Momentus Capital Begins Innovative Impact Investments: Growth Capital for Companies Creating Social Impact

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 Ellis Carr, president and CEO of CDC Small Business Finance and Capital Impact Partners, each of which is part of the Momentus Capital branded family of organizations.

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. Carr 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.

Initial Supporters

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 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,” Mr. Carr said. “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. Carr 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 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.”