Jeremy Mindich and Sarah Williams are co-founders of Propel Capital. Credit: Jeremy Mindich/Sarah Williams
In 2008, Jeremy Mindich and Sarah Williams co-founded Propel Capital, a philanthropic and impact investment fund. Root Capital was among the fund’s earliest investments–and their funding not only catalyzed more than a decade of impact but has been a model for innovation in social investing.
The Challenge
Maximizing the social impact of capital is no easy feat, especially when working in environments that mainstream finance deems challenging and risky. So, how has Propel Capital managed to make the most of the capital they deploy?
“We look for projects that are creative in their use of capital, solving a key problem of poverty or inequality, and that are able to scale,” said Jeremy. “We deploy a large percentage of our capital in grants every year and 100% of the remainder is invested in high-impact projects.”
“We’re also flexible and we can move quickly, providing capital in the way that’s most capable of being leveraged for the organizations we’re supporting,” adds Sarah. “Since we’re willing to take considerable risk, we can create opportunities for larger investors to come on board behind us.”
Coffee cherries grow in Costa Rica. Credit: Root Capital
Our Collaboration
Jeremy and Sarah became partners with Root Capital in 2008. They were attracted by our simple solution to a huge financing gap: providing fair banking for agricultural enterprises.
While microfinancing was getting a lot of attention at the time, it was clear more needed to be done. “We felt that Root Capital could have a profound impact on rural poverty,” says Sarah. “If farmers have enough income to get beyond mere subsistence, that has the potential to accomplish so many things at once: keeping families from going hungry, helping communities have more resources, ensuring that families can stay in rural areas and farm in a way that preserves their well-being and is good for the environment. It checks a lot of boxes! As a funder, that was pretty powerful.”
Over the next decade, Propel Capital provided more than $10M of critical funds to support Root Capital’s innovative blended finance model. Jeremy also chaired the Board of Directors for a period to further maximize impact.
The Impact
The partnership with Propel Capital allowed Root Capital to grow our loans portfolio throughout the 2010s.
“As a member of the board, I was so impressed by the organization’s ability to navigate turbulent markets, balancing risk management with a mission to support their clients even in tough times,” says Jeremy.
“Over the years, we steadily grew both our grant and investment capital, always looking for where we thought our capital would have the greatest impact,” concludes Sarah. “We provided seed grant funding for Root Capital’s Innovation Fund to help them experiment with higher risk products, and [offered] long-term subordinated debt, to provide flexible capital so Root Capital could stay focused on its mission.”
In 2016, Propel Capital provided a 10-year subordinated debt commitment which was instrumental in attracting a pool of like-minded investors. It was an innovative commitment with unique terms, allowing for conversion into equity upon achieving specific operating milestones. By 2021, it had fully transitioned into unrestricted net assets, a critical form of capital for Root Capital. This flexibility was vital in fostering our growth and enhancing our internal fundraising capabilities, enabling us to reach an increasing number of farming communities for many years.