talanton Advisor and Impact Fund, LLC

Firm Headquarters: Philadelphia, PA

Date Founded: January 2019

www.TalantonLLC.com

This Page was Updated January 2020

Investment Approach

INVESTMENT THESIS

The Talanton Impact Fund serves faith-driven investors who understand the power of high-growth, mid-sized businesses to create good jobs for underserved populations while providing viable, growing markets to thousands of suppliers and adjacent businesses. These businesses have the power to transform lives and communities. 600 million new jobs are needed by 2030 to alleviate human suffering. 80% of those jobs will need to come from small-to-medium sized enterprises (SMEs). 

The Talanton Impact Fund has a distinctive focus—to generate a significant number of new jobs for underserved populations by investing in high growth, well run businesses ranging in size from $500,000 to $5 million in sales. This underserved segment is commonly called the “Missing Middle”. Why? Because these mid-sized companies need capital to grow yet are generally too small for traditional private equity funds, underserved by micro-finance and traditional banks, and unreachable by nascent local capital markets. 

INVESTMENT OVERVIEW

The Talanton Impact Fund is an “Evergreen Fund”, which means there are ongoing opportunities to invest in high growth, high impact businesses. Talanton focused on post-revenue (>$500K in Sales) businesses with near-term positive EBITDA prospects. We offer competitive loans, generally in a senior position, with small equity positions in select circumstances.

Investments to Date: Under 10

Focused Geographic Regions of Investment: 

• The less developed, high growth regions of the world, starting in East Africa where the Partnership group has deep on-the-ground networks and trusted partners. As Talanton goes to scale, select countries in SE Asia and Central America will come into play.

Focused Industries of Investment:

• Agriculture

• Manufacturing

• Energy

• Construction/Engineering

• Consumer Retail

• Banking and Finance

Investment Examples:

Long Miles Coffee:

Founded in 2013, Long Miles Coffee processes and exports specialty coffee from Burundi to craft roasters around the world and aims to lift people out of poverty in a market-driven context. LMC sources from smallholder coffee farmers, paying them above-market prices. Their niche in specialty coffee commands prices of $4.50-$6.00 per pound, compared to commercial grade coffee of $0.90/pound. Of LMC’s multiple social impact initiatives, the most important is its Scouts Program, in which scouts are trained to educate farmers on best coffee-growing practices, leading to significantly higher yields.

# of Farmers: 5,480
Permanent Jobs Created: 55
Seasonal Jobs Created: 300-400 per harvest season
Communities Impacted: 38
Increased yields: 3-4x coffee cherry quantities via Scouts program Higher income: pays 20% premium over government mandated prices, totaling over $251,000
Education: 4,646 children sponsored for schools through Summer Coffee Camp
Environmental: 35,000 trees planted in reforestation project

Educor:

Founded in 2010, Educor’s vision is to provide a holistic educational experience that will nurture, educate, and inspire greatness in early learners. It currently operates five Early Childhood Education schools: one elementary school, three preschools and a corporate daycare. Prisca has identified the great demand and need in lower-middle class communities in particular for high quality, Christian- values-driven preschools. In one such community, Kiambu, she will start the development of a flagship campus with Talanton’s investment.

# of Students: 200
# of Special Needs Students: 12 (2018)
Jobs Created (Teachers & Staff): 60+
Expected Impact w/Campus #6: 570 students by 2023, 100 learning support students by 2022

Educor’s indirect impact on job creation and quality of life for lower-middle income families is tremendous. There are 2,365 early childhood (age 0-11 years) schools in Kenya and around 9 million children under the age of 14. Less than 12% of children in Sub- Saharan Africa have access to early childhood education services. Significant research has shown that children who receive a preschool educational start are more likely to be productive adults, including 1) are more likely to be employed, 2) have significantly higher median annual earnings, and 3) are more likely to have a savings account and own a house.

Company Differentiator:

The quality and deep experience of the Fund Managers/Partners is a key differentiator. Together we have well over 100 years of experience working with and investing in developing world entrepreneurs and taking businesses to scale. In addition, we have partnership agreements with five Christian organizations that specialize in mentoring and discipling business leaders. These five organizations have quality talent on the ground, which also helps to feed our investment pipeline.

PREVIOUS OR ACTIVE PORTFOLIO COMPANIES INCLUDE:

• Long Miles Coffee – A $2.2M sales specialty grade coffee sourcing, processing and exporting business based in Burundi and expanding into Uganda and Kenya. Long Miles has helped over 5000 smallholder farmers triple their yields and quadruple their coffee prices. 

• Educor – A $1.1M in sales early-childhood education business in Nairobi, Kenya. Educor serves over 250 students with a Christ-centered, leadership development focused curriculum. Educor employs teachers, administrators, music teachers, swim teachers, mechanics, landscapers and other service providers. Talanton is funding the development of schools #5 and #6. 

  Talanton expects to close on 6-8 additional investments in 2020. Average investment size per business: $1-$2 million, starting with an initial tranche of $300-$500K. Many of these prospective businesses are progressing through our rigorous due diligence process.

Capital Raise Strategy

Total Assets Under Management:  $2.5M (after one-year of a capital raise)

% of Capital from Top 3 Investors: 25%

Financial Reporting Frequency to Investors: Quarterly (with monthly investor newsletters)

Average Investment: N/A

Minimum Amount: For investors in the fund, the minimum investment amount is $25K if through a Donor-Advised Foundation and $100K if the investment is purely commercial (no upfront tax benefit taken) or from a family foundation. Talanton is turn-key for Program Related Investments.

