Commonwealth
Firm Headquarters: Indianapolis, IN
Date Founded: 2018
Investments to Date: 10-25
This Page was Updated September 2020
Investment Approach
Commonwealth is an early stage venture investing platform offering high quality deal flow to faith-driven investors. Our investor community of ~100 organize around specific market interests: (1) city-level transformation in Indianapolis, Raleigh, and Tampa; or (2) strategic partnerships aimed at growing minority-led businesses in America and enhancing shared prosperity among Israelis and Palestinians in the Holy Land.
Commonwealth is currently raising Fund I to pair “Growth Opportunity” investments alongside “Impact Ventures” combining for ~20% returns while generating social impact to bless the least of these (eg, racial injustice in America, Middle East peace, homelessness).
Commonwealth is a platform strategy helping high net worth Christian investors access high quality deal flow. People often wrestle between investing wisely or giving generously. Commonwealth enables them to do both. Improved communities and ROI is at the heart of everything we do.
Focused Geographic Regions of Investment:
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Is all of your activity in the US?
Some of our activity is in Indiana, North Carolina, Florida, and Texas. The rest is outside the US.
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What countries outside of the US are you active in?
Israel and Rwanda.
Previous or Active Portfolio Companies:
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Loanwell
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Zirtue
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Hometown Ventures
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COhatch
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NeighborHatch
Investment Example:
Jaylon Smith dreamt of being a businessman when he was a little boy in Fort Wayne, Indiana. He was told that he needed to become a professional athlete or an entertainer to escape poverty. Remarkably, Jaylon won the Butkus Award as the best college linebacker at Notre Dame and received a $60+ million contract to play for the Dallas Cowboys.
Now that he’s a Pro Bowl linebacker in the NFL, Jaylon is using his influence to create access for other minority entrepreneurs in an attempt to close the economic and educational gap for black and brown business owners. Key stats: African American businesses combine for 1% of venture capital in America; African American net worth is $17,000 compared to white American net worth of $170,000; and 50% of black businesses closed during the first few months of the coronavirus.
Commonwealth operates the Minority Entrepreneurship Institute under Jaylon’s leadership and we hold an annual pitch competition rotating between Indiana, Texas, and Florida. The winner of the 2020 MEI pitch competition in Dallas wanted to solve the problem many wealth minorities face: the demands of family and friends for loans. Zirtue is a relationship-based social lending app designed as the first mover to formalize the $200B+ informal lending industry in America.
Social Impact with social emphasis on the unbanked: Zirtue is creating a financially inclusive world by mobilizing loans between friends and family. Zirtue empowers users to empower each other through trust-based loan, instead of relying on predatory lenders.
Launched in January 2019 in both app stores – Apple (IOS) and Google (Android) ∝ Over 100k registered users, $7M in loans processed to date ($1M via partners) ∝ 60% month-over-month user growth rate ∝ Partners Include AT&T and Toyota ∝ $1.25M raised to date.
Primary Revenues: $5/month subscription fee for borrowers, 5% service fee per loan for corporate partners
Zirtue is growing users 60% month-over month and has exceeded 100k registered users. The company launched in Jan 2019. The investment will allow Zirtue to launch the Zirtue bank and debit card, expand customer acquisitions through corporate partnerships and paid media acquisition of new lenders, especially. Differentiator: lend, borrow, and bank all in one place, faster.
Commonwealth made a $300K investment to close convertible note round to expand corporate partnerships and launch Zirtue bank and debit card. Terms: Convertible Note of $1.5M at $10M Valuation Cap with 10% Discount. $1.25M raised to date.
Zirtue’s founder, Dennis Cail, was a technologist in the Navy, he ran complex technology systems for IBM, and he founded a boutique M&A firm. He is so committed to MEI’s mission that he wants to mentor rising minority entrepreneurs.
Three of Commonwealth’s portfolio companies were selected for the inaugural Google Start Up Accelerator for Black Founders.
Capital Raise Strategy
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Total Assets Under Management: $1.9M
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Our number of members: 39
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Total Number of Investors: 50
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Average Investment: $500K
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Minimum Amount: $250K
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% of Capital from Top 3 Investors: Less than 25%
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Financial Reporting Frequency to Investors: Quarterly Reports
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Setup to accept charitable capital through the National Christian Foundation or other listing platforms? Yes, Commonwealth is approved by the IRS to use Donor Advised Funds to make Mission Related Investments.
Leadership Team
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Cumulative Leadership Experience in Accredited Investing: 31-50 years
mike humphrey | Board Chair
Mike Humphrey co-founded Tanglewood Investments in 1997, a private equity firm focused on hands-on investing in the global manufacturing industry. Over seventeen years Tanglewood acquired 22 businesses which were assembled into five operating groups. These groups were re-envisioned, restored to profitability, and sold to long-term owners.
