Community Equity Capital: The Opportunities and Challenges of Growth
This report is intended for an audience of socially-motivated LPs. It describes the challenges of community equity capital investing and makes recommendations to advance the field.
general findings are grounded in a comparison of ten similar funds. InSight leveraged this analysis to create a typology of ‘constraints’ on the traditional private equity investment process common to the CDVC sector.
While it is difficult to draw definitive conclusions from a sample of ten research subjects, we note that just seventeen CDVC funds have been launched since 2001.1 Data from eight of these seventeen funds are included in this analysis.
Research undertaken by InSight included surveying academic literature, conducting structured interviews with general partners (gPs) at nine of the ten analogous funds, and collecting additional fund and industry data.
The report makes findings and recommendations primarily at an industry level, focusing on the strategic growth of the sector. Important research on the specific financial innovations necessary for supporting CDVC funds, for example a secondary market to facilitate portfolio company exits, was not included as a part of this work.