Providence-based private equity firm New Majority Capital has held the first close of its private equity micro-buyout fund, NMC Fund I, raising approximately $5m with funding led by the Skoll Foundation.
NMC Fund I focuses on acquiring profitable small businesses owned by the so-called “silver tsunami” with $500,000 to $2m of EBITDA, a range NMC describes on its website as too small for traditional private equity interest but still offering opportunities for improved cashflow.
The fund’s portfolio companies share 10% of annual profits with employees, aiming to transfer full ownership to underrepresented entrepreneurs over a 5-7 year period, according to its website.
In a statement, Liz Diebold, Managing Director at the Skoll Foundation, said: “Truly inclusive entrepreneurship ensures that all individuals have the opportunity to own the businesses in which they work.
“Asset ownership is key to wealth-building opportunities, but it remains systematically out of reach for many workers in the US. NMC is reducing barriers to business ownership with an equity-centered, non-extractive approach that generates impact at multiple levels—from business owners and employees to the communities they serve.”
CEO and managing partner Havell Rodrigues described the fund’s “potential to significantly impact underrepresented entrepreneurs and the employees in their acquired businesses who will benefit from the profit share program”.
