Deborah Frieze, co-founder of the Boston Impact Initiative is using a unique model, to help address economic inequality through equitable access to capital and opportunity.
The Boston Impact Initiative Fund aims to “create the opportunity for people to own and control their future”: three kinds of groups (social entrepreneurs, street and similar businesses, and ‘established and growing’ companies) receive funds, returns and interest rates depending upon their ability to endure risks, hence flipping the traditional concept of risk and return. In addition to this, the fund welcomes both ‘accredited’ (wealthy) investors and ‘non-accredited’ (ordinary) investors, but treats them differently based on their ability to handle losses and need for income.
The Boston Impact Initiative is also involved in equity investments, restricted to prevent unfair value extraction from entrepreneurs or employees by the investor. The fund has so far raised $10 million, out of which $2 million will be held in loan loss reserves and the rest will be deployed.