Greetings Agents of Impact!
- Three takes on revenue-based financing
- Community ownership for community power in California
- Smallholder farmer credit in Uganda
- TerraBlaster’s laser focus on soil health
Featured: Beyond Venture Capital
Revenue-based financing creates wealth with anti-dilution protection for founders, not investors.Founders Bill Spruilland Charles Gaddy were careful not to give up too much of their company, Global Data Consortium, to the venture capitalists eager for a piece of the digital identity verification company. When they needed growth capital in 2018, they worked with RevUp Capitalto structure a revenue-based financing package that repaid the capital, up to a cap, with a small percentage of future recurring revenue, rather than selling equity. They shared equity instead with employees. When London Stock Exchange Groupbought the Raleigh, NC-based business four years ago for $300 million, in cash, that early non-dilutive bet meant the company’s founders kept most of the value they’d built. More than two dozen employees became millionaires at the time of the transaction through an equity participation plan. “In our model, our companies tend to be more capital efficient,” says RevUp’s Melissa Withers. “When they do raise equity dollars, they do it in more modulated ways.” Founders in RevUp’s portfolio “have actually walked away with liquid wealth” when they get to exit, she adds.
- Founder-friendly. Selling equity can be expensive, especially with the terms many investors impose. Board seats. Liquidation preferences that ensure investors get paid first. Anti-dilution clauses that punish founders if a later financing round comes at a lower valuation. Revenue-based financing functions more like a loan. A founder repays the financing as a set percentage of monthly or quarterly revenue until a multiple of the original amount – in RevUp’s case, 2.5x – is paid off. RevUp has deployed roughly $25 million in 70 companies since 2016, including $21 million through revenue-based financing. With her partner, Allan Tear, Withers was attracted to revenue-based financing as a founder-friendly alternative for gritty, overlooked entrepreneurs building revenue-driven businesses that could grow to become $30 million companies and create quality jobs and wealth-, but were never going to be the next venture unicorn. “I just think we got a little obsessed with this coastal unicorn thing, even in impact,” Withers says. “People built venture funds, and now they’re having the same problem venture’s having, which is they can’t produce any liquidity for anybody. And when they do, the founders get screwed. That’s that system.”
- Closing racial wealth gaps.Revenue-based financing can be a practical tool for wealth holders looking to address the racial wealth gap, says Carrie Endries of Boston-based Reynders McVeigh in a guest post on ImpactAlpha (see, “How a financial advisor in Boston helps her clients drive local impact”). “For many of our clients, a top priority is putting capital into investments that will build wealth creation via business ownership, including cooperative employee ownership, within the communities that founded these businesses,” she writes. Revenue-based finance “allows ownership to stay in the hands of those entrepreneurs, and in the case of cooperatives, all employees,” she says. “It doesn’t force the founder-owners to sell a business, like equity might, as an outcome they weren’t ready for or into a buyer’s arms they didn’t wish for.” Opportunity Finance Network reports that more than 20 community development financial institutions are experimenting with revenue-based financing. In addition to RevUp in Rhode Island and Founders First Capital Partners in California, Flex Capital Fund in Vermont, Coastal Enterprises, Inc. in Maine, and Boston Impact Initiative in Massachusetts have adopted the approach. In June, AltCap in Kansas City, Mo., launched a revenue-based financing product for entrepreneurs in the lower Midwest. Read Endries’ full post.
- Measuring wealth creation.Impact investors have become increasingly sophisticated about measuring dollars deployed. “But deployment is an input,” writes Kim Folsomof Founders First Capital Partners, which provides revenue-based funding and business support to service-based small businesses. “The more important question is what that capital ultimately makes possible.” An analysis of the businesses in Founders First’s lending portfolio found potential for more than $44.5 million in projected wealth creation for entrepreneurs, employees and communities. Nearly 60% of new jobs created by businesses in the portfolio pay premium wages. Among companies that receive growth financing alongside executive advisory support, Founders First has seen average annual revenue growth of 94%. “The objective is not simply to deploy more capital,” says Folsom. “It is to use capital as a tool that enables entrepreneurs to build capacity, retain ownership, create enterprise value, and translate business growth into broader wealth creation.” Read Folsom’s full post.
- Keep reading, “Revenue-based financing helps create wealth with anti-dilution protection for founders, not investors,” by Roodgally Senatus.
