Co-Investor Spotlight: Flexible Capital Fund

Co-investor Spotlight Series 

This month we are featuring Flexible Capital Fund run by Janice St. Onge and based in Vermont. Read on to learn more about the fund and how they invest.

Flexible Capital Fund

Can you share a little bit about why and how your fund was started?

The Flexible Capital Fund, L3C (the Flex Fund) is a for-profit, impact investment fund and Community Development Financial Institution (“CDFI”) with 12 years of impact investing experience.  We are a women-led intermediary that provides risk capital in the form of revenue based financing, debt and equity, to companies in New England’s food system, forestry and climate technology sectors.  These are the companies that align with our mission of “creating healthy food systems, preserving working lands, building resilient communities and addressing climate change through regenerative solutions and equitable workplaces.”  We are the only CDFI in New England with a primary focus on revenue based financing as an alternative to equity investment.  

We launched in 2011 because we recognized that companies in rural areas, like Vermont, Maine & New Hampshire tend to be smaller and work on a less than global scale. These rural companies who are solving big issues like climate change and healthy food systems may need a form of “equity” to fuel growth but need it in lesser amounts and perhaps at lower returns than traditional venture capital requires. The Flex Fund offers financing which balances equity features and returns with the realities of New England’s small business environment.

Does your fund have a specific focus (geography, stage, industry, type of entrepreneur, ect)?

The Flex Fund invests in early and growth stage companies in food systems, forest products and climate technology sectors.  Our geographic reach is primarily Northern New England given that food, forests and clean energy is regional. As a CDFI, we look to invest in underserved and low income communities.  We invest primarily using a revenue-based financing structure (debt that’s repaid based on a percentage of revenue), but can invest equity and convertible debt as well.   

Have you made an investment in a Maine company? What are you most excited about in considering further investment into Maine? 

To date, we’ve made three investments in Maine companies:  TimberHP in Madison, ME; Tootie’s Tempeh in Biddeford, ME and Tanbark Molded Fiber Products in Saco, ME.  We see great opportunity to invest in innovative companies in Maine given the robust collaborations among Maine’s entrepreneurial support organizations (the State, higher education and research, nonprofits and other funding organizations).  There is opportunity in the food systems sector with the New England Feeding New England project promoting entrepreneurial activity in this area.  And, in the forest products sector, we recently signed onto a letter with other investors to support the State of Maine’s application for the Forest Bioproducts Advanced Manufacturing Tech Hub program through the U.S. Economic Development Administration.

Besides your fund parameters, what is the most important thing that you evaluate in your diligence process?

We are a high-touch investor and we look for entrepreneurs (and teams) that are coachable, and have the competencies, vision, and integrity to grow the business in a way that’s in alignment with our mission.  We take the time to get to know an entrepreneur, to see how they do business and what kind of culture they are building for their employees.  While we seek a financial return on our capital, we are lower cost than traditional equity investment, and we look for social and environmental returns as well, such as living wage jobs, employee benefits, environmental stewardship, community support.

If a company feels like they are a fit for the Flexible Capital Fund, L3C, what is the best way to get in touch?

The best way to get in touch is to email me at janice@flexiblecapitalfund.com with a paragraph about your company, who you are, your mission and what kind of capital you are seeking.  We’d rather not see a pitch deck up front, but want to get to know the entrepreneur first and be sure the company and sector fit within our investment parameters.  To learn more about us, visit www.flexiblecapitalfund.com.   

We are also in the process of raising Fund 2.0 to continue to further help entrepreneurs who would not otherwise have access to risk capital go further and faster as they build healthy, local food systems, mitigate climate change and create a more just, equitable, and sustainable economy in New England. We’re happy to chat more about that process with any potential partners.

About Maine Venture Fund

Maine Venture Fund invests in Maine businesses that have the highest potential for growth and impact. For more information, visit maineventurefund.com. 

Inquiries:
Terri Wark
Maine Venture Fund
(207) 305-0006
terri@maineventurefund.com