Venture capital funds are usually structured as limited partnerships with a set lifetime, after which they are dissolved. The fund manager must deploy capital in the earlier years of the fund’s life, make follow-on investments in portfolio companies as needed, work to grow portfolio companies and exit their investments during the life of the fund. The funds are operated for investor returns and limit their investments to candidates that offer strong revenue growth and movement to or toward profitability. The portfolio can reflect well under 1% of opportunities presented for consideration. Investment return is properly the key metric of success, given the objective of maximizing investor returns.
For the Venture Jobs Foundation, the mission is built on investments made to provide jobs creation in struggling neighborhoods. In pursuing this mission, absolute return is not the top priority, but some return is important for the Foundation to renew its capacity to provide ongoing financial support to small businesses. As well, because the Foundation is an evergreen organization, capital can remain in an investee business for longer periods of time. Nor is the growth needed to obtain capital from a formal venture fund required by the Foundation. So called "lifestyle" or community businesses, which would not meet the revenue growth levels for a venture fund, can be solid candidates for investment by the Venture Jobs Foundation.
We will seek to make mission-related investments in financially responsible businesses that offer meaningful jobs creation potential for the region. Over time, we hope to add to the base of investable capital through ongoing donations and grants to the VJF, and through repayment of our invested capital by those receiving support from the Foundation. We hope that community minded individuals and organizations will foster our growth through donations.