Innovación Fund 1
United States of America
Last updated 13 May 2020, by Impactyield.
Developed countries (203) / More developed regions (202) / More developed regions (North America, Asia & Oceania) (153) / United States of America (112)
Innovación Fund is managed by Cielo CDVC (fund GP) a JV between Cielo Private Equity (www.cieloprivatequityfunds.com) and EDCO Ventures (www.edcoonline.org).
EDCO is a non-profit technology accelerator focused on developing economically distressed communities and targeting under-represented founders in high growth companies including: Women, Latinos, African-Americans. Complementing EDCO in the General Partnership is Cielo Private Equity, a firm whose principals have managed over $2.5B in capital across various industries and asset classes including: energy, real estate, venture capital, and angel investing.
Innovación Fund 1 is structured as a Community Development Venture Capital (CDVC) fund, a high-impact development-focused fund on the Texas Border and South Texas region. The target area contains 17 of the Top 100 poorest counties in the United States. Fifty percent of the children in this region live in poverty.
However, Texas is a place of tremendous opportunity. The state has created 40% of all new jobs in the U.S. since the Great Recession of 2008. EDCO Ventures has been developing a pipeline of high-growth companies ready for venture capital investment. These hidden gems, passed over by other US and Texas-based VC firms who lack local knowledge, relationships and the experience to work effectively in the region, are ready to provide a financial return to investors and serve as instruments of community wealth creation, shared prosperity, and inclusion.
Energy, Fixed Income, Private Equity / Venture Capital, Real Assets
Innovación plans to invest its funds in companies as follows: 10%-Pre-Revenue Stage, 10%-Early Stage and 80%-Growth Stage Investment.
At least half of the fund’s portfolio investments will be co-investments with other investors. In addition, the fund will maintain ten percent (10%) of its assets as a cash reserve, and to deploy the balance in the first two (2-3) years following the Initial Closing of the fund.
Innovación will utilize an Exit by Cash Flow (ECF) investment methodology, meaning that the fund will seek to recover the entire principal in a 5-10 year time frame beginning in year 1. The ECF model substantially reduces risk for LP's. The profits will be generated from a successful exit. Innovación expects the exit structures to mirror that of the Community Development Venture Capital Community including: 50% External Sale, 30% Management Leveraged Buy Out, and 20% ESOP, IPO, or other exit type.
However, considering the fund's goals of promoting shared prosperity and community development, Innovación will favor management buybacks as a way to preserve company ownership in the hands of founders, employees, and the communities.
of track record
the year funded
Key performance indicators
Asset manager: Cielo Private Equity
Product track record: Fund has 12 years of track record
Target IRR: 25%
Committed Capital: 3,500,000 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: United States of America
Product status: Open - committed capital
Style/Stage: Core, Early Stage, Growth Stage
Inception year: 2011
Vintage year: n.a.
Target region: Developed countries, More developed regions, More developed regions (North America, Asia & Oceania), United States of America
Target close date: 01/12/2013
Product term: 10 years
Assets under management: 100,000,000 USD (US Dollar)
Investment size: Min: 500,000; Max: 10,000,000; Avg: 5,000,000
Co-investment policy: LPs have priority, With LPs and non-LPs
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 0
Fund investments to date exited or repaid: 0
Management fee: 2%
Carried interest: 20%
Hurdle rate: n.a.
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: Calvert Special Equities Raza Development Fund Texas CDC Dr. Hector Ruiz Cielo Private Equity
Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Pension Funds, Other Institutional Investors
Phone number: 915 539 5552
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Elias (Lee) Urbina
Innovación will obtain strong social impact by making investments that maximize various social metrics. The elements below will be evaluated using an Impact Scorecard that measures Total Impact Potential (TIP).
1) Economically Distressed Community: Company Headquartered in an economically distressed community with per capital income that is 50% or lower than the state or national average.
2) Shared Prosperity: Company is committed in its bylaws to sharing a minimum of 10% of its profits with local charitable institutions, not affiliated with the company.
3) Inclusion: 30% or more of the company founders are Women, Latinos, or African-Americans.
4) Social Impact: Company's product or service is one that produces a positive effect on the environment, public health, or public education.
5) Benefit Corporation (B-Corp): Company is committed to a goal of 80 points out of 200 on the B Corporation Impact Assessment Tool by the time they graduate from the Innovación portfolio, the minimum score required to become a B Corporation.
6) Labor: Company is committed to paying living wages and providing best-in-class employee benefit packages.