October 27, 2021
Raven Indigenous Capital Partners is one of the first, if not the first, Indigenous-led venture capital firms in North America. Fresh off the final closing of its $25 million initial fund, the firm is now looking to write $250,000 to $2 million cheques into purpose-driven Indigenous-led enterprises.
In a conversation with BetaKit, Paul Lacerte and Jeffrey Cyr, both Managing Partners at the firm, explained what it means to provide capital for the Indigenous entrepreneurship community and how they assess investments for both Indigenous community impact and financial sustainability.
“One of the realities of the Indigenous investment ecosystem is that it’s a thinly populated space,” said Cyr.
Raven hopes to address multiple issues with its “patient capital” and impact-first approach to venture capital investing. Cyr said the Raven team organized the fund around transformational impact, with flexible VC structures that create cultural safety for Indigenous entrepreneurs alongside competitive returns for investors.
“There’s a fair amount of loans and debt-based capital that’s available,” said Cyr. “But it’s our belief that in the innovation space you need a different type of capital.”
Lacerte added that firms like Raven providing equity capital versus debt is crucial to economic reconciliation in Canada because equity capital “really allows the entrepreneur to put the capital to work” versus needing to immediately extract cash to pay back debt with interest.
When it comes to selecting investments, Raven assesses the potential Indigenous Peoples impact that an enterprise could have before starting commercial, legal, and financial due diligence.
In particular, the fund looks at seven criteria to assess how enterprises can:
- Build vibrant Indigenous communities.
- Empower Indigenous women.
- Create jobs for Indigenous people.
- Support social justice for Indigenous people.
- Protect Indigenous worldviews within organizations.
- Create solutions for challenges in Indigenous communities.
- Breathe new life into Indigenous communities across Canada.
Once an organization proves they are capable of delivering targeted impact across these criteria, the fund will start talking about business models and investment terms.