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

1. Community Equity Fund

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.)
I n t h e a b s e n c e o f t h e o p p o r t u n i t y f o r
f i n an c i a l s u p p o r t f r om “ f a mi l y a n d f r i e n d s ”
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 . T h e r e f o r e B l a c k a n d B r o w n
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
T h e C o m m u n i t y E q u i t y F u n d -
Philanthropic “friends andfamily”,donor-investors inject equity, not debt, paidoff through
revenue shared, starting at month 25, the Fund will recapture 100% ofthe donated capital
plus 50% over a 60 month period. At this point you havethe opportunity tocontinue with
yourlegacy orreceive a reward.
R a c i a l W e a l t h G a p C l o s e s
The wealth gapbetween non European families andEuropean American families shrinks
from 12 times to3 times for African Americans whoown abusiness and creating
intergenerational wealth in a time when European American people have realized the reality
of systemic racism
D o n o r - I n v e s t or
Using the pooled income model, donors areactually investors, whohave the option to
receive: a.) an immediate taxdeduction b.) capital gains forgiveness or c.) a lifetime stream
ofincome from investing in the survivalof local small businesses.

4. Case Study
Bread &Butter - Coffee and Co-working Space
Bread& Butter, led by two African American males with business experience the
business has $100k in annual revenues
Comparables value the business @ $150,000
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.
Inaugural Injection

5. Life Span – Flow of Injection
After the grace period, 24 mos. Bread & Butter’s (B& B) revenuesgrows toa minimum of
$200,000
Starting in month 25, B & Bbegins repayment to the fund, dividendshares,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

6. $30, 000 – to Community Equity Fund – 100%
$3,000 - Management Fee – 10%
$12, 000 - Donor-Investors Income Pool – 40%
$45,000 = 150%
Allocation of Dividend

7. Replication Across the Fund
The fund continues to get 100% of the return
from the revenue dividends shares from each
equity injection. 100% of thatreturn is
invested again
What the fund gets

8. Replication Acrossthe Fund contd.
40% of the revenue share dividends flow to the pool which
pays lifetime income to donors
Yourdonationcontinuestocyclethrough yourcommunity

9. The goal is to provide equity capitalto help Black& Brown
businesses who often lackaccess to capitalbecome viable.
The fund will secure a $150,000 loan guarantee, to cover
potential failures rates of 15%.

10. After friends and family funding
• B & B and other Black and Brown owned businesses are on their feet, havingused the 24
months of runwayoffered by equity before they had to start payingseven percent of annual
revenueto theirdonors. Theyhavepaid off people who took a chanceon them giving them
equity, with nocollateral attached.
• More established, B & B and theother businesses in thefund 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.