ENTREPRENEURS TO INVESTORS AND
SOCIAL ENTERPRISES TO DONORS
The Spark North Texas mission is to pair investors with
entrepreneurs and social enterprises with donors to
be the spark that creates connections and fuels a thriving North Texas economy.
Champion Impact Capital is inviting investors, donors, entrepreneurs and social enterprises to be a part of Spark North Texas, an effort to stimulate the Dallas region’s recovery from the pandemic. We have already received $100,000 and are seeking additional investments.
The Spark North Texas focus on financial innovation promises to scale access to capital for technology-focused projects addressing health, safety, and economic opportunities in the region that may be replicable throughout the country. Texas is one of the fastest-growing states in the United States, and Dallas is the fourth fastest-growing metro area in the country. Comparing Texas startup activity to Silicon Valley, Dallas has significant room for improvement, and Spark North Texas promises to boost our region’s presence.
The Spark North Texas platform is open to applicants and investors including accredited angel networks, corporations, investment firms, family foundations and individuals.
With support from a U.S. Economic Development Association (EDA) SPRINT Challenge grant of $950,000,
Spark North Texas is a platform with a matchmaking algorithm that will connect entrepreneurs and
social enterprises with suggested innovative financing structures, capital and donations and recommend
projects to investors and donors based on the criteria they have included in their profiles.
In addition, investors and donors will have the ability to search the entire database or filter
opportunities based on specified search parameters.
Click on the image to enlarge.
Empowering Impact Investing
Founded in 2011, Champion Impact Capital develops creative, impactful public-private partnerships to sustainably invest in the long-term
social and environmental health of communities. Expertise in municipal finance, real estate and ESG investing has enabled Champion Impact
Capital to develop creative capital structures across a variety of issues and asset classes functioning as project development intermediaries,
asset managers and principal investors.
After a successful career in finance and development, Michelle founded Champion Impact Capital in 2011 to
encourage impact investing in Texas, bringing capital markets dollars to scale solutions for community needs.
Champion has led ideation on projects using various creative financial tools such as social impact bonds, green
bonds, social purpose private equity funds, ESG investments, and social purpose REITs. Michelle founded On the
Road Companies to empower working Americans to have the opportunity to take the best jobs available to them
with dignity and create a prosperity movement that will propel our country and its citizens to achieve their dreams
and live their best lives.
Read more about Michelle’s big ideas in her blog, The Car Lady.
Heather Gilker is the founder and principal of Tokalon Advisors LLC. She is also
the executive director of the North Texas Chapter of the SWAN Impact Network,
an angel network focused solely on making early-stage impact investments.
She brings over 30 years of experience in investing, community involvement, and
strategy with a focus on sustainability to her mission to create a more robust
impact investment ecosystem in DFW and Texas. Through Tokalon Advisors, she focuses
on driving impact and sustainability through facilitating funding for social enterprises,
driving strategic planning and business development for social enterprises, and
providing outsourced services to family offices.
Prior to Tokalon Advisors, Heather led development of the Southwest region for Fidelity Family Office Services, working with family offices and their networks. She has also served as a portfolio manager at a family office, an allocator at two investment firms, an equity analyst, and a commercial banker. She is a graduate of the Cox School of Business at Southern Methodist University, where she currently serves on the advisory board of the Alternative Asset Management Center.
Chris is director of Economic Development for the Irving Economic Development Partnership. He has been engaged
in economic development and government for 20 years helping cities use creative financial incentives to draw
companies to their regions. The Irving Economic Development Partnership will bring representatives from leading
businesses in Irving that have expertise in technological innovation to work with our core team. These businesses
will provide guidance on go-to-market strategies and the viability of the technological approach. They may also
identify entrepreneurs and investors. Chris will serve as the liaison with the businesses in Irving who will assist with
the technology investment screens and commercialization readiness assessments.
Nick is the senior executive responsible for managing the financial actions of
On the Road Companies
including tracking cash flow and financial planning. He has a master’s of Business Administration
from the University of Dallas and a bachelor’s degree in Finance from Texas Tech University.
Prior to joining our team, Nick spent 18 years in consumer banking finance with Citi and US Bank.
Debby is part of the senior leadership team of On the Road Companies
and is responsible for a wide variety of efforts
that promote the organization, including creative solutions, branding strategy,
event planning and media relations. Debby graduated from Texas A&M University with a
bachelor’s degree in Journalism. She has more than 25 years of experience as a
results-driven marketing executive with a passion for building high-profile brands
and developing strategic marketing plans that contribute to the overall success of leading organizations.
Ryan helps guide financial decisions by establishing, monitoring, and enforcing policies and procedures.
A CPA with a master’s of Business Administration from The University of Texas at Arlington and a
bachelor’s of Business Administration from The University of Texas at Austin, Ryan was
previously Director of Accounting for TGI Friday’s and Senior Regional Accounting Manager for Service King.
