that are delivering critical services, creating paths to quality jobs, and leading inclusive economic development. This is especially acute for those that: - Lack the hard collateral or are earlier stage without the profitable history required by traditional lenders - Don’t have the quick scale-and-sell model demanded by VC - Are located in or led by people from overlooked and underestimated communities (BIPOC, New American, Women and Girls, LGBT, Veterans) We invest in small businesses, social enterprises, and nonprofits without the use of credit scores and personal guarantees. By using finance as a tool for change, we can give them a fighting chance. Our target impact areas live at the intersection of: - Inclusive place based strategies - Immigrants, refugees, and New Americans - Shared ownership - Early care and education - Environmental justice

Company Differentiator:

- Our entire focus is on accelerating economic opportunity in communities that have been left out of the current system, and rather than chasing unicorns we look for places where risk has been mispriced and there are significant capital gaps. - We prioritize community-driven efforts and provide the infrastructure to cost-effectively run smaller and bespoke community funds to create capital opportunities that otherwise wouldn’t exist. - We are able to underwrite in ways that other investors can’t, including avoiding things like credit scores, background checks, and hard collateral requirements, along with embedding technical assistance and being able to tackle smaller and more nuanced projects. - As much as possible, we avoid wealth-extractive models and strive to support local partners in a bottom-up strategy. - We embrace strength in diversity and understand that the history of exclusion and bias is part of what has prevented capital from flowing.

Investment Example

Co-founded in 2015 by Tri Le, MyPhuong Le, and Leah Villegas, Microtek specializes in developing microelectronic technologies that integrate engineering with chemistry and biology. This innovative company manages early research and development, prototyping, manufacturing, and product development. Their mission is to accelerate the integration of engineering and life sciences to improve human health. When we first met Microtek through a referral from the Asian Business Association, they were just hitting $2M in revenue with small net profits, and weren’t able to secure any affordable financing which had led them to take on high interest debt. However, they were ready to hire at least 5 additional employees and had significant contracts in process. We made a first loan from our Advance Strategy of $217k, and three months later an additional $200k. A year later, their revenue is over $5M and approaching 50 employees.

Leadership and Team

Cumulative Leadership Experience in Investing:
30 years or more
Cumulative Impact Experience of Top Three Firm Leaders:
20 – 29 years
Lauren Grattan – Co-Founder & Chief Community Officer More Info

Lauren’s background in nonprofit development made her eager to activate more capital for social change, leading her to co-found Mission Driven Finance. As Chief Community Officer, she leads the design of community-driven strategy, providing a frame for both internal culture & partner relationships. Prior to building Mission Driven Finance, she spent nearly 10 years fundraising for a wide variety of nonprofits—from large universities to small, volunteer-run initiatives. Lauren proudly serves on the steering committee of the Inclusive Capital Collective and on the board of Business for Good San Diego.

David Lynn – Co-Founder & CEO More Info

David Lynn has been working in the financial and philanthropic sectors for over 20 years. He found a way to blend those two worlds in 2016 as the founding CEO of Mission Driven Finance, a private impact investment firm dedicated to building a financial system that ensures good businesses have access to sufficient, affordable capital. Prior to focusing on impact investing, David specialized in private investment management, including reporting and risk management.

Louie Nguyen, CFA – Chief Investment Officer More Info

Louie is a seasoned global investor, with a particular focus on disruptive endeavors and mobilizing capital and human resources to solve community pain points. Prior to joining Mission Driven Finance, Louie ran Soledad Investment Management, where he made global investments including impact-oriented investments in Vietnam. Before launching Soledad, Louie was a senior portfolio manager for the Needelman Asset Management International Value product.

Percentage of Investment Professionals who identify as women:
50% or more
Percentage of Investment Professionals who identify as a person of color:*
50% or more
Percentage of Senior Management Team who identify as women:
50% or more
Percentage of Senior Management Team who identify as a person of color:*
25% to less than 50%
*People of color include: Black, Latinx, Asian, Native American/Alaskan Native, Pacific Islander, Middle Easterm and multi-racial Americans

Financial Performance

Target Financial Returns Relative to Benchmark:
Near-market Rates
Actual Performance Relative to Target Financial Returns in the Past Three Years:
Over-delivered compared to initial target returns
Financial Reporting Frequency to Investors or Donors
Quarterly

Impact Performance

Percentage of Total Assets Under
Management that are Impact Investments:
100%
Primary Impact Outcomes:
Addressing climate change and environmental issues
Alleviating poverty
Creating jobs
Increasing access to education and improving educational outcomes
Increasing access to healthcare services and improving health
Addressing Racial Inequality
Addressing Gender Inequality
Other: Employee Ownership
Secondary Impact Outcomes:
Conserving land, ecosystems and natural resources
Increasing access to financial services
Value-added Services Offered:
Access to markets
Business and legal training
Financial literacy training
Racial bias training

Investments systematically target companies where social and/or environmental impact is integral to the product/service being created:

We actively seek out and develop quality impact investments that advance economic opportunity, particularly for populations that have historical barriers. Our target impact areas live at the intersection of: - Inclusive place-based strategies - Immigrants, refugees, and New Americans - Shared ownership - Early care and education - Environmental justice Enterprises that we invest in are committed to one or more of these areas:  - Directly providing services such as education, healthcare, and workforce development - Increasing the availability of affordable and attainable housing and commercial space - Creating paths to quality jobs, income mobility, and economic participation - Improving the environment and other social determinants of health Our Community Finance Fellowship program, started in 2020 with five fellows, is designed to simultaneously develop leadership in and deploy capital to overlooked and underestimated communities.

Investments systematically include social and environmental sustainability practices in the due diligence process:

Diversity is not an afterthought for us, but is core to our ability to both source deal flow and underwrite effectively. Our experienced team comes from a variety of backgrounds, often having worked in multiple communities and industries, and is able to partner sensitively with traditionally underserved communities. Internally, we encourage intense dialogue from differing perspectives to uncover opportunities and weaknesses in borrowers and in ourselves. When underwriting, we actively seek out and support companies that both represent and serve overlooked and underestimated communities, including in their ownership, core leadership team, employees, and customers. Additionally, we will help potential portfolio companies develop a stronger impact thesis and use capital as a motivator to shift practice.

Impact Tracking and Monitoring

Impact is Tracked:
Yes
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes – to the public
Third Party Validations:
Participant on steering committees or leadership roles within impact industry associations
Publisher or contributor to industry white paper or other research in impact investing

Learn More

Key Contact Name: David Lynn
Phone: 858-735-9115
Mailing Address:

2245 San Diego Ave #121, San Diego, CA 92110, USA

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