The Community Development Venture Capital Alliance (CDVCA) is a nonprofit association of venture capital funds that invest in businesses in underserved communities. Despite not explicitly stating it, the CDVCA acts as a financial expert for its clients by providing resources, support, and advice to help their clients succeed.
How does the advisor help clients – Key Takeaways:
Through its network of member funds, the CDVCA helps clients by connecting them with capital, technical assistance, and business support services. These resources help businesses grow, create jobs, and revitalize underserved communities. The association also serves as a platform for sharing best practices, facilitating partnerships, and advocating for policies that promote inclusive economic growth.
Facts and Insights:
The CDVCA was founded in 1993 and has since grown to include over 100 member funds across the United States. These funds collectively manage over $4 billion in assets and have invested in over 4,000 businesses. According to the association’s annual report, these businesses have created over 40,000 jobs and generated over $6 billion in revenues for underserved communities.
Assets Under Management, Number of Advisors and Time in Business:
| Assets Under Management | Number of Advisors | Time in Business | |
|---|---|---|---|
| CDVCA | $4 billion | 100+ | Since 1993 |
Financial Services Offered
The CDVCA and its member funds offer a range of financial services to address the unique needs of businesses in underserved communities. These services include equity investments, debt financing, and technical assistance to help businesses improve their operations and financial performance. The association also facilitates connections to larger sources of capital for businesses that are ready to scale up.
Client Types
The CDVCA focuses on serving two main client types: businesses in underserved communities and investors looking to make a positive social impact. The association’s member funds primarily invest in businesses in low-income and minority communities, including businesses owned by women and people of color. They also prioritize investments that have potential for high growth and positive community impact.
Fees & Compensation
The CDVCA is a nonprofit organization and does not charge fees to its client businesses. However, member funds may have their own fee structures, which can include management fees and carried interest on successful investments. These fees and compensation structures vary depending on the individual fund’s investment strategy and structure.
Background
The CDVCA was founded by John H. Ehrenfeld, who previously worked for the Ford Foundation and saw the need for venture capital to support businesses in underserved communities. The association grew in response to the rising demand for investment capital and business support services in these communities. Today, the CDVCA continues to be a leading advocate for economic inclusivity and strives to make capital more accessible to all.
Financial Advisor Disclosures to Know
The CDVCA and its member funds operate with transparency and follow all legal and regulatory requirements for financial advisors. This includes providing full disclosures of potential conflicts of interest, fees and compensation, and investment risks. It is recommended for potential clients to thoroughly review and understand these disclosures before entering into any agreements with the CDVCA or its member funds.