Bruce (BJ) Cortis
BJ is the founder and principal of Craftsman Technology Group,
the creator of the Spark North Texas portal.
At Craftsman, he leads the management team, sales, and marketing, and supports the continued growth and
development of the firm where needed. BJ founded Craftsman Technology Group in 2015. He has worked in the
Salesforce Partner ecosystem since 2010. Previously he worked with Blackbaud’s professional services division and
as an organizer leading fundraising and field campaigns for nonprofits across the country.
Connecting Investors and Donors to Projects
Investors in Spark North Texas may be accredited angel networks, corporations,
investment firms, family foundations or individuals. The Spark North Texas platform is now open to applicants.
Interested investors can register now by completing the questionnaire through the
link below. The questionnaire enables investors to target specific applications based
on their interests, or they may search all the projects available for funding.
Investors and donors are welcome to encourage entrepreneurs and social enterprises they are currently
working with to apply for additional funding through the Spark North Texas Platform.
To support deal progression and report on outcomes, Champion will have ongoing involvement with
Spark North Texas projects for at least three years. Investors and applicants will commit to
responding to periodic surveys and providing input to outcome assessment.
Connecting Entrepreneurs and Social Enterprises to Funders
The Spark North Texas investment platform has been funded by a U.S. Economic Development Association (EDA) SPRINT Challenge grant of $950,000 that seeks to help North Texas recover from the pandemic through health, safety, or economic solutions. The platform’s matchmaking algorithm will connect both for-profit and nonprofit applicants with funding and recommend projects to investors and donors based on the criteria they have included in their profiles. In addition, investors and donors will have the ability to search the entire database or filter opportunities based on specified search parameters.
While you and/or your business/project do not have to be in North Texas, the proposed solution must positively impact the pandemic recovery of the North Texas region.
The Spark North Texas platform is now open to applicants.
A 1031 Exchange is a type of real estate transaction that enables an investor to swap one
property with another of a similar use while deferring capital gains taxes. It is sometimes known as a “like
An accredited investor is essentially one who has sufficient net worth or income to withstand investing in speculative or risky investments. The SEC defines an accredited investor in the context of a natural person as anyone with earned income of $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the prior two years and reasonable expectation of the same income level in the current year. These individuals or entities can make investments in non-registered transactions because they are presumed to have greater knowledge or financial ability to accept losses.
Angel investors provide backing to small entrepreneurs, often startups, typically in exchange for some ownership interest in the venture. These are often the entrepreneur’s friends or family members but may also include “angel networks.” Angel networks are groups of investors who consider opportunities either individually or in collaboration.
B Corp is shorthand for benefit corporation. These are generally for-profit enterprises that have a social or environmental component to their businesses. Businesses seeking a B Corp label are certified by B Lab, a nonprofit that evaluates and attests to the company’s alignment with the public’s interests.
This is an individual or group of individuals that derive benefit from a business. The term is usually contrasted with clients or customers so that it encompasses a group generally larger than direct program participants, such as a client’s children.
Career Impact Bonds
As with the social impact bonds, career impact bonds are a misnomer—they are not actually bonds but rather a contract. Investors put up money to fund training providers who offer training to vulnerable populations. Once those students have graduated and found meaningful employment, they repay the cost of training to the investors and service providers who share in the funds.
Community Development Financial Institutions (CDFIs)
CDFIs are designated by the United States Treasury as organizations or companies that provide financial services or products to target populations, including low- to moderate-income individuals. Banks who partner with CDFIs earn credit from regulators for their Community Reinvestment Act requirements.
Corporate Social Responsibility Support (CSR)
CSR is a form of corporate policy, procedures, commitments, or investment (or all the above) in support of a company’s values, such as social justice or environmental well-being.
A customer is a purchaser of goods or services or a direct program participant if the goods and services are not “sold.”
“Do No Harm” Philosophy
The idea of “do no harm” borrows from the medical profession but now also applies to impact investing. It means to consider all consequences of an investment to evaluate whether it is beneficial or not. An example might be an investment in electric vehicles, which is perceived to be better for the environment, however the cobalt needed for the batteries is mined by child labor, which is harmful.
Gifts made without requirement of return of funds or interest paid.
Donor-Advised Funds (DAFs)
DAFs provide a way to support causes using flexible capital. Donors receive a tax benefit for contributing to a DAF, and those dollars can then be deployed to achieve the donor’s wishes through many forms of investment—gifts, grants, loans, loan guarantees, etc.
This is a federal government program that enables foreign investors to receive preferential visas in exchange for job-creating investments.
An endowment is a reserve fund set aside by an institution to provide for long-term investment returns or perpetual operating support.
