Colorado Impact Investing Helps Entrepreneurs Build Local Businesses, Healthy Communities

Starting a business is the dream of many Americans and many Coloradoans.

Colorado’s natural beauty and healthy lifestyle attracts many people from out-of-state and out-of-country. Nearly 2/3 of the state’s residents were born outside Colorado, while nearly 1 in 10 Coloradans is foreign-born. Many of those who have come to call Colorado home want to start businesses in the state and give back to the communities that have given so much to them.

From 2006 to 2010, more than 27,000 immigrants started businesses in Colorado that brought in $1.2 billion in net income, or 7.3% of all business income in the state. Statewide, around 10% of all state business owners are foreign-born. In the Denver-Aurora-Broomfield metro area, roughly 12% of business owners are foreign born.

It’s clear that immigrant entrepreneurs create jobs and generate income and tax revenue in Colorado. Would-be entrepreneurs, however, might be unclear about how to get a business off the ground, including the critical step of securing investor funding.

For them, the Colorado Impact Fund may be an excellent resource. Reflecting the increasing awareness that a successful business should generate profits but also be responsible, the Colorado Impact Fund supports local companies that keep their money in Colorado and make a positive community impact.

A private equity fund that’s an affiliate of Vestar Capital Partners and managed on a pro bono basis, Colorado Impact Fund was launched by founders Jim Kelley and Ryan Heckman in 2014 with $62 million.

“Our underlying premise is that there is a role for the private sector in creating healthy communities, in education and natural resources,” said Kelley.

“Not all environment and social challenges lend themselves to market-based solutions, but many of them do,” said Heckman.

The fund’s investment strategy, according to its website, focuses on Colorado companies that create “attractive risk-adjusted returns while intentionally producing positive community outcomes.” It provides an initial investment of $2-$5 million per company and in some cases, additional funding can be provided.

To be eligible for an investment, Colorado businesses must meet what Colorado Impact Fund calls “positive impact criteria” as well as more traditional investment criteria.

Businesses must work in the industry sectors of community health, natural resources conservation, education and workforce development, or economic development. Each of these industry categories have a list of “positive impact criteria” that focus on things like improving access to key services and opportunities for underserved community members. A full list of criteria for each industry sector can be found here.

The Fund’s conventional investment criteria requires that companies provide a return on investment and opportunities for future growth. These criteria can be found here.

Colorado Impact Fund’s portfolio includes Bhakti Chai, which sells craft-brew Fair-Trade Certified black tea chai, TeamSnap—a platform that helps team sports organizers—and KM Labs, a laser technology company that makes products used in the healthcare, precision manufacturing, and semiconductor industries.

Colorado is home to 5 of the top 20 regions for tech start-up companies and is attracting talent nationwide and worldwide. Speaking at the launch of Colorado Impact Fund, Governor John Hickenlooper explained that “This is also a state where we believe our bold capitalistic aspirations can be in harmony with our obligations to our fellow man.”

Added Kelley, “The goal of the Colorado Impact Fund is to demonstrate that investors don’t have to trade financial returns for positive impact—you can, in fact, have both.”

Aspiring entrepreneurs, whether native or foreign-born, can pitch their ideas and learn more by contacting Colorado Impact Fund.

For questions about US visas for entrepreneurs, traders, and investors, contact the Law Office of Catherine Brown.

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