Image source: https://www.instagram.com/p/CMDe9KRlzKa/?img_index=8
Context
Propeller operated a $1M pilot debt fund, known as the Social Venture Fund, backed by leading impact investors and foundations such as Living Cities, Reinvestment Fund, and the Foundation for Louisiana. The fund provided flexible capital ($25,000 - $50,000) to small businesses with difficulty accessing traditional bank financing or with business models not suitable for external equity investments. ineligible for traditional bank financing. Access to capital was a consistent barrier to launching or growing ventures.
Challenge
How do you deploy community capital in ways that are both mission-aligned AND financially sustainable?
What I Built
- Managed portfolio operations including underwriting process, disbursement, and collections
- Designed tailored repayment plans to accommodate dynamic business needs (for ex: cash flow timing from federal reimbursements) for businesses as ranging from: electrical contractors, home care, food & beverage, and consumer packaged goods.
- Built relationship-based processes that maintained repayment rates while supporting borrowers with technical assistance to navigate challenges
What I Learned
Leading Propeller’s capital access taught me the fundamentals of fund management (credit memos and debt-service coverage ratios) and how investment committees evaluate individual deals relative to an entire portfolio. A critical lesson is that fund design, fund thesis, and capitalization must be aligned for optimal outcomes. For ex: while our team would have loved to offer even lower interest rates, our cost of capital made doing so economically unfeasible.
Additionally, the experience emphasized that capital is a spectrum, with different products needed for entrepreneurs at different stages in their journey. Furthermore, I was exposed to various capital products such as revenue-based financing and credit enhancements such as loan loss reserves.
Media:
Source: https://www.instagram.com/gopropeller/p/CrJKjuYtBpE/