Environmental Social Governance (ESG)
ESG is a subset of impact investing in the focus areas of environmental, social, and corporate governance. Investors may apply these nonfinancial factors as part of their analysis process to identify material risks and growth opportunities. This is a growing area of investment.
Equity Equivalent (EQ2)
An EQ2 investment is a debt vehicle that is functionally equivalent to equity. It has no maturity date or has one that is continuously renewable, a very low interest rate, and is booked on the borrower’s balance sheet as equity not long-term debt.
Expansion Stage or Growth and Expansion Stage
This is the stage in a business lifecycle when it has been in existence for a few years and adds resources that it is confident will add predictable top line revenue gain and long-term value.
Fixed Income Allocation
This is a portion of an investor’s portfolio that comprises investment securities that pay a fixed interest until their maturity date. In a diversified portfolio, this is designed to be lower risk and provide steady recurrent income.
These are cash gifts to an organization, typically a nonprofit, often made by a foundation, that have no repayment requirement. In contrast to an equity investment, they are nondilutive to the recipient. They often have a stated purpose and may be restricted for that use.
Green bonds are a debt vehicle that specifies use of proceeds for environmental purposes. There is a distinct and active market for green bonds, and they often come with specific reporting requirements.
This is typically a social enterprise that combines both for-profit and nonprofit entities to achieve a specific goal.
Impact Investing has many definitions but can be considered as a double-bottom-line (or triple) investment that includes measurable social impact alongside a financial returns, or, in the case of a triple-bottom-line investment, they also include measurable environmental returns. Profit can be thought of as a continuum with zero profit and max profit on each end. Impact investment straddles the space in between.
This term reflects the desired amount of time an investor wishes to remain in an investment before return of capital. Return of capital also known as an exit.
There are multiple types of instruments or tools available to satisfy investors’ requirements. Examples might be debt, equity, or grants.
Liquidity is a financial term that describes how easily an asset can be converted to cash.
Guarantees are a way for investors to provide for the growth of an enterprise without committing cash. One investor might “backstop” another by offering a guarantee in the event of default. This can be a form of “catalytic first loss capital.”
Maturity and Exit Stage
This is the stage of a business life cycle where sales begin to decline, and the owners begin to look at planning for a sale or some other exit.
Mezzanine/Bridge Debt Pre-IPO
Mezzanine financing bridges a gap between debt and equity for pre-public companies.
These are investors who look for opportunities to support businesses that have some preference for their stated mission, not just financial returns.
Mission-related Investment (MRI) Tools
This is an IRS-approved tool for foundations to use to support mission-driven businesses. It has slightly less advantages for the foundation than its sister tool—program-related investments—but is similarly useful for the beneficiary.
When used in an investing context, a multiple is the number of times earnings (EBITDA), or invested capital of a target value. Investor might say, for example, that they are seeking a 10x multiple, which means they want the value of their investment at the exit to be equivalent to 10 times their invested capital. In the context of debt, it may be used to refer to the amount of debt to cash flow or the amount of debt to enterprise value. When not in the context of a specific investor, it will more often be related to earnings.
Investors may be open minded about their investment philosophy with certain traits included or excluded. One example is an investor who excludes “sin stocks,” such as businesses involved with tobacco.
New Market Tax Credits (NMTCs)
NMTCs are useful tools for opportunities with a real estate component and a social mission. These complex structures involve allocations of tax credits from the United States Treasury, purchased by tax credit investors (usually banks), with the project funded by a “leverage lender.” They are only available on properties in qualifying census tracts and run for a period of seven years.
Nonprofits are organizations that have a purely charitable focus. Often, they are designated by the IRS as a 501(c)(3) entity, which means they are exempt from taxation. This status is usually needed to receive grants from foundations.
Outcomes are the specific benefits (or they could be negative outcomes) associated with an impact effort, such as increased purchasing power due to improved credit scores.
Outputs are units of measurement that result from an impact organization, such as the number of meals served by a food bank.
PACE is a program that some municipal, county or state governments have elected to participate in that enables a lender to make a loan for environmentally beneficial improvements or renovations to a property wherein the security for the loan is an assessment on the property, like a tax.
This is a term for nondilutive type of capital investors choose to make available for an impact project. Dollars in their philanthropic buckets are ones they are willing to lose or give away, often referred to as grants. They would be contrasted with dollars in their investment buckets that may have specific return requirements associated with them.
Program-related Investment (PRI) Tools
Similar to MRIs, PRIs (equity, debt, guarantee, grant or other) include various tools that the IRS has approved for foundations to use to support a social enterprise. So long as the intent is charitable and the return paid is less than market, the foundation may use any number of different tools to support the effort, and the dollars do not count against the required distributions or jeopardize the foundation’s tax status.
Public Improvement Districts (PIDs)
PIDs are most often used in real estate development and, like the PACE financing, enable projects to capture up-front funding for certain initiatives. They are repaid through assessments.
