Growth Capital Without the Debt: Understanding Non-Dilutive Funding

Written by Capital Impact Partners on April 29, 2025. Posted in Blog, Impact Investing

At Momentus Capital, our Impact Investments team provides flexible, non-dilutive funding to growth-stage, mission-driven businesses. Unlike traditional equity investors, we prioritize capital solutions that empower entrepreneurs without requiring you to give up ownership or accept restrictive covenants or guarantee requirements.

Whether your company is growing through innovation, market expansion, or even through acquisition, our Impact Investments team offers two unique non-dilutive financing options for growth capital: 

• Profit Share Preferred Equity; and 
• Revenue Share Mezzanine Debt

At Momentus Capital, we offer you a continuum of capital with comprehensive financial solutions for entrepreneurs, developers, community-based organizations, and partner lenders — supporting you at every stage of your growth.

What is non-dilutive funding?

First, it’s important to define what non-dilutive funding does. It allows you to raise capital without giving up ownership or equity in your company. Unlike traditional loans that require fixed payments regardless of your company’s performance, or venture capital that requires you to  give up partial ownership – and with it, some say control over your company – non-dilutive financing is an alternative option that prioritizes impact and aligns with your success. To support your growth, especially if you have a strong community presence, we offer non-dilutive financing options in the form of profit share preferred equity and revenue share mezzanine debt. Each investment option serves differently depending on your business needs.

Profit Share Preferred Equity: Investing in Long-Term Success

Profit share preferred equity differs significantly from traditional equity options. Essentially, instead of gaining a partner that takes an ownership stake in your company, you gain an investor focused on your long-term success. 

Instead of relinquishing a larger degree of control, you receive growth capital in return for a percentage of profits and dividend payment. When a pre-determined multiple on the investment is achieved, the shares are redeemed. Additionally, while the investment targets a three-to-five-year holding period there is no fixed term.

To Qualify

Your company must have a minimum revenue of $4 million and have proven profitability.

Revenue Share Mezzanine Debt: A Flexible Repayment Option

Revenue share mezzanine debt offers a different approach. With this option, you pay a percentage of your company’s revenue, plus a fixed interest payment. This revenue-based option means that when your business is thriving, your repayments are higher, and when things slow down, they are lower. This flexibility makes it distinct from traditional debt which requires you pay fixed monthly or quarterly payments. It is particularly beneficial for your business if you have fluctuating or seasonal cash flow.

Revenue share mezzanine debt has a three-to-five-year term with a set maturity date. This is a crucial difference from our equity product. That provides a clear timeline for both you and us – a set end date – where the principle and any remaining interest/revenue share payments are due. Furthermore, since this option does not allow for business collateral or personal guarantees, it protects both your business assets and your personal assets. 

To Qualify

Your company must have a minimum revenue of $4 million and a positive cash balance.

Choosing the Right Non-Dilutive Funding

Selecting the right growth capital option depends on your specific needs and circumstances. While both of our non-dilutive financing options help local businesses like yours grow, the real impact is in keeping wealth within your community.

Profit share preferred equity is an alternative lending option best suited for businesses expecting long-term profitability and stability. It gives you the ability to invest in growth without the burden of fixed debt payments or dilution of ownership.

Revenue share mezzanine debt is ideal if your business has fluctuating cash flow. This revenue-based financing allows your repayments to adjust with revenue, offering you flexibility and peace of mind.

At Momentus Capital, we’re committed to investing in local impact and supporting community-centric businesses. Our Impact Investments team offers these alternative financing options to help your business achieve its goals without the constraints of traditional funding.  

Every business is unique, and we work with you to find the best solution for your specific needs. Whether that solution is a Community Development loan, an Impact Investment, an SBA loan, or a combination of any of these, we can help.

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Forty Years of Breaking Barriers to Success and Building Communities of Opportunity

Written by Zeina Heleka on October 27, 2022. Posted in Affordable Housing, Aging, Blog, Charter Schools, Co-op, Education, Equity & Justice, Health Care, Healthy Food, Impact Investing, Momentus Capital

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Impact Investing for Expanding Health Services: Q&A With SameSky Health CEO Abner Mason

Written by External Marketing on August 16, 2022. Posted in Blog, Impact Investing, Momentus Capital, Small Business

Abner Mason came up with the idea for SameSky Health in 2013 with a dream of creating a company that is on a mission to advance health equity. From its inception, SameSky Health has been focused on engaging and helping Americans who are marginalized or under-resourced.

