In this episode, we sit down with Cordell Jax, the CEO and General Partner of Regenerative Capital Group, to explore the innovative business model of his social impact fund. Regenerative Capital Group is on a mission to drive positive change by acquiring existing businesses and working closely with entrepreneurs to create a regenerative impact.
Jax explains that the fund follows an entrepreneurship through acquisition (ETA) approach, which involves acquiring businesses and supporting entrepreneurs in their journey towards social and environmental impact. The fund is sector agnostic and focuses on businesses with earnings between $500,000 and $5 million.
One of the unique aspects of Regenerative Capital Group's model is the financing structure for entrepreneurs. Jax reveals that entrepreneurs acquire businesses with 50% debt financing, 25% seller's note, and 25% equity from the fund. This approach allows for a balanced and sustainable ownership structure.
But it's not just about financing. The fund also provides entrepreneurs with leadership training, capital, and access to a wider ecosystem of investors and advisors. Jax emphasizes the importance of supporting entrepreneurs throughout their journey and helping them navigate the challenges of running a business with a social impact focus.
Why focus on acquiring existing businesses? Jax points out that in Canada alone, 76% of small-medium enterprise owners plan to retire in the next decade, creating a unique succession opportunity. Regenerative Capital Group aims to acquire businesses from retiring owners and steward them towards wider value creation.
The response to Regenerative Capital Group's first cohort has been overwhelming. