STRATEGY

Social Capital

Here's how four socially minded VC firms and banks are breaking from tradition.
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The fund: Underdog Ventures, Island Pond, Vermont
Why it's different: Underdog expects to sell its stake in its investments in seven to eight years instead of the traditional five to seven. If a company wants to change its social mission, it must get Underdog's approval.

The fund: Root Capital, Cambridge, Massachusetts
Why it's different: It's a nonprofit investment fund that can lend up to $750,000. Root Capital lends directly to cooperatives in the developing world, allowing them to use their orders as collateral. It's similar to factoring, but Root charges only 9 percent interest.

The bank: ShoreBank Pacific, Ilwaco, Washington
Why it's different: This community bank, which has $143 million in assets, lends money to green businesses in the Northwest and companies that bring jobs to the region.

The fund: TBL Capital, Sausalito, California
Why it's different: TBL--it stands for "triple bottom line"--has raised $50 million to invest in companies that promise a significant social impact. TBL invested in its first company last October.

Last updated: Feb 1, 2008




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