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FOR IMMEDIATE RELEASE -- October 20, 2005
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Community
Development Venture Capital Pays Off
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NEW YORK--Oct. 20,
2005--CDVCA (www.cdvca.org), the network
for the rapidly-growing community development venture capital (CDVC) industry,
is pleased to announce several recent successes in its field. Three prominent
CDVC funds, Coastal Ventures II, Pacific Community Ventures, and SJF Ventures,
have realized significant financial returns through the sale of privately-held
companies. CDVC funds provide equity capital to businesses in underinvested
markets, seeking market-rate financial returns, as well as the creation
of good jobs, wealth, and entrepreneurial capacity.
"We are thrilled about these early successes in our industry," said CDVCA President Kerwin Tesdell. "These premium exits confirm what many CDVC investors have been saying for years: mission-driven venture capital investments can create important social impacts, while providing a handsome financial return."
Coastal Ventures II, LLC, a fund managed by CEI Ventures, Inc.,
a leading CDVC firm, exited its investment in Portland, Maine-based Recruiternet
Inc., a provider of corporate applicant tracking and talent management
software solutions. Founded in 1999, Recruiternet received an equity investment
from Coastal Ventures II in June 2001. In September the fund exited with
a better than 7X return, and the potential for significant additional upside
from a two-year earn out. During the past four years over 30 jobs were created,
offering inclusive stock options that provided between $10,000 and $200,000
to many employees. No jobs are being eliminated as a result of the acquisition,
and further employment growth is expected in coming years.
"We are delighted that just four years after making one of the first investments in our second fund, our investors are already realizing significant returns," said CEI Ventures Partner Mark Kaplan. "And we're pleased to have supported the growth of a global company creating good employment opportunities here in Portland, Maine."
Pacific Community Ventures (PCV), another top CDVC fund, recently
had a dual financial and social success of its own when it sold Timbuk2
Designs Inc. to a private equity investment group. Timbuk2, maker of
built-to-order messenger bags, laptop bags, and other urban-themed totes
and accessories, is an icon in its industry recognized internationally for
its classic messenger bag. The sale of Timbuk2 provided a greater than 4X
return for Pacific Community Ventures in under three years. And due to a
special set-aside negotiated by PCV at the time of investment, Timbuk2's
employees will share in the buyout proceeds, with over $1 million being
distributed to the company's 40 non-management employees.
"The Timbuk2 sale is a double-bottom line home run," said Eduardo Rallo, Managing Director at PCV and Timbuk2 Board Member. "PCV's investors are receiving a well above-market return on their investment. Equally important, Timbuk2's lower-income workers are able to share in the financial upside of the value they have helped create."
Noted CDVC fund SJF Ventures also had a winning exit recently when
it sold its stake in HDS Cosmetics Lab, Inc., maker of the Doctor's
Dermatologic Formula (DDF) line of premium skincare products. The company
provides skin care products designed to treat aging, acne, sensitive skin,
hyperpigmentation and environmental/sun damage. HDS grew its sales by 60
percent in 2002 and 50 percent in 2003, and SJF Ventures exited its investment
in less than three years with a 70 percent internal rate of return. HDS
has hired approximately 100 workers in the last two years, providing strong
manufacturing job creation in a low-to-moderate income area of Yonkers,
New York.
"VCs only get paid when they cash out. Therefore we are always looking to invest in quality companies that want to get to scale rapidly and can offer us a premium exit," said Dan Hoversten, SJF Ventures Managing Director.
About CDVCA
The Community Development Venture Capital Alliance (CDVCA) is the network for the rapidly growing community development venture capital (CDVC) industry. CDVCA supports and promotes the CDVC industry through advocacy, investment, research, consulting, and communications. From 55 funds managing $400 million in capital in 2000, the industry has grown to 82 funds managing $870 million in capital at the end of 2004. In 2003, 80 percent of capital commitments to CDVC funds came from banks and non-depository financial institutions (insurance companies and pension funds).
About Coastal Ventures II, LLC
Portland, Maine-based Coastal Ventures II, LLC is a venture capital fund managed by CEI Ventures, Inc. CEI Ventures was founded in 1994 to mobilize private capital markets while advancing social goals. CEI Ventures manages two venture capital funds with total commitments of $25.54 million. These funds make equity investments in companies exhibiting the potential to grow profitably and provide attractive financial returns. Through these investments, CEI Ventures seeks to create quality employment opportunities, to promote progressive management practices, to support socially beneficial products and services, and to enrich distressed communities.
About Pacific Community Ventures
San Francisco, California-based Pacific Community Ventures (formerly Silicon Valley Community Ventures) opened its doors in 1999 to develop and invest in businesses providing economic gains to low-income communities in California. PCV helps companies in traditionally overlooked areas to gain access to capital, business advice, and critical business resources that will accelerate company growth. Currently, PCV targets existing businesses throughout California, but has a particular focus on the Bay Area and Los Angeles.
About SJF Ventures
SJF Ventures is a venture capital fund that invests in and assists high growth companies with successful environmental and workforce strategies. SJF has $30 million under management and a portfolio of sixteen companies in the cleantech, technology-enabled business services, and natural consumer products industries. SJF has offices in Durham, NC and Philadelphia, PA and invests in expanding companies throughout the Eastern U.S. with sales of $1MM to $20MM.
Contact:
Kerwin Tesdell
President, CDVCA
(212) 594-6747 x18
Mark Kaplan
Partner, CEI Ventures
(207) 772-5356 x110
Eduardo Rallo
Managing Director, Pacific Community Ventures
(415) 442-4300
Dan Hoversten
Managing Director, SJF Ventures
(215) 545-1750
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