Publicly Offered Equity/Stock
These are opportunities offered for investment in the public stock markets. The SEC must approve the issuances. By purchasing stock, the investor obtains equity or ownership in the company and becomes a shareholder.
For investors with a profit motive, return requirements are thresholds they want/need to achieve on their capital. With a debt instrument, these return requirements are essentially the interest they receive on their loan.
SAFE refers to a Simple Agreement for Future Equity, a form of convertible investment that gives an investor the opportunity to convert capital into equity ownership in the company at some point in the future.
Seed money, seed funding or seed capital is the first stage of investment that entails ownership. For many enterprises, seed funding may be made on a convertible basis where dollars come in as debt, for example, but convert to equity at some point in the future.
This is the point in a business life cycle where the entrepreneur begins to develop the potential for an idea to become a viable business.
Senior loans have priority over other unsecured or otherwise more “junior debt” owed by the issuer in payback and are considered the most secure.
Social bonds are bonds offered either publicly or privately that have a stated social purpose. They come with reporting obligations and are not to be confused with social impact bonds, which are not legally traded instruments.
A social enterprise is any endeavor, whether a for-profit company, a nonprofit organization, or a hybrid, that has a social mission attached to it.
Social Impact Bonds
Contrary to the name, social impact bonds are not bonds. They are contracts, rather than a traded security. They include an investor, a governmental entity, a service provider, an intermediary and an evaluator. Investors place money into a project with the objective of achieving some social impact outcome that reduces costs for government—such as housing the homeless, rather than caring for them at a hospital or jail. The government savings provides the funds to repay the investors.
Socially Responsible Business
This is usually a for-profit company, not a nonprofit, that seeks to be responsible in how it uses resources.
This is the earliest stage of a business wherein an idea has not been tested by the market.
Sometimes referred to as sub-debt, subordinated loans are behind senior loans in priority of payment. This is riskier debt capital in the capital stack but ranks higher in priority to equity.
Sustainability may be used in the context of the business lifecycle as representing the time in which breakeven has occurred and there is recurring cash flow that is sufficient to cover costs. It is also often used in an environmental context referring to efforts to protect natural resources.
When an issuance includes both social and green bonds, it is an offering of sustainability bonds.
With sustainability-linked bonds, the return to the bondholders is kept at a lower than market rate so long as the issuer continues to meet stated sustainability objectives. The cost of the bond increases if these hurdles are not met.
These bonds are subject to taxation and have a specific market of buyers.
These bonds are exempt from taxation and have a specific market of buyers.
Tax Increment Financing (TIF) or Tax Increment Reinvestment Zone (TIRZ)
TIFs and TIRZs are geofenced locations with incentives offered by the municipality in which they are located to persuade developers to construct the types of facilities the city seeks to have in that location. The incentives are taken from the incremental gain in tax revenue that occurs within that district or zone as improvements are made.
Theory of Change
A theory of change model depicts a desired future state (all people will be free of poverty, for example) and maps backwards the steps needed to reach that objective from the current state. It is usually a visual depiction of the inputs and processes required to achieve the desired outcomes and impact.
A traditional business is a company that seeks to maximize shareholder returns.
A traditional charity is a nonprofit entity.
Venture capital is a form of investment that is usually made to early-stage companies that have potential for significant growth. Venture capital funds take an ownership stake in the business in exchange for funds and often play a role in advising or even managing the company to steer it toward growth.
Venture funds manage pooled investments in high-growth opportunities in startups and other early stage firms and are typically only open to accredited investors. Venture funds may be comprised of individual venture capital funds or may be a “fund of funds,” which aggregates capital from multiple venture capital funds.
Is there a charge to use the Spark North Texas portal?
No, not at this time.
How is Spark North Texas monetized?
Spark will make no money on the implementation and use of this matching system and was funded by a grant from the U.S Economic Development Association.
Why did Champion Impact Capital create Spark North Texas?
Champion’s mission is to use finance in a positive and creative way to solve challenges in our communities. We created Spark North Texas to stimulate the region’s recovery from the pandemic by connecting applicants to capitalization resources.
Is some or all of the government grant used to fund investments?
No grant dollars are used for investment capital.
What type of potential investors will be looking at appliants data?
Only accredited investors will be allowed to use the system. Several angel networks will be among the investors looking at potential investments including SWAN Impact Network, North Texas Angel Network, Ambassadors Impact Network, Capital Factory family offices and others.
Click on a question below for its answer.
Why should I apply?
In addition to potential funding, applicants will have the opportunity to learn about various resources such as incubators and accelerator programs including The DEC, Mass Challenge, Impact Ventures and Capital Factory among others.
What types of projects will be funded?
Projects are limited to those that help the North Texas region recover from the pandemic with a technological solution focusing on health, safety or the environment.
What documents and supporting items will I need to submit?