To advance that mission, Mr. Mason worked with Momentus Capital, a family of mission-driven organizations that includes Capital Impact Partners, CDC Small Business Finance, and Momentus Securities. Through our impact investing program, SameSky Health received a $5 million venture debt bridge loan to support the growth of the company. We talked to Abner about how this investment is helping SameSky Health in its efforts to address a significant market challenge to help disinvested communities get guidance and navigate a complex health care system.

Q: What do you feel you have achieved the most since starting the company?

Abner: I’m very passionate about the mission of SameSky Health, to create cultural connections for a healthier, more equitable world. I feel fortunate to have built a company where people who are just as passionate as I am about our mission have joined the organization. We’ve built a team of incredibly talented people who are focused on creating a solution that enables equitable health care.

Health equity is at the center of everything SameSky Health does. We have established ourselves as a leading health equity company. We are focused on raising the bar in America for health equity and how we should treat the people we are trying to help navigate our complex health care system.

We have built a leading, scalable health equity technology platform, unlike no other, that enables health plans and other health care stakeholders to comply with new health equity-related requirements that they will have to comply with now and in the future.

Q: The need for funding means that you’ve achieved a certain amount of growth. What challenges/barriers have you faced in terms of attaining funding for SameSky Health?

Abner: One of the major challenges I have run into over the course of my career is trying to raise money as a founder of color. I am optimistic about the future, as I have seen great progress being made from investors in startups supporting new businesses founded by people of color, which has more than doubled since 2020.

Another challenge I have faced in the past is gaining support from investors to raise funds for a solution that addresses low-income, underserved communities, particularly those people who are enrolled in Medicaid. Up until recently, venture capitalists did not understand the Medicaid market or the extraordinary need for advancing health equity. I am very optimistic about the traction in investment and innovation in this space over the past two years to help address health disparities.

Q: Momentus Capital, however, is able to offer something that hopefully can make an impact with a lower risk. Any thoughts on that relationship so far?

Momentus Capital is essential for a company like SameSky Health. The company played a crucial role in helping SameSky Health secure bridge funding as we progress to raise our Series C funding, which is the next step. We are deeply grateful for their flexibility and support of SameSky Health.

Q: Why did you choose Momentus Capital versus another investor? What was the difference maker for you?

Abner: It was clear to us that Momentus Capital values working with partners to impact change in the health care system and drive health equity. This aligns well with our values and mission. Their approach allowed us to easily structure a deal that was fair to everyone given our alignment around advancing health equity. Momentus Capital stands out from others for their flexibility in working with our team and their ability to quickly move toward a transaction to help us continue scaling and driving equity in health care.

Q: How do you think SameSky Health improves the lives of people in the community through health care, and how does proper investment into funding drive these positive aspects?

Abner: SameSky Health has built an innovative solution that combines technology and human touch to deliver a culturally tailored, personalized experience to members of health plans. If the health care industry continues to try to address challenges the same way they always have, we’ll never achieve better outcomes. Innovation and investment in health care IT innovations are so important. Investors need to support startups that are building solutions that will meet the needs of low-income, underserved communities. Investors need to be more proactive in seeking opportunities to work with companies such as SameSky Health.

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Now You Can Invest In Communities’ Growth with Capital Impact

Written by Michelle Betton on October 17, 2017. Posted in Blog, Impact Investing, Strategy

The idea of “community” often conjures images of a geographic place, a shared space where people congregate. While true, communities can be so much more. Their true potential can manifest itself when they foster connections between individuals who share mutually beneficial ideals. Through championing those shared values, community members can create a future of shared prosperity.

This idea of community inspires us here at Capital Impact to look beyond the boundaries of space and place and take action to create ‘communities of opportunity’ built on a foundation of equity and inclusion. In doing so, we can create a network of connections that supports successful outcomes for all.

In an effort to fulfill that vision, we are announcing a new opportunity that allows you to embrace this broader concept of community and support the values that matter to you. Beginning this week, we are offering Capital Impact Investment Notes, the proceeds of which will support investments in underserved communities across the country. I am excited that S&P assigned a long-term issue credit rating of AA to our Notes*, marking the first time an S&P rated Notes offering is being made available by a Community Development Financial Institution on a continuous basis.

