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Nonprofit Impact Fund’s Next Move: A For-Profit Spinoff

Back in 2009, Eva Yazhari co-founded Beyond Capital Fund, a nonprofit impact fund aimed at supporting companies serving bottom-of-the-pyramid customers in emerging markets. But that nonprofit status limited the fund’s ability to expand. With that in mind, last year, she formed a spin-off that’s a for-profit, called Beyond Capital Ventures, also focused on India and Africa. It’s about to make its first investments.

Like the  first fund, the new one invests in companies in which, says Yazahari, “The impact is baked into the business model, with the ability to scale.” It focuses on health care, financial inclusion and agriculture.


Yazhari worked for about five years on Wall Street. But after the financial crisis, she decided do something more meaningful, that tapped into her passion for social justice. She already had deep family ties to Africa; her grandfather had moved his family and opened a health clinic in rural Tanzania in the 1960’s. So in 2009, she co-founded Beyond Capital Fund, with a focus on India and East Arica, specifically Kenya, Rwanda, Uganda and Tanzania. She set it up to be what she calls a nonprofit “evergreen” fund making early-stage investments in startups with a financial and social impact; when profits from investments were returned, they were re-invested into new businesses.

Since then, the fund mas made 14 investments; thus far, there have been three exits of companies in eye care, sanitation and agriculture, with what Yazhari describes as, “strong top quartile venture returns and impact.”

Seed and Series A

Then, in early 2020, right before the pandemic hit, she decided she needed to form a for-profit fund. That’s because, according to Yazhari, the nonprofit model was constraining growth. That is, the original fund was unable to grow beyond “single digit million” in size, with a pilot portfolio of about $1 million. “Philanthropy has limits, donors often have very specific sector or geographic focuses, others are unwilling to get involved with grants below $1 million,” she says. With that in mind, for 19 months, she worked on raising a second fund with the goal of reaching $30 million.

Unlike the first fund, this one will target more broadly defined low-income and under-served markets, emphasizing areas like lack of access to women’s healthcare or creating pathways for smallholder farmers to get their produce from the farm to the market and receive better pricing.  “We’ve seen these areas to be tremendous in terms of the opportunities they present to investors,” says Yazhari.  Investments will be in the same countries as before, except for Tanzania, because, according to Yazhari, government regulations make equity investments more costly and difficult there.  

Another difference: the new fund will include both seed and Series A rounds, so Beyond Capital will be able to follow on with later money. That means larger check sizes—investments were around $50,000 and now will be $250,000 to $700,000 for seed funding and $400,000 to $1.1 million for Series A—and the ability to be a lead investor. The plan is to fund 21 businesses, about 15 in seed stage. About 70% of those will also probably receives Series A funding.  Companies will be sourced from over 100 places, such as accelerators and business plan competitions.

A Stake for Founders

The overall approach is to be collaborative. “It’s not, we’re going to give you money and you have to do what we say,” she says. One important element: Founders will get a portion of a 5% to 10% stake in fund profits when they reach the Series A stage, what Yazhari calls “equitable ventures”.  That’s because the for-profit status will provide a larger pool of capital that can be allocated to founders.

Most important is investing in founders who are what Yazhari calls “conscious leaders,” meaning those focused on the full gamut of stakeholders. “They’re the key ingredient to impact investing,” she says.

First investments will be announced soon. Also, a number of companies from the first fund could receive additional money from the second.

As a potential example, Yazhari cites women’s health startup Kasha, based in Kenya and Rwanda, that provides access to products ranging from contraceptives to soaps and lotion. Kasha also employs local women to sell its products and earn a sustainable livelihood. The nonprofit fund contributed $60,000 in 2018 in a seed round; Kasha has gone on to raise what Yazhari calls a “sizeable” Series A.

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