Providing friends and family capital for Black and Brown business owners 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 at risk during Covid, nationally 41%
closing, compared to 17% for white businesses.)
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 are coming back, taking on
debt is irresponsible. Many black/brown businesses can’t get loans or
would not be able to pay 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, paid off with
revenue share, starting at month 24, with a 150% return of capital
from each 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 gap between black and white families shrinks from 12
times to 3 times for African Americans who own a business, creating
intergenerational wealth in a time when white people have realized
the reality of systemic racism and some want to put 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 are actually donors,
receiving three things 1. an immediate tax deduction 2. capital gains
forgiveness and 3. a lifetime stream of income from investing in the
survival of their local small businesses

4. Case Study: Bread &Butter coffee and co working
• Bread& Butter, led by
two black men with
business experience
has$100k in revenue,
comparables value it
at $150,000, receives
$30,000 in equity
from CEF for 20%
ownership of the
business
Year one
• After 24 months,
B&B’s revenue has
grown to $200,000.
CEF receives $14k, or
7% of revenue, 10%
set aside as
management fee CEF
ownership reduced
proportionately.
• B&B’s revenue grows
to $300,000,the fund
gets $21,000,
recouping its $30k,&
invests in a new
business. CEF
management fee of
$3k, donors get their
first check, $2,000.
• B&B’s revenue has
grown to $350k the
donors get $7k for a
40% return on their
donation. The fund
no longer owns any
part of B&B.
Year two Year three Year four
How it would work for Grinders abusiness in Asheville’s River Arts
District

5. Case Study: replication across the fund
• The fund gets 110%
of the return from
the revenue share
dividends from each
equity investment.
100% of that return is
invested again, 10%
retained for
operations
What the fund gets
• Donors get the 40%
of the revenue share
dividends from each
equity investment for
life, or $12,000 on
each $30,000
investment, for a
14% annual return,
minus business
failures
• The goal is to provide
equity capital to help
Black & brown
businesses without
access to capital
become viable. The
fund is securing a
$150,000 loan
guarantee, to cover
failures of 15%.
• We believe the
Community Equity
Fund fills a gap in the
local economy and
we will be helping
other communities
replicate it, providing
design & advisory
services
What the fund gets
Guarantee for the
fund Replication

6. After friends and family funding
• 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 six 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.
• Now more established, B&B and the other businesses in the fund
portfolio are perhaps able to access expansion capital from Mountain
BizWorks, Self Help, or even a traditional bank
• The Community Equity Fund acts like a virtual rich uncle, providing friends & family
capital to entrepreneurs who can’t access traditional sources of capital. It 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 entrepreneur who don’t have a rich uncle.