Dealflow: Ownership Economy
Cal Wellness, First Citizens Bank commit $3 million to community ownership fund in California. Common Counsel Foundation has worked for two years with community leaders in California to co-design a fund for community land trusts, housing cooperatives and other local ownership strategies. Its Integrated Capital Fund has secured $3 million in low-interest, long-term loans from First Citizens Bank and the California Wellness Foundation. The investors’ contributions to the debt fund bring Common Counsel’s total raised for the fund to $6.8 million toward its $25 million goal. The fund will support community groups in refinancing existing debt and acquiring, developing and stewarding assets for local ownership and governance. Neighborhoods in Oakland, Sacramento and other cities are “feeling the speculative land grabs, the financial pressures, and this fund provides communities with additional tools to buy land,” Cal Wellness’ Juan Reynoso told ImpactAlpha. Keep reading.
🧑🌾 Financing farmers.Kampala-based Pearl Capital Partners’secured €2 million ($2.3 million) from the Netherlands’ embassy in Uganda for its Smallholder Credit Fund. The fund provides credit and working capital to savings and credit cooperative organizations, microfinance institutions, agribusinesses and agriculture-focused fintech ventures lending to farmers throughout Uganda. The Dutch government helped Pearl Capital launch the fund in 2022 with a €6 million investment. (ImpactAlpha)
🫛 Agriculture tech.California-based TerraBlaster raised $12.5 million for its laser-based method of assessing soil health. The company’s laser-induced breakdown spectroscopy, or LIBS, is put into sensors that can be dragged through soil on heavy-duty farming equipment like tractors to measure soil nutrients. The company was backed by Builders Vision, Khosla Ventures, Trailhead Capitaland others.(AFN)
♻️ Circular economy. T. Rowe Price led a $75 million equity round for Cyclic Materials, which is building a facility in South Carolina for rare earth mineral recycling. The company has developed a process for recovering the minerals from magnets used in robotics, drones, car parts, medical devices and other products. Cyclic then separates the rare earth components and converts them to rare earth metals that can be remade into magnets or alloys. Cyclic already operates a facility in Arizona and is building plants close to recovery and reuse sites. (Cyclic Materials)
Agents of Impact: Follow the Talent
Don’t miss these ImpactAlpha partner events, and check out dozens of other in-person gatherings on ImpactAlpha’sevents page.
- Sept. 8-11:Impact Minds 2026, Manaus, Brazil. Subscribers can use code IMPACTALPHA_10 for 10% off.
- Sept. 8-12, Tsao Pao Chee Group’s At One Impact Week, Singapore.
- Sept. 10:Woman 2026, Lagos.
- Sept. 16-18:Asia Impact Nights, Kobe, Japan.
- Sept. 17: Frame 2026, London Subscribers can use code IMP4CT4LPH420 for 20% off.
Sept. 18-19: Student Impact Investing Bootcamp, virtual and in person in New York. - Oct. 12-14:SOCAP, Chicago. Subscribers can use code ImpactAlpha26 for $100 off.
- Oct. 14:Rock Health Summit, San Francisco. Subscribers can use code IMPACTALPHA_26 for 10% off.
- Oct. 27-29:GIIN Impact Forum, Amsterdam. Subscribers can use code GIIN26IMAL for 10% off.
Juan Fernando Larrea, formerly with Enabling Qapital, joins ThirdWay Partners as associate director… CapShift tapsRiley Shea, previously with Brown Brothers Harriman, as an investment operations associate… Cherryrock Capital hiresRichard Odio as principal… The Chicago TREND Corp. welcomesBen Schulman as vice president of advisory services and strategic initiatives… Bryan Kamau, previously with Quona Capital, joins I&P as a senior investment officer.
IIX promotesSon Nguyen to senior vice president… Piva Capital makes several new hires: Sushil Purohit, former president of Wartsila Energy, joins as a venture partner; Julie Barger, a recent Wharton School MBA, and Genevieve Hummer, previously with Trellis Climate, join as investors. Also at the firm, Lee Larson is promoted to principal… Enterprise Community Partnersis looking for a senior asset manager… Charter School Growth Fundseeks a vice president of structured finance.
World Wildlife Fundhas an opening for a director of nature finance and investments… New York City Economic Development Corp.is on the hunt for an incentives senior associate… Energy Impact Partnersis hiring an associate for energy demand research and innovation… Mission Driven Financeis recruiting a senior director of fund management and client services… Rabobankis looking for an executive director and senior project finance specialist… The Milken Institute seeks a director and a senior associate for its pathways to capital team.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
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