For as low as $1,000, you — as an individual or institution — will have the ability to invest in our mission-driven efforts to create jobs, support equitable access to critical services, foster good health and drive economic development — things that our country so desperately needs.

For more than 30 years, Capital Impact has lent to, invested in and developed programs with the residents in underserved communities, communities that traditional lenders are reluctant to support. Central to that effort is our work to partner with and empower communities to identify locally driven solutions that help address their most pressing needs.

I encourage you to read our stories of impact and see that work through the eyes of those individuals in communities who are benefiting from this collective social impact effort. Now you can help us create more stories of positive social change.

On our website you will find the current Prospectus and Pricing Supplement and terms and highlights associated with the offering of our Notes. I invite you to discuss these details with your broker.

This announcement is an important step in providing another way for you to align your investments with your values and truly make a difference in the lives of others.

I hope that you will join us in creating communities of opportunity that break down barriers to success and expand equity for all.

Ellis Carr

DISCLAIMER

This is not an offer to sell or a solicitation of an offer to buy any securities. Such an offer is made only by means of a current Prospectus (including any applicable Pricing Supplement) for each of the respective Notes. Such offers may be directed only to investors in jurisdictions in which the Notes are eligible for sale. Investors in such states should obtain a current Prospectus by visiting www.capitalimpact.org/invest/capital-impact-investment-notes. Investors are urged to review the current Prospectus before making any investment decision. No state or federal securities regulators have passed on or endorsed the merits of the offering of notes. Any representation to the contrary is unlawful. The notes will not be insured or guaranteed by the FDIC, SIPC or other governmental agency. As of October 16, 2017, the Notes will be offered for sale in all 50 states and the District of Columbia, excluding the States of Arkansas and Washington and the Commonwealth of Pennsylvania.

*S&P Global assigned a long-term issue credit rating of AA to the Notes on September 7, 2017. Please check the current Pricing Supplement at the link above for the S&P credit rating assigned to Notes currently being offered for sale. An S&P credit rating is not a recommendation to buy, sell or hold Notes and may be subject to suspension, reduction or withdrawal at any time by S&P.

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How CDFIs Expand Economic Opportunities to Grow Communities

Written by Michelle Betton on October 10, 2017. Posted in Blog, CDFI Interest, Impact Investing

Expanding opportunities for residents in low-income communities is the focus of community development financial institutions (CDFIs). These mission-driven institutions prioritize social, economic and racial justice for underserved communities over and above profits, meaning that CDFIs invest in places and projects that traditional lenders are often reluctant to support.

Central to that effort is working to partner with and empower communities to identify locally driven and sustainable solutions that help address their most pressing needs.

What does that look like in practice?

More Than Money, a podcast that explores how “we can use our values to inform how we engage with our work and invest our wealth,” recently sat down with Ellis Carr, president and CEO of Capital Impact Partners, to discuss the organization’s approach to community development and the role of CDFIs in communities.

Listen as Ellis talks with host Dawn Carpenter about our values and how we work as market maker and market catalyst to help communities thrive. We also invite you to read the full transcript below.

More Than Money – Ellis Carr Interview Transcript

Dawn Carpenter (DC): Welcome to More than Money, a podcast that explores how we engage with our work and invest our wealth.

I’m your host, Dawn Carpenter, and for the next 30 minutes, we will explore what our work and wealth mean to us and to others. Our guests share their personal stories of why they work and how they engage as fiduciaries of the material world.

Welcome to the More than Money Podcast. I’m your host, Dawn Carpenter. And for the next 30 minutes, we are going to be on a journey to look at how capital is brought to underserved communities. We are going to be joined in the studio today by the CEO of Capital Impact, a CDFI, yes, more acronyms in this world. CDFI means Community Development Financial Institution. CDFIs are special financial organizations, be they loan funds or regulated banks or financial institutions, who have a special commitment to deploying a large portion of their lending capital into underserved communities. They are designated as such by the U.S. Treasury Department, and some work locally, but today we’re going to hear from Capital Impact, who happens to be located in the Washington D.C. market but is working all throughout the country.

