Friends and family equity funding for Black & brown entrepreneurs who don't have a rich uncle.

1. Community equity fund
F r i e n d s & F a m i l y f u n d i n g f o r e n t r e p r e n e u r s w i t h o u t a r i c h u n c l e

2. Problem: minority biz funding gap
G L O B A L P A N D E M I C
50% of black &brown businesses atrisk during Covid,nationally.)
N o r i c h u n c l e
O n a v e r a g e A f r i c a n A m e r i c a n f a m i l i e s h a v e
$ 1 1 k i n n e t w o r t h , w h i l e w h i t e f a m i l i e s
h a v e $ 1 4 1 , 9 0 0 . S o b l a c k e n t r e p r e n e u r s c a n t
a s k a r i c h r e l a t i v e f o r t h e $ 1 5 , 0 0 0 t o
$ 3 0 , 0 0 0 n e e d e d t o g e t t h e i r b u s i n e s s t o p o s t
C o v i d v i a b i l i t y .
N o t a t i m e f o r d e b t
If you don’t know when your customers arecoming back, taking on debt is irresponsible.
Manyblack/brown businesses can’t get loans orwouldnot be abletopay it back

3. The Solution
P h i l a n t h r o p i c f r i e n d s a n d f a m i l y f u n d i n g
The Community Equity fund invests equity, not debt, paidoff with revenue share, starting at
month 24, with a 150% return of capital fromeach business over 4-5 years.
R a c i a l w e a l t h g a p c l o s e s
The wealth gapbetween black andwhite families shrinks from 12 times to 3 times for
African Americans whoown a business, creating intergenerational wealth in atime when
white people have realized the reality of systemic racism andsome want toput their money
where their mouth is.
I n v e s t o r s a r e d o n o r s
Using the pooled income model, investors areactually donors,receiving three things 1. an
immediate tax deduction 2.capital gains forgiveness and3. a lifetime stream ofincome from
investing in the survival of their local small businesses

4. Case Study: Bread &Butter coffee and co working
• Bread& Butter, led bytwo
black men with business
experience has$100k in
revenue, comparables value
it at $150,000, receives
$30,000 in equity fromCEF
for20% ownership ofthe
business
Yearone
• After 24 months, B&B’s
revenue has grownto
$200,000. CEF’s receive
$14k, prm7% of revenue,
10% set aside as
management feeCEF
ownership reduced
proportionately.
• B&B’srevenue grows to
$300,000,the funddonors
gets $16,000, recouping its
investment,& uses it to
invest in anew business. The
fund’s donors get their first
check $5,000.
• B&B’srevenue has grown to
$350,000 but the funds’
donors get $10,000, or 50%
oftheir originalinvestment
notthe $27,000 that would
be seven percent ofrevenue.
The fund no longer owns any
partofB&B.
Yeartwo Yearthree Yearfour
HowitwouldworkforGrindersabusinessinAsheville’sRiverArtsDistrict

5. Case Study: replication across the fund
• The fund continues to get
100% of the return fromthe
revenue share dividends
from each equity investment.
90% of that return is
invested again,10% retained
foroperations
What the fundgets
• Donors continue toget the
50% of the revenue share
dividends fromeach equity
investment for life, or
$15,000 on each $30,000
investment, fora 14%
annual return, minus
business failures
• The goal is toprovide equity
capital tohelp Black &
brown businesses without
access tocapital become
viable. The fund will secure a
$150,000 loan guarantee, to
cover failures of15%.
• We believe the Community
Equity Fund fills a gapin the
local economy andwe will
be helping other
communities replicate it,
perhaps providing consulting
&advisory services
What the fundgets Guaranteefor the fund Replication

6. After friends and family funding
• Grinders and other blackand brown owned businesses are ontheir feet, havingused the 24
months of runwayoffered by equity before they had to start payingsix percent of annual
revenueto theirdonors. Theyhavepaid off people who took a chanceon them giving them
equity, with nocollateral attached.
• More established, Grinders and theother businesses inthe fund portfolio are perhaps able to
access expansion capital from MountainBiz Works,Self Help, or even a traditional bank
• TheCommunityEquity Fund acts likea virtual rich uncleproviding friends andfamily capital to entrepreneurswho
can’t access traditional sources of capital. It is a keymissing link inthe path creating intergenerational wealth for black
and brown families. We plan to makethis model replicable to other cities and towns to solve the friends and family
gap for entrepreneurwho don’t havea richuncle.