Setup to accept charitable capital through the National Christian Foundation or other listing platforms? Talanton is approved for impact investments through the Impact Foundation and the New Horizons Foundation (a donor-advised foundation). It is not difficult to invest in Talanton from any donor-advised foundation (such as NCF) through one of our two partner DAFs.

David simms | Managing partner & founder

In the spring of 1984 David and his wife Kim were standing in a farm field in Guatemala, where he understood for the first time the power of business to accelerate the Great Commandment to love God and love our neighbor. He has been privileged to spend significant time of his life using sustainable, finance-driven solutions to bring hope, create jobs and transform lives for people living in poverty, principally in the developing world.

David has served as president of Opportunity U.S and Chaired the Opportunity Global board during a time when we had some ten million clients. He was a founding chair of MicroEnsure, a Bridgespan Partner, S.E.V.P. at MBNA, CEO of the Red Cross Washington/Baltimore Region, and a White House Fellow. David started his career at Bain & Co.

David and Kim live in the U.S. and have two wonderful adult sons. They enjoy sailing, touring historic sites, involvement with both their local church and C12 and serving throughout the developing world. David graduated summa cum laude and Phi Beta Kappa from Penn/Wharton and has a joint J.D. and MBA with distinction from Harvard.

Harry turner | partner

Harry has a 25 year career leading cross-cultural teams primarily in Asia and Sub-Saharan Africa delivering large scale programs in the finance industry. Harry has led global teams for large commercial firms (Macquarie Bank and Anderson Consulting) and for global social impact organisations (Opportunity International and Oikocredit).

He is personally involved in several startup social enterprises in the UK, is on the board of a $50M microfinance investment Fund (Dia Vikas Capital India) and is excited about the impact of bringing significant capital into SMEs in Sub Saharan Africa, Asia and beyond. He spends his free time with his wife and three teenage children, enjoys listening to and playing good music and loves sport of all kinds – still managing to play cricket on a regular basis.

Harry has an MBA (with distinction) from the University of Oxford and a BSc in Computer Science (honors 1st class) from the University of NSW, Australia.

Jon halverson | Partner

Jon has 25 years of experience in international business leadership, investment, development and strategy consulting with two of world’s leading food and agriculture multinationals, Cargill and Land O’Lakes, where he served as a Vice President. He has lived and worked on three continents, most notably in Tanzania where he led a talented team in executing over 50 loans to SMEs across East and West Africa. Jon witnessed firsthand the transformational impact of a thriving business achieving scale in challenging contexts. His areas of passionate interest outside of impact investing are mountain climbing, canoeing and skiing, both alpine and skinny skis!

Jon has a BA from Wheaton College and an MBA – International Business from Regis University.

Mark king | Partner

Mark has a lifelong career financing entrepreneurship, in the developing world through microfinance and then in the venture capital industry. Mark led investing teams for large firms, such as GE Capital and Ares, and venture debt funds. Talanton’s work allows Mark to draw on this varied experience in pursuit of ending global poverty.

He’s a deeply rooted in Chicago, its pizza, Blues, and sports. When not trying to feed or clean-up after his three teenage sons, Mark and his wife of 25 years enjoy spending time in Wisconsin’s Door County.

Team and CULTURE

While not complete, one of the things investors have found helpful in the past is seeing how employees, customers have reviewed someone online. As of the date of completing this out …

• Glass Door Rating: Not available

• Facebook Review Rating: Not available

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?

Talanton offers an 8% target return net of fees and costs with a high level of spiritual integration. We evaluate the spiritual growth and ethical core of the leadership teams, as a result of discipleship and redemptive relationships with diverse stakeholders.

Describe the Spiritual Integration Activities of the Fund:

• We have a conviction to follow Jesus Christ’s call to love and serve those living in poverty. The Fund seeks to demonstrate a distinctively Christian approach—including a firm belief in the power of prayer— while remaining fully grounded in sound business principles.

• Each person on this team is motivated by their faith and has shown a life-long commitment to sustainable business development in challenging contexts, whether large or small.

Is Impact and Spiritual Integration Tracked?

• Yes. At Talanton, evaluation addresses three domains: financial, social, and spiritual. We look for a “return on investment” in these areas.

• To asses impact, Talanton has developed 15 metrics that it gathers from each firm. These universal measures are aggregable and supplemented with narratives of impact that are unique to each firm.

Are you partnered with any other organizations?

• The Navigators (informal partnership, but very active)

• Agora Enterprises

• Sinapis

• Development Associates International (Colorado Springs)

• Partners Worldwide

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?

• N/A

If you’re wildly successful how will the world be different?

WHY The FAITH DRIVEN INVESTOR?

• Why are you compelled to be certified and a part of the Faith Driven Investor Group? At the very core of Talanton’s mission is a desire to transform lives, both spiritually and socially. We hope to connect with like-minded, values-driven investors who care immensely about leveraging their resources or “talents” for redemptive impact through scaling-up Christian-led high impact businesses.

• Does the leadership align with the Unifying Principles on Faith Driven Investor and agree to the Code of Conduct? Yes

• Who nominated you to be listed on the FDI site? Justin Forman, Faith Driven Investor and Kenneth Ewell, Love Thy Neighbor Too

AFFILIATIONS- Are you a part of any third party groups, that you would like to list here?

• N/A

Learn More

• Key Contact Name: Jon Halverson

• Phone: +1 952 905 9518

• Email: jon@talantonllc.com

• Mailing Address: 11 Old Forest Road, Newtown Square, PA 19073 ???

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