Momentus Capital Begins Innovative Impact Investments: Growth Capital for Companies Creating Social Impact
These investments will help companies grow and create impact in their communities, filling a crucial gap in the CDFI space while taking a different approach than traditional venture capital.
NOVEMBER 16, 2022 (Arlington, VA/San Diego, CA) – The Momentus Capital branded family of companies is proud to launch its Impact Investments line of business to jumpstart growth-stage, for-profit businesses that are creating social impact. These investments will focus on companies with diverse leadership and/or are operating in communities of color.
Many of these companies need something other than traditional debt — so that they can instead concentrate their resources on growing their enterprises. However, those opportunities are often not available. For example, less than 1% of venture capital funding nationally goes to Black founders. And equity investments make up less than 2% of CDFI portfolios in the United States.
“As a mission-focused organization, we provide support in a way that helps owners maintain control over their companies. We work alongside these owners to help them grow — seeking a modest, short-term return while enabling owners to maximize their impact within the community through economic growth and job creation,” said Raymond Guthrie, chief investment officer and head of capital deployment for the Momentus Capital branded family of companies, which includes CDC Small Business Finance, Capital Impact Partners, and Ventures Lending Technologies, among other independent companies.
This is another innovative approach to providing a continuum of financial, knowledge, and social capital to advance community solutions.
“We are regenerative rather than extractive. That is vastly different from the way traditional venture capital tends to operate,” Mr. Guthrie added. “Most for-profit investors seek to maximize financial returns and make decisions that serve their own interests rather than the interest of the businesses or the communities in which they operate.”
Instead, Momentus Capital’s Impact Investments line of business works to ensure that equity stays with the entrepreneur. As the business grows and targets are reached, Momentus Capital takes a percentage of revenues or profits, with the goal of exiting completely and selling shares back to the business owner within 3-5 years.
Momentus Capital’s Impact Investments line of business has already received commitments from the following supporters: JPMorgan Chase; Macy’s, Inc.; Max M. & Marjorie S. Fisher Foundation; National Cooperative Bank; Northwestern Mutual; PNC Bank; the University of Maryland Medical System; U.S. Bank; and Westfuller.
The current target geographies for Momentus Capital’s Impact Investments line of business include Atlanta; California; Detroit; Miami; the New York Tri-State area; Seattle; the Texas Triangle area; and the Washington, D.C., Metro area.
Some of the first investees include:
- SameSky Health, a Los Angeles area-based company focused on health equity and access to traditionally underserved communities
- Obran Cooperative, a Baltimore-based conglomerate whose subsidiaries include Obran Health. It is working to increase access to quality home health care in Southern California, including in BIPOC communities.
“It was clear to us that Momentus Capital values working with partners to impact change in the health care system and drive health equity,” said Abner Mason, CEO of SameSky Health. “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.”
By working with companies that are creating social impact, Momentus Capital’s Impact Investments group is focused on achieving the following goals:
- Bringing institutional capital to disinvested businesses and communities
- Addressing systemic issues of inequality and closing the racial wealth gap
- Increasing healthy and affordable food access for people living within food deserts or who are food insecure
- Improving access to healthcare and insurance
- Growing cooperatives
These investments are intended to help investees scale, create jobs, and address social determinants of health.
“Growth-stage, community-centric businesses can be the economic engines for job creation and community development, yet these enterprises are often not the focus of traditional financial institutions and are poorly served by investors,” said Ellis Carr, president and CEO of the Momentus Capital branded family of companies. “Momentus Capital works with these entrepreneurs and community development leaders to ensure a continuum of capital and training programs that set up their businesses for success.”
These businesses are also able to tap into the more than 80 years of combined small business and community development experience that Momentus Capital brings to the table, including:
- Business advising and capacity building programs
- Early- and growth-stage loan products, both traditional and alternative
- Non-dilutive preferred equity whereby cash flow positive businesses pay a fixed payment and dividend
- Mezzanine debt that helps companies bridge between rounds of equity
- Revenue/profit-sharing structures that can be used standalone or in combination with the above
“Our approach and experience enables us to work with companies at various stages, including critical growth points, and provide tailored solutions to fit businesses’ needs,” Mr. Guthrie said.
More information is available on the Impact Investments website.
Quotes From Initial Supporters
JPMorgan Chase: “JPMorgan Chase is committed to helping grow underserved small businesses, tackling challenges including access to capital, market connections, and management,” says Shaolee Sen, Head of Global Small Business Philanthropy at JPMorgan Chase. “We are pleased to be supporting Momentus Capital as they work to address racial equity and support growth-stage companies through innovative impact investments.”
Macy’s, Inc.: “Macy’s, Inc. is dedicated to shaping the future of U.S. retail and growing underrepresented businesses and entrepreneurs,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “Through our social purpose platform, Mission Every One, and over the last 10 years Macy’s, Inc. has remained committed to investing in high-growth underrepresented businesses and look forward to working with Momentus on this critical work.”
Max M. & Marjorie S. Fisher Foundation: “The work of Momentus Capital creates profound and lasting change within communities. Their innovative efforts to build wealth inside neighborhoods align with our deeply-rooted values of justice and repairing the world,” said Meredith Freeman, Director of Alignment & Impact Investing at the Max M. & Marjorie S. Fisher Foundation. “We are proud to partner alongside the Momentus Capital team, and their entrepreneurs, as an early stage investor.”
