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Community equity fund deck

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Friends and family funding for entrepreneurs who don't have a rich uncle.

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Community equity fund deck

  1. 1. Community Equity Fund Partners for Equity in Economic Mobility and Community Development EAGLE MARKET STREET DEVELOPMENT CORPORATION EAGLEMARKETSTREETDEVELOPMENTCORPORATION
  2. 2. EMSDC INTRODUCTION Our Mission & Focus: Mission • …Develop people, property, and business and envision equitable, inclusive economy for all Focus • Improving the lives of Black and Brown communities by means of: ⚬ Opportunity ⚬ Empowerment ⚬ Awareness ⚬ Education Founded in 1994 under the leadership of Dr. John H. Grant and the auspice of Mt. Zion Missionary Baptist Church.
  3. 3. Programs: EMPL, LLC ⸙ Residential and Commercial Leasing Incubate to Innovate ⸙ Commercial Leasing @ Below Market Rate Individual Development Account (IDA) Community Equity Fund ⸙ Nontraditional Capitalization for Small Business Community Benefit Partner ⸙ Fiscal Sponsorship
  4. 4. The Challenge a Nontraditional Financing Model for Black and Brown Businesses Global Pandemic • 50% of Black and Brown Business are at risk nationally during COVID-19 • If you don’t know when your customers are coming back, taking on debt is irresponsible • Many Black and Brown businesses still do not have access to loans Not A Time for Debt
  5. 5. The Challenge – cont’d …the Wealth Gap In the 2019 survey, European American families have the highest level of both median and mean family wealth: $188,200 and $983,400, respectively Black and Hispanic families have considerably less wealth than European American families. Black families' median and mean wealth is less than 15 percent that of European American families, at $24,100 and $142,500, respectively. Hispanic families' median and mean wealth is $36,100 and $165,500, respectively. Other families—the median, reflecting the concentration of wealth at the top of the wealth distribution for each group. (https://www.federalreserve.gov/)
  6. 6. Community Equity Fund Community Champions The Business WHERE TO START THE FUND, performs as a pooled income fund, an instrument which allows it to achieve its mission as an “evergreen” or self- sustaining fund, while giving you an applicable tax deduction and lifetime income from annual dividends from the invested businesses, unless you opt to have that annual income return to the Fund. Upon your death, the remainder of your gift is donated to the Fund. This link will take you to some detail about how pooled income funds often operate in university development programs, click here. WE INVITE YOU TO INVEST INTO YOUR COMMUNITY, You become a Community Champion, a partner in CEF. You have the opportunity to be a donor-investor in the mission of community healing. Your tax- deductible charitable contribution will create a legacy for Black and Brown business owners.
  7. 7. Case Study: Bread & Butter - Coffee and Co- Working Space Bread & Butter, led by two African American males with business experience and grosses $100k in annual revenues The Business Comparables value the business @ $150,000 Value Community Equity Fund, provides an injection of $30,000 in equity capital for 20% ownership stake in the business for the life of the transaction, approximately 84 mos. Capital Injection
  8. 8. Life Span - Flow of Injection After the grace period, 24 mos. Bread & Butter’s (B & B) revenues grows to a minimum of $200,000. Starting in month 25, B & B begins repayment to the fund, dividend shares, 7% of annual gross revenue, payable monthly or quarterly typically a period of 3/5 years. At full repayment the Fund receives 150% return on capital invested. EAGLE MARKET STREET DEVELOPMENT CORPORATION
  9. 9. $45,000 = 150% Allocation of Dividends EAGLE MARKET STREET DEVELOPMENT CORPORATION $30, 000 – t o Com m u n it y Equ it y Fu n d – 100% $9,000 - Management Fee – 20% $6, 000 - Donor-Investors Income Pool – 30%
  10. 10. REPLICATION ACROSS THE FUND The fund continues to get 100% of the return from the revenue dividends shares from each equity injection. 100% of that return is invested again 40% of the revenue share dividends flow to the pool which pays lifetime income to donors The goal is to provide equity capital to help Black & Brown businesses who often lack access to capital become viable. The fund will secure a $150,000 loan guarantee, to cover potential failures rates of 15%. EAGLE MARKET STREET DEVELOPMENT CORPORATION 01 02 03 "You r don a t ion con t in u es t o cycle t h rou gh you r com m u n it y."
  11. 11. B & B and other Black and Brown owned businesses are on their feet, having used the 24 months of runway offered by equity before they had to start paying seven percent of annual revenue to their donors. They have paid off people who took a chance on them, giving them equity, with no collateral attached. More established, B & B and the other businesses in the fund portfolio are perhaps able to access expansion capital from Mountain Biz Works, Self Help, or even a traditional bank. AFTER FRIENDS AND FAMILY FUNDING "The Community Equity Fund acts like a virtual rich uncle providing friends and family capital to entrepreneurs who can’t access traditional sources of capital. It is a key missing link in the path 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 entrepreneur who don’t have a rich uncle." EAGLE MARKET STREET DEVELOPMENT CORPORATION
  12. 12. Contact Us We'd love to talk about all things Community Equity Fund. Stephanie Swepson-Twitty Phone Number (828) 281-1227 Email Address info@eaglemarketsts.org Website https://eaglemarketsts.org/

Friends and family funding for entrepreneurs who don't have a rich uncle.

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