The objectives of this pilot project include, but are not limited to:

• Becoming the world’s first accelerator / fund that is specifically designed to nurture, grow, and launch “Best for the World” B Corporations (i.e., companies that score ~130 points or above on the B Impact Assessment and have earned B Corp Certification)
• Increasing the number of women- and people of color-owned/managed B Corps
• Increasing the number of B Corps who are seeking to address climate change through their business model
• Helping start-up and early stage companies earn Pending B Corp status by:
• Incorporating stakeholder interests into their foundational legal documents (e.g., incorporate as a benefit corporation) to give them the freedom to pursue more than just profits
• Guiding them through the B Impact Assessment to help them implement best practices from the start, with a goal of achieving B Corp certification as soon as they are eligible
• Connecting prospective B Corps to a thriving network of over 1,850 B Corp mentors, potential suppliers, and referral partners

The benefits to investees include:

- All the benefits of becoming a Pending B Corp and eventually Certified B Corporation, including increased trust, brand value, retention, discounts, and more.

- Seed capital that will allow leadership to work “on” the business (rather than “in” the business) for at least one year

-Access to a thriving B Corp community, including membership in the regional B2B Networking groups in regions where they exist

- Introductions to other B Corps who could become mentors, suppliers, distributors, and/or partners

- A well structured container for developing key business systems that will enable growth

- A curated peer group of like-minded social entrepreneurs

Yes. Current advisory board members
include:

- Rose Marcario, President and CEO of Patagonia

- Alison May, Former CEO of Patagonia & Director, King Arthur Flour

- Hazel Henderson, Ethical Markets
Media

- Kat Taylor, CEO of Beneficial State Bank

- Konda Mason, CEO of Impact Hub Oakland

- Esther Park, CEO of Cienega Capital

- Gigi Lee Chang, Founder of Plum
Organics

- Justina Lai, Director of Impact
Investing at Wetherby Asset Management

- Bryan Welch, CEO at B The Change
Media

- Jeff Rosen, CFO at the Solidago
Foundation

Yes.

- At a minimum, at least 51% of all companies accelerated must be owned/managed by women.

- Similarly, at least 51% of all companies accelerated must be owned/managed by people of color.

- These are both minimum requirements, not the maximum.

Preference will be given to companies that meet the following characteristics:

- Companies whose business model is specifically designed to mitigate and reduce the effects of climate change (e.g., regenerative agriculture, carbon sequestration, alternative energy, eco-literacy, etc.)

- Companies that can become models for the development of local living economies supporting regional local self reliance. Models, in this context, means companies that provide needed goods and/or services whose practices and methods could be regionally replicated and adapted.

- Companies that prioritize worker ownership or worker inclusion in decision making.

We have a good list of companies from our work with over 100+ high-impact social entrepreneurs over the last six years. We have already identified over a dozen companies that would, preliminarily (pre-diligence), be a good fit for the accelerator.

Additionally, we anticipate that creating the world’s first Force for Good Accelerator will generate an incredible amount of interest and prospective applicants for this program (particularly from referrals from existing B Corps).

If anything, we anticipate that the large amount of interest in this project will allow us to hold a very high ethical bar for acceptance into the accelerator. This is a good problem to have.

Prospective participants will be evaluated based on:

• Recommendations from the Force for Good Accelerator / Fund advisory board
• Recommendations from B Lab and the B Corp community
• Commitment to earning Pending B Corp status on path to full certification
• Their preliminary score on the B Impact Assessment (or prospective score if a start-up)
• Their potential benefit to B Corp community (e.g., a key supplier for other existing B Corps)
• An analysis of their financial projections and historical performance
• Values alignment of the team
• Scalability and/or replicability
• Potential value for the B Corp brand
• Willingness to invest in support services

• Funding to recipients in amounts up to $100,000
• 12 months of service support provided by LIFT Economy and LIFT Economy Law
• Monthly service support includes the following (customized to the needs of each company):
• Impact vision support / business model optimization
• Support in preparing for a higher B Impact Assessment score
• Recruiting, hiring, orientation, onboarding and retention support
• Core value proposition refinement and marketing strategy
• Thought leadership development and support with associated marketing tactics
• Operational systems development
• Sales and business development strategy and tactics
• Customer service support strategy and project development
• Participants will also have access to dozens of seasoned B Corp executives who will play a mentorship role. Participants will also be part of a cohort of companies facing similar challenges to share tips, ideas, and best practices

First, we have run scenarios in our financial model and we believe 2.5% is a relatively conservative projection of the returns from the fund.

Second, our intention is to raise something called a “loan-loss reserve.” This is a pool of capital funded by charitable donations and grants. The loan-loss reserve would help pay back investors if the fund does not perform as well as expected.

It is important to note that we currently do not have a loan-loss reserve. We are actively speaking to individuals, foundations, family offices, and B Corps to solicit charitable donations to fund the loan-loss reserve. We cannot guarantee that we will be successful in raising these funds.

We will keep investors and other interested stakeholders updated about our progress via this WeFunder page.

We are designing the investments from the fund to the investees with an "integrated capital approach." This is sometimes referred to as a "cobbler" approach rather than a "cinderella" approach in which the type of investment that a fund will make is predetermined and the same for all investees.

The integrated approach calls for designing investment terms with each investee that match their stage, cash flow, market, anticipated future capital needs and sources (it might be appropriate for some investees to have a fixed interest rate and monthly payments after a grace period, it might make sense to structure the investment as a loan repaid on a royalty on gross revenues paid monthly, etc.).

We have modeled dozens of scenarios of hypothetical portfolios benchmarked off real-world performance (companies we've worked with over the last 6 years) of likely similar stage investees/enterprises mostly orienting towards a royalty on gross revenue model with a cap on repayment.

When running these scenarios, it shows that a royalty on gross revenues of 1-2% with a royalty pay back cap of 1.5-2.5x the investment calculates to an effective interest rate of 5-7% for the investee.

We are basing our model off of 500 Startups. In that model, for example, we would make a $100,000 investment in a company. The company would then pay LIFT ~$20k for a year of consulting services. This gives the company ~$80k in discretionary capital.

We thought about making this payment to LIFT optional. However, investors repeatedly said that they preferred that LIFT provide the entrepreneurs with services because it de-risks their investment.

This payment structure also helps LIFT cover basic expenses and not be incentivized to force a company to have an exit.

For example, most venture capitalists and angel investors prefer to take equity stakes in the companies they invest in. The only way those investors can get paid back, however, is if the company they invested in was acquired or went public. This leads to a perverse incentive for the investors to pressure companies to grow as quickly as possible (regardless of whether rapid growth negatively impacts workers, communities, or the environment). This is one of the negative outcomes we want to avoid.

Community Ventures is a non-profit 501(c)(3) that was set up a few years ago to help support the emergence of local living economies. The Force for Good Accelerator / Fund will be hosted at Community Ventures.

LIFT Economy will contract with Community Ventures to provide the accelerator coaching and support services.