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EMSDC Community Equity Fund

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Nontraditional business capital

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EMSDC Community Equity Fund

  1. 1. Partners for Equity in Economic Mobility and Community Development Community Equity Fund
  2. 2. Develop people, property, and business and envision equitable, inclusive economy for all. Our mission Founded in 1994 under the leadership of Dr. John H. Grant and the auspice of Mt. Zion Missionary Baptist Church.
  3. 3. Improving the lives of Black and Brown communities by means of: ⚬ Opportunity ⚬ Empowerment ⚬ Awareness ⚬ Education Our focus
  4. 4. Our programs EMPL, LLC. Residential and commercial leasing Incubate to Innovate Commercial leasing at discounted rates Individual Development Account (IDA) Community Equity Fund - nontraditional capitalization for small businesses Community Benefit Partner Fiscal sponsorship
  5. 5. Challenges of Covid-19 ● 50% of Black and Brown-owned businesses are at risk of closing ● Many do not have access to loans ● Taking a loan right now may be too risky
  6. 6. The wealth gap Black families have less than 15% of the wealth of white families In 2019 the median white household held $188,200 in wealth—7.8 times that of the typical Black household ($24,100; figure 1). It is worth noting that levels of average wealth, which are more heavily skewed by households with the greatest amounts of wealth, are higher: While median wealth is more reflective of the typical household, the scale of average wealth is indicative of the outsized levels of wealth held by the richest households. The Black-white wealth gap today is a continuation of decades-long trends in wealth inequality, Black Hispanic White $1,000,000 $750,000 $500,000 $250,000 $0 https://www.brookings.edu/blog/up-front/2020/12/08/the-black- white-wealth-gap-left-black-households-more-vulnerable/
  7. 7. Where to start
  8. 8. Equity capital injections for Black- and Brown-owned businesses. Funded through philanthropic contributions from Foundations, individuals and from repayment* from the businesses. *Business’ repayment is through a % of revenue sharing (7% maximum) Community Equity Fund
  9. 9. We invite you to invest into your community, You become a Community Champion, a partner with CEF. You will have the opportunity to share in creating legacy Black and Brown businesses and helping them on the path to building intergenerational wealth. Community champions
  10. 10. The businesses Local Black and Brown business owners who have operated for 3-5 years and whose businesses have annual revenues of $50,000 or greater. They may or not have the capacity to attract or take on debt.
  11. 11. Bread & Butter is a coffee and co-working space led by two African American males with strong business experience and producing gross in annual revenues of $100k. Case study: Bread & Butter
  12. 12. Location of the business and nearby market assessments assess the comparable value for the business at $150,000. Community Equity Fund, provides an injection of $30,000- $50,000 in equity capital into the business for 20% revenue ownership stake in the business for the life of the transaction, approximately 24-60 mos. Capital injection
  13. 13. Life span of the capital injection The Community Equity Fund gives businesses a 2 year runway Beginning in month 25, B & B begins repayment to the fund, 7% of annual gross revenues, payable or quarterly or annually, typically repayment period is 3-5 years. After a 24 mos. grace period, Bread & Butter’s (B & B) revenues grows to a minimum of $200,000. At full repayment the Fund receives 150% return on capital invested.
  14. 14. Allocation of the dividends With an initial $30,000 investment $44,000 returns to the fund $44,000 $30, 000 – Community Equity Fund – 100% $9,000 - Management Fee – 30% $5,000 – Reserve Account – 16% Percentages listed above are expressed as % of Community Equity Fund Injection
  15. 15. Replication The fund continues to receive 100% of the return from the revenue dividends shares from each equity injection. 100% of that business share is invested again in CEF 30% is applied as a management fee Loss Reserve For each donor contribution into the CEF the Fund will set aside 15% for Loss Reserve 16% is held in reserves
  16. 16. The Community Equity Fund acts like a virtual rich relative, providing friends and family support to entrepreneurs who lack access to traditional sources of capital. Friends and Family as an “asset class”, is a key, missing link in the path to creating intergenerational wealth for Black and Brown families. We plan to make this model replicable to other cities and towns to solve the friends and family gap for entrepreneurs. Friends and family funding
  17. 17. Relevant business advisory support from professional providers with financial management, asset building and wealth creation expertise will help ensure: B & B and other Black and Brown owned businesses become, remain solvent, having used the 24 months of runway offered by an equity injection, repayment of seven percent of annual revenue to the fund, helps them build credit worthiness. Ongoing support
  18. 18. We'd love to talk to you about the details of the EMSDC Community Equity Fund. Contact us Stephanie Swepson-Twitty (828) 281-1227 info@eaglemarketsts.org eaglemarketsts.org
  19. 19. Meet the team STEERING COMMITTEE Eagle Market Streets: Fund Manager Edward Jones: Fund Repository Kevin Doyle Jones: Fundraiser and Strategist Michael Smith: Fundraiser and Strategist Franzi Charen: Marketing and Promotion Mt. BizWorks: Underwriting Team Leader Just Economics: Community Engagement BUSINESS ADVISORY PARTNERS Edward Jones Mountain BizWorks Carolina Small Business Development Fund
  • BarbaraJaneBJHardenJ

    Jun. 3, 2021
  • McGodsonSonnyBenonai

    Apr. 21, 2021
  • MichaelGrossman17

    Apr. 8, 2021
  • kevindoylejones

    Apr. 7, 2021

Nontraditional business capital

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