And to complement our conversation about CDFIs with Capital Impact, we are going to hear from one of the users of capital from Capital Impact, Axis Health, a community health provider in the Bay Area of San Francisco, California.

Community Development Financial Institutions, or CDFIs as we call them, share the common goal of expanding economic opportunities in low income and low wealth communities. They do this by providing access to financial products and services for residents and businesses in those disinvested communities. Now CDFIs can be banks, credit unions, loan funds, microloan funds, or even venture capital providers. But what they have in common is that CDFIs are helping families finance sometimes their first homes, by supporting residents who are starting or expanding their businesses, and investing in local health centers, schools, or community centers. The goal of CDFIs is to foster economic opportunity and revitalize neighborhoods.

Now today, we have with us in the studio Ellis Carr. Ellis is the President and CEO of Capital Impact Partners. Capital Impact Partners is a CDFI and is headquartered in Arlington, Virginia, and whose ambitious agenda is anchored by four strategic pillars; addressing systematic poverty, building equitable communities, creating healthy communities, and ensuring inclusive growth.

Ellis Carr, welcome to the More than Money Podcast.

Ellis Carr (EC): Thank you, Dawn. I’m really happy to be here.

DC: Excellent. Well, let’s get started with a bit about your background and the history of Capital Impact Partners.

EC: Sure. So, Capital Impact is a national nonprofit CDFI, and as you mentioned, we’re headquartered in Arlington, Virginia. We have offices, although, in Oakland, California and Detroit, Michigan.

Our mission is to help people and communities break the barriers to success, and we accomplish that by providing financing and technical assistance to help expand access to quality healthcare, education, housing, and food. We got our start a little over 30 years ago, at a time where high-interest rates, inflation, unemployment had a disproportionally adverse effect on low-income communities. And we leveraged the co-op model, the cooperative model, as a means of increasing economic participation, and also a way to build community wealth. We still do those things today.

Since our inception, I’m really happy that we’ve been able to invest over $2 billion in communities across the country, and we currently have about $800 million in assets under management today.

DC: Well, how does your CDFI fit in the financial ecosystem? What are the sources of capital, how do you evaluate risk and return, and probably most importantly, impact?

EC: Great questions. I’ll start with the first one.

So, Capital Impact, and CDFIs like it, primarily serve a group of people that are currently not being served by mainstream financial institutions. And for that reason, we play three distinct roles in communities, the first as a market maker. Capital Impact and CDFIs like us are often market makers because we oftentimes work in the distressed community that has a need that’s not being fulfilled by an existing product or service. And that’s where Capital Impact, and CDFIs like us, that then partner with residents in that community and create tailored resources to address that need.

I think the second role we play in the financial ecosystem is as a market catalyst. Because we can’t and don’t do our work in a vacuum or alone, we develop public-private partnerships that combine capital that invests federal dollars alongside private sector capital from larger institutions. And we’re able to do that because we’re embedded in communities and we have a strong track record, and the ability to de-risk a transaction for a large and, frankly, regulated institution, so that we can bring the much-needed resources into communities that may not otherwise have those resources.

And then, I think the third way that we play, and this has been an evolving role for CDFIs, is what we call the role as a community quarterback. And that really is effectively an organization that brings people together, articulates the vision, aggregates capital, and aligns efforts from multiple parties or stakeholders towards the common goal.

I think a good example of that would be some of the work that we have done across the country, around developing strategies that really help build healthy communities. And you talked a little bit about kind of our four strategic pillars around equitable communities to have access to quality schools, quality and affordable housing, and options for healthcare and healthy food.

In terms of capital, we get our capital from a variety of sources. Primarily, we get our capital from; we both raise both debt and equity, and because we’re nonprofit equity translates into grants from really a few key sources; large financial institutions and banks. Larger financial institutions would be pension funds and banks, foundations, government, from the federal government and state government, and also from individuals, and we do that effectively.

And that gets to your other comment question around looking at risk and return and impact. We are able to combine those sources to provide solutions that work for the community, that embed most of the benefit of the work that we do into communities, while also encouraging private investment into those communities as well.

And so, we evaluate risk and return much like all of our traditional financial services organizations would, but we also look at impact. And impact is kind of our reason for being, and so that really is one of the primary ways that we look at the transaction. We look at it holistically, but we tend and can take more risk because impact is first and foremost.

