Northwest Community Ventures Fund

Babson Professor Natalie Taylor, Case Director

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2006

Abstract

Michelle Foster was the general partner of Northwest Community Ventures (NVC), a for-profit equity fund with a socially responsible mission. Following its mandate to invest in rural communities in Oregon and Washington State, Michelle's group depended on outreach venues such as luncheons to attract and build trust with rural entrepreneurs who worked far from the world of traditional venture capital. In early 2005, NCV had just over eight years remaining on its ten-year charter, but Michelle was already thinking about how to best position herself for raising a follow-on fund in year three. As with any venture fund, she'd be out looking for investors long before performance results were in on her current effort. Her concern was whether institutional investors could be attracted to the fund’s unique brand of socially responsible venture capital—especially if better returns were available elsewhere, at lower risk. Her primary challenge, however, was Eileen O'Brien, the passionate founder of Grassroots Business Initiatives (GBI), NCV's high-profile, non-profit parent organization. At first, their vastly different business philosophies had been a source of respect, philosophical curiosity and even amusement. Increasingly, though, that relationship had become strained by the pressures that both women were facing in order to satisfy their respective—and highly disparate—goals and obligations.

Location: Portland, Oregon

Age of the entrepreneur: Early 30’s

Key Words: Community development investment funds, subsidiaries, non-profit versus for-profit missions, rural entrepreneurship, fund raising, career management and risks, measuring social returns in an investment portfolio

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Teaching Notes

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