Investment firm Kapor Capital has been successful by focusing exclusively on narrowing opportunity and outcome gaps for underrepresented African-American and Latinx communities.
The proof of the success is in the numbers as the company recently released its returns report. “Mitch Kapor and Freada Kapor Klein released results for Kapor Capital’s Impact Fund. With a 29.02 percent internal rate of return, the fund beat the 75th percentile benchmarks for Pitchbook (25.96 percent) and Cambridge (26.5 percent) between 2011 and 2017,” Impact Alpha reported.
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Kapor Capital started invested exclusively in impact companies in 2011. Now the fund ranks in the top quartile of all funds of comparable size.
Impact companies, according to Kapor, are “companies committed to closing gaps of access, opportunity, and outcomes for low-income communities and communities of color in the United States.”
Kapor’s portfolio contains more than 100 companies and includes justice startups such as Pigeonly, which is the largest independent prison communication services provider. Also in the portfolio is Promise, an alternative the bail system; grammar and writing skills platform NoRedInk; Affordable Care Act enrollment channel HealthSherpa; urban-core energy-efficiency firm BlocPower, and financial service company LendUp.
What’s unique about many of the companies in Kapor’s portfolio is that 60 percent of them have a woman founder or founder of color.
Kapor Capital itself has a diverse investment team. “More than half of the Kapor team are women and primarily from underrepresented backgrounds. Two of its four partners are African-American; a third of the team are Latinx,” Impact Alpha reported.
“We’ve found that our internal diversity has helped us source underrepresented founders,” the firm wrote in its impact report. That “talent that is more likely to create gap-narrowing companies that will change the lives of many people in the U.S. and beyond.”
Kapor firmly believes in its mission to support impact companies. “We’ve always believed that all companies have some sort of impact in the world—some positive, some negative,” Mitch Kapor, partner at Kapor Capital, told Black Enterprise.“As investors, it’s our responsibility to nurture only those innovations that make our world more fair, just and equitable. After eight years of impact-only investing, we’re proud to share our results and prove our hypothesis.”