In 2013, Humphrey also provided the startup capital to form Socratic Ventures LLC, a seed-stage venture capital firm based in Austin, Texas. Socratic’s mission is focused on creating and building new businesses that reduce the cost and improve access to higher education and vocational credentials (www.socraticventures.com). In the past five years, Socratic has started four unique education businesses that have attracted $40 million of growth capital from strategic and institutional investors.
From 2009 – 2018, Humphrey served as Chair of the Prison Entrepreneurship Program, a nationally recognized program developed to bring faith-infused character and entrepreneurship training to men incarcerated in Texas. In its 14-year history, PEP has graduated over 2,500 men and their recidivism rate has been reduced to 7%. PEP graduates have formed 380 small businesses. Respond-ing to invitations from multiple state Departments of Correction, PEP is now expanding nationally
chuck bentley | board member
Chuck Bentley is the Founder and Executive Director of the Christian Economic Forum where focuses on advancing God’s economic principles through this annual gathering of select marketplace leaders dedicated to improving the world through the advancement of ideas that work. He is also CEO of Crown Financial Ministries. Chuck is the author of four books and he produces a daily radio broadcast heard on over 1,200 outlets in the USA. He also serves on the board of Foundations for Farming, an initiative aimed at bringing transformation to individuals, communities, and nations through sustainable agriculture and faithful stewardship of the land.
cliff benson | board member
Cliff is managing partner of American Homesmith and he works in asset management. He is also president of the Palin Foundation, chair of the National Christian Foundation-Carolinas, and chair of Mission Triangle. He and his father tell their philanthropy story in the book, The Generosity Bet. Cliff played competitive golf throughout his career and he has provided faith-infused mentoring through groups such as Telemachus.
jay hein | managing director
Jay Hein is the president of Sagamore Institute, a think tank he co-founded in 2004 with U.S. Senator Dan Coats. As part of his Sagamore duties, Jay also serves as managing director of an impact investing vehicle called Commonwealth. He is also a fellow at Baylor University’s Institute for the Studies of Religion.
Previously, Jay served as Deputy Assistant to President Bush and Director, White House Office of Faith-Based Initiatives. In this capacity, he advised the President and oversaw the implementation of a “determined attack on need” with staff at a dozen cabinet agencies. He formerly directed Civil Society Programs at Hudson Institute and he served as a welfare policy advisor to then-Wisconsin Governor Tommy Thompson.
Jay is the author of The Quiet Revolution: An Active Faith That Transforms Lives and Communities which was commissioned by Amazon to help launch its new faith-based division. He received an undergraduate degree at Eureka College and an honorary Doctor of Laws from Indiana Wesleyan University.
Spiritual Integration and Impact:
Faith Driven Investing can span a wide range from high yield to concessionary returns that have a higher level of spiritual integration. Having clear expectations of this philosophy is key for the movement. Each investment is unique and you might want to select multiples but if you had to choose one quadrant that best fits your groups spiritual integration and financial performance targets … What would it be?
We chose upper right (high spiritual integration and above market financial returns because our Fund I seeks to prove this nexus is possible. We serve faith-driven investors making high quality impact investments in deals that glorify God and make the world a better place. Our unique blend of alternative market deals combine with impact ventures to produce ~20% returns while bringing solutions to the least of these.
Describe the Spiritual Integration Activities of the Fund:
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Commonwealth’s network of investors formed a learning community to produce and share thought leadership on faith-driven investing.
Is Impact and Spiritual Integration Tracked?
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Yes, we report on spiritual integration on quarterly reports for every investment.
Are you partnered with any other organizations?
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Our board members are engaged both formally and informally with over a dozen faith-driven organizations such as the Christian Economic Forum, Crown, Praxis, NCF, TrustBridge, Gathering, Impact Foundation, Generous Giving, and the Ron Blue Institute.
A lot of Investing Conversations look at Social Impact related to the United Nations Sustainable Development Goals. Is there one of these that most resonates with your organization?
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Much of our portfolio takes aim at reducing poverty. For example, African Americans have an average net worth of $17,000 compared to white American net worth of $170,000—that’s a dime to a dollar. Opposite so many of the UN’s top-down strategies, we believe that the only way to solve African American poverty is economic growth. That’s the key reason we’ve teamed up with Jaylon Smith to invest in minority entrepreneurs.
WHY The FAITH DRIVEN INVESTOR?
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Why are you compelled to be certified and a part of the Faith Driven Investor Group?
This is our tribe. We want to join, learn from, encourage, and enjoy fellowship with others who are seeking to bring God glory while deploying our financial, intellectual, and social capital into businesses that show His love for our neighbors. Bigger picture, we desire a collective impact among Christians to compete with the world’s way of solving problems and advancing the good society.
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Does the leadership align with the Unifying Principles on Faith Driven Investor and agree to the Code of Conduct? Yes.
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Who nominated you to be listed on the FDI site?
We were blessed to join Henry in the early planning stages of FDI and have continued to be in strategic dialogue with the team through their various stages of development.
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AFFILIATIONS- Are you a part of any third party groups, affiliations that you would like to list here?
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None at this time.