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Part 2: Profit Sharing and Gender Bonus Models to Accelerate Impact

Thursday, February 15, 2024
12:00 PM 1:00 PM

Canada (map)

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Part 2 - Event Recap

February 15, 2023

Key takeaways from this conversation:

Equitable Ventures levels the power dynamics between investors and founders, making venture capital less extractive. A stark contrast to the extractive Wall Street model (‘I give you the money, you do what I say’), the philosophy of EV is to treat founders fairly, support them so they can grow their businesses and make them owners in the fund.
“If you want to be at an arms length with your investees, this model is not for you. If you want to keep all your upside, this is not for you. If you are looking to be more relationships driven in the way you invest, this is 100% for you”.
The 28 metrics in BCV’s gender baseline study is a tool that serves multiple purposes. It helps companies understand where they are on key gender metrics compared to companies in the region. It also helps BCV to integrate gender into their conversations with their portfolio companies – i.e. why are they having a harder time onboarding women? Is that a management priority now or are they focused on other things? In the next phase, BCV will add outcomes metrics related to improvement of livelihoods.
Eva encourages people to not view these types of baselines as a daunting tasks – start by picking five benchmarks that will support awareness of portfolio companies’ performance and measure against them.
Impact linked carry models incentive GPs to create impact, but they don’t shift ownership away from those who have always had it (the GPs). On the other hand, Equitable Venture makes this shift, thereby addressing power dynamics by giving portfolio companies a stake in a venture fund.

BCV’s portfolio companies can trigger their Equitable Venture share by achieving business, gender and climate metrics. Listen to the recording to hear more about this approach and the metrics used by the fund.

Resources related to the conversation:

Beyond Capital Ventures 2022 Impact Report.
Interview with Eva about the Equitable Venture structure on Entrepreneur.com.
Article on Equitable Venture in Eva’s Conscious Investor magazine.

If you are interested in learning more about the Equitable Venture Model, please contact Isabelle Schmidt at isabelle@beyondcapitalventures.com

Part 1 - Event Recap

October 17, 2023

Key takeaways from this conversation:

There isn’t a lot of data yet around profit sharing models like Equitable Venture. But BCV was committed to using a model that levelled the playing field between investors and investees and was not extractive. They decided they didn’t need the data to start doing it.
BCV intentionally designed their fund so investors don’t have to choose between strong financial returns and impact. They are crowding in investors who are looking for strong returns, and along the way these same investors learn about gender smart strategies. It’s a win-win.
BCV ensures that women are meaningfully and actively engaged in their portfolio companies. They do this by having a small portfolio in which they are actively involved, and they spend the time to really get to know the founders. They screen for conscious leadership in all their founders to ensure they are aligned in their vision that all stakeholders matter (i.e. employees, suppliers, investors).
The Gender Empowerment Bonus model is transferable across themes. BCV plans to use it for climate next year.
The Equitable Venture model sounds complicated but it is not. Each founder has specific triggers for vesting and when they meet those triggers, they become a carry holder.
The key challenge fund managers need to wrestle with is whether they are prepared to give up some of their carry. Once they get over that hurdle, they can make it work.

Invitation

On February 15th at noon EST, join the Canada Forum for Impact Investment and Development (CAFIID) in Part 2 of a fireside chat with Eva Yazhari, founder and General Partner of Beyond Capital Ventures, a women-led venture capital firm that invests in early-stage companies in India and East Africa. In October, 2023 we heard from Eva about the innovative funding structures and approaches that the fund has developed to accelerate impact:

Using their Equitable Venture model, Beyond Capital Ventures shares a portion of its carried interest with portfolio company founders who meet performance milestones;

Drawing on their deep commitment to gender equality, and to encourage their portfolio companies to promote women into management roles and adopt gender-inclusive policies, Beyond Capital Ventures uses a Gender Empowerment Bonus. Companies that meet these additional criteria are eligible to double their carry.

In this discussion on February 15th, we will hear more from Eva about these models, updates on results to date and dive deeper into some of the questions that emerged from the first session.

We hope you can join us during this inspiring conversation with Eva.