Entrepreneurs in low-income and minority neighborhoods encounter numerous problems in securing capital. To address this capital gap this paper considers a new role for private foundations as community development venture capitalists (CDVCs). It is suggested that through grant making and program-related investments, foundations may assume an equity stake in neighborhood-based entrepreneurs and acting as CDVCs apply lessons from the value-added component of private equity financing, including drawing on their expertise, professional contacts and financial resources to contribute to entrepreneurial efforts in the inner city.
G24, M13, L31
Entrepreneur , Foundations, Neighborhoods, Community Development
Gittell, Ross; Sohl, Jeffrey; and Thompson, Phillip
"Investing in Neighborhood Entrepreneurs: Private Foundations as Community Development Venture Capitalists,"
Journal of Entrepreneurial and Small Business Finance:
2, pp. 175-191.
Available at: http://digitalcommons.pepperdine.edu/jef/vol5/iss2/6