They’re making the transition to entrepreneurship an easy one!
Apis & Heritage Capital Partners (A&H) recently closed their first investment fund at $58.1 million, Essence reports.
This Black-led venture capital firm plans to tackle the racial wealth gap using the same structure as the 100% Employee Stock Ownership Plan (ESOP). A&H looks to acquire profitable, privately-held companies, fill the workforce with workers of color then transition them into a 100% employee-owned business, which is called A&H’s Employee-Led Buy Out (ELBO) transaction. This business model is beneficial to the worker due to the tax advantages, opportunities, and stability it provides. According to A&H, millennial workers at ESOP companies have 33% higher median income from their wages when compared to millennial workers at non-ESOP companies; company sales, employment, and productivity increase by more than 2% per year after implementing an ESOP.
A&H recently announced the final close of its first investment fund at $58.1 million, exceeding their goal of $50 million.
Morehouse graduate and A&H founding partner Todd Leverette stated in a news release, “The whole A&H team is humbled by the outpouring of interest and support from the investment community for our novel approach. We are trying to create a better path for employees, especially workers of color, to gain from their own hard work and innovation while also building great small companies into great bigger companies."
Their investors include The Libra Foundation; Realize Impact; Opus Foundation; Mary Reynolds Babcock Foundation; the Cooperative Assistance Fund; The Ford Foundation; The W. K. Kellogg Foundation; The Skoll Foundation; Gary Community Ventures, The Robert Wood Johnson Foundation, and more.
Phil Reeves, who’s also a Morehouse graduate and A&H founding partner, stated, “Our value-proposition has been well received by business owners. With two transactions under our belt, we have two founders/sellers who are proud of the legacy they are creating for their community and their workers by transitioning their companies into 100% employee-owned businesses through the auspices, capital and guidance of A&H. Since we focus on enterprises that have a large number of low-income workers and workers of color, we know we are going to make capitalism start working for people who have been denied these opportunities for so long. You might say A&H aims to put the “equity” back in private equity.”
We love it! Congratulations, A&H.
Photo: Apis & Heritage Capital Partners