CommunityDevelopmentVentureCapital（三）.docVIP

Community Development Venture Capital: A Double-Bottom Line Approach to Poverty Alleviation Julia Sass Rubin Harvard University and Harvard Business School The community development venture capital (CDVC) industry consists of domestic and international organizations that use the investment tools of venture capital to create jobs, entrepreneurial capacity and wealth that benefit low-income people and distressed communities. CDVC providers make equity and near-equity investments in small businesses with the intention of producing a “double bottom line” of financial and social returns, including livable wage jobs and healthy communities. This paper describes and analyzes the domestic CDVC industry, compares CDVC to other forms of venture capital, and provides an overview of recent CDVC industry trends. Paper originally presented at Changing Financial Markets and Community Development Federal Reserve System research conference, April 4-6, 2001. Available in the conference proceedings, Washington, DC: Federal Reserve System: 121-154.  Credit alone is not the answer. Businesses must have equity capital before they are considered viable candidates for debt financing. Equity acts as a buffer against the vagaries of the marketplace and is a sign of the creditworthiness of a business enterprise. The more opaque the business operations, or the newer the firm, the greater the importance of the equity base. Alan Greenspan, Federal Reserve Conference, March 1999 Access to equity capital is critical for business success, especially for young companies, which lack the cash flows necessary for debt repayment. The creation and growth of such companies is the path to revitalization for many depressed regions and a means to economic opportunity for low-income populations (Eisinger 1988). Fostering such economic revitalization is the goal of the community development venture capital (CDVC) industry, a group of domestic and international organizations that use the tool