National Cooperative Bank: “National Cooperative Bank is proud to be a lender/ investor in Momentus Capital’s Impact Investments line of business which will provide critical capital to diversely owned and led companies and cooperatives nationwide,” stated Ann Fedorchak, Director of Cooperative and Community Development for NCB. “For over 40 years, NCB has had a mission to support low-income communities and cooperative development. Through our participation, we will provide a national reach that will focus on industries, jobs, and small businesses that are critical to strong and healthy communities.”
U.S. Bank: “U.S. Bank is excited about this investment opportunity with Momentus Capital because it provides support directly where it’s needed – to businesses owned by people of color,” said Zack Boyers, Chairman and CEO of U.S. Bancorp Community Development Corporation, the community investment division of the bank. “Through U.S. Bank Access Commitment, we’re focused on addressing the racial wealth gap and helping build wealth in communities of color. Investing with Momentus Capital is another way for us to expand our impact.
The University of Maryland Medical System: “We are pleased to include Momentus Capital among investees for our recently-announced social impact investments,” said Mohan Suntha MD, MBA, President and CEO of the University of Maryland Medical System. “Momentus’ mission aligns well with our System’s investment and community impact objectives to address disparities, and we look forward to future collaboration to support the communities we serve.”
Westfuller: “Westfuller is tremendously excited to partner with Momentus Capital on the launch of its Impact Investments business line. As a BIPOC-owned and operated financial services firm, we believe this is the right paradigm for catalytic capital needed by diverse, growth stage entrepreneurs — one rooted in equitable outcomes for all stakeholders,” said Ian Fuller, CEO of Westfuller. “This innovative integration of impact dollars for placed-based social enterprises serving disinvested communities demonstrates another path for the regenerative promise of impact-driven, private equity capital. With Momentus intentionally centering economic and racial justice in its investment thesis, we’re proud to support this strategic blend of impact capital tools, committed to scaling profitable, diverse-led, social enterprises.”
About Momentus Capital
Momentus Capital is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve.
Through our family of mission-focused organizations including Capital Impact Partners, CDC Small Business Finance, and Ventures Lending Technologies, we are working to reinvent traditional financial systems that have failed to address systemic issues of inequality, economic empowerment, and the widening racial wealth gap.
We offer a continuum of financial, knowledge, and social capital to help local leaders build inclusive and equitable communities and create generational wealth. This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology services that advance locally-led solutions.
Each organization under the Momentus Capital brand will still operate as separate entities, but their clients will now have access to more resources and products.
Leveraging 80 years of combined experience, nearly $3 billion in assets, and strong community engagement, we have delivered $23 billion in financing, created and preserved 250,000 jobs, and served 12,000 small businesses and five million people across their history.
With headquarters in Arlington, Virginia, and San Diego, California, Momentus Capital operates nationally with a focus on larger urban areas and cities in Arizona, California, Michigan, Nevada, New York, Texas, and the Washington metro area.
Learn more at momentuscap.org.
About the Max M. & Marjorie S. Fisher Foundation
The Max M. & Marjorie S. Fisher Foundation’s core philosophy is grounded in the beliefs of our founders and the family’s shared Jewish values that life’s purpose is found in service to others. The mission of the Foundation is to enrich humanity by strengthening and empowering children and families in need. In the Jewish tradition of tzedakah, the Foundation works to repair the world (tikkun olam) alongside those who share our mission.
About National Cooperative Bank
National Cooperative Bank is dedicated to strengthening communities nationwide through the delivery of banking and financial services, complemented by a special focus on cooperative expansion and economic development. NCB provides financial products and services for the nation’s cooperatives, their members, and socially responsible organizations. To learn more, visit www.ncb.coop, National Cooperative Bank on Facebook and Instagram, or on Twitter @natlcoopbank.
About PNC Bank
PNC Bank, National Association, is a member of The PNC Financial Services Group, Inc. (NYSE: PNC). PNC is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.
About the University of Maryland Medical System
The University of Maryland Medical System (UMMS) is an academic private health system, focused on delivering compassionate, high quality care and putting discovery and innovation into practice at the bedside. Partnering with the University of Maryland School of Medicine and University of Maryland, Baltimore who educate the state’s future health care professionals, UMMS is an integrated network of care, delivering 25 percent of all hospital care in urban, suburban and rural communities across the state of Maryland. UMMS puts academic medicine within reach through primary and specialty care delivered at 11 hospitals, including the flagship University of Maryland Medical Center, the System’s anchor institution in downtown Baltimore, as well as through a network of University of Maryland Urgent Care centers and more than 150 other locations in 13 counties. For more information, visit www.umms.org.
About U.S. Bank
U.S. Bancorp, with approximately 70,000 employees and $591 billion in assets as of June 30, 2022, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. The company has been recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2022 World’s Most Ethical Companies and Fortune’s most admired superregional bank. Learn more at usbank.com/about.
Founded in 2011, Westfuller is a multi-racial, gender diverse, independent and objective investment advisory firm. Drawing from deep investment expertise, maximizing assets for enduring systemic change, and leveraging diverse perspectives, the firm orchestrates multifaceted investment strategies to advance progress and possibility in the world. With offices in New York City and San Francisco, the firm manages the investment advisory needs of social justice foundations, endowments, and private clients seeking legacy and impact. Westfuller is a certified B-Corporation with a commitment to use business as a force for good. Learn more at westfulleradvisors.com.