I think it’s also important to say from our return perspective that we are profitable but we’re not profit maximizing. So, that allows us a good amount of flexibility to be able to really push for impact and ensure that we’re embedding the right benefits and the right controls in place in the community.

DC: Well, that’s a whole lot to accomplish. What type of skills do your bankers have to have to do this work? It sounds like you almost have to be magical storytellers.

EC: So, I would say first and foremost you have to have a passion for the mission and for helping others.

To your point, you have to be extremely communicative, and the ability to interact effectively with a ranging group of people from residents in the community to community leaders, to bankers on Wall Street. You have to be able to communicate effectively with them and so speak the very languages that each one of those constituencies can relate to you.

I think that you have to be able to multitask, right? We are an organization of about 80 folks, and so we have to wear multiple hats. And so, having the ability to multitask is critical.

As well as having great analytical skills. Because we are kind of a hybrid between a traditional financial services organization, and also fighting for social and economic justice in these communities, that’s not a typical role that you can find just anywhere. And so, we have been really focused on developing an associate program here at Capital Impact that really helps people to come in and understand credit, understand the sectors we work in, and how to lend to them.

DC: Well, on that note, how does your private sector background, how has that prepared you for the work that you do at Capital Impact?

EC: Sure. I mean, I have been fortunate to work for a few great companies before I came to Capital Impact and held positions in operations, corporate finance, strategy, and capital markets. And I think I’ve been able to leverage all of those experiences at Capital Impact.

I think for me, one of the most important things that I’ve been able to leverage from my background is, what I’ve just mentioned, the ability to speak and be conversant in multiple different constituencies, specifically, kind of to our Wall Street investors and our large investors. Because it’s important for them to have the confidence to invest in us as a financial intermediary so that we can more effectively do our work on the ground. So, ensuring to them that we have the right procedures and protocols in place, and also have the right skillsets to be able to do the work we have, has been truly important.

And I’d say, also, just working for larger organizations you get a really good understanding of best practices across the continuum of business that we’ve been able to implement effectively here at Capital Impact.

DC: Well, I’ll tell you, measurement is key. So, how do you measure the success of what you’re doing, and what’s some of the work you’re most proud of?

EC: Great question. So, I think we measure our success in two ways. The first, and I mentioned this earlier, is impacting in the community; and the second is financial sustainability.

Again, our reason for being and for doing what we do is to create real and true long-lasting impact in communities. So, we measure and evaluate both the outputs; i.e., the number of school seats that we create and the jobs that create in communities. But we also look at the outcomes; things like the number of students who graduate from high school, and also go on to graduate from college and are able to give back to their communities.

We also kind of look at financial self-sustainability as well, which means that we need to be profitable. While we’re not, again, profit-maximizing we also recognize that for us to continue to invest in communities like we are, we need to ensure that we also reinvest in Capital Impact so that we can double-down and do the things that we do across the country.

DC: Kudos to all of you because you’ve been doing some extraordinary work.

But you know, before I let you go, I would be very remiss by not telling you that we’ve snagged one of your biggest fans for the next segment here on the More than Money Podcast, Axis Community Health from the San Francisco Bay Area.

Now tell us, what about the project with the Axis Community Health Partners best illustrates the work that you’re doing at Capital Impact?

EC: I think I’m really proud of the work that we’ve been able to do with Axis. They provide critical healthcare resources for low-income residents around them.

And what I’m most proud about with that is the number of people that now we are able to help provide access for, healthcare access for, but also Axis is doing things and providing dental resources, and also mental health. All those things are significantly critical in underserved communities and really help for people to thrive, people to be able to go to school and to get a great education, and also for people to go to work.

So, I’m really happy that we were able to work with them and think they have been doing a fantastic job.

DC: Well, kudos, again, to all the work that you and your colleagues are doing.

Now, where can our listeners find you on the web?

EC: So, we are, we have our own YouTube channel, but you can find us at CapitalImpact.org.

DC: Excellent. Well, I urge all of our listeners to go out and learn more about the good work of Capital Impact.

And Ellis, thank you for joining us on More than Money. We hope to have you back soon.

EC: Thank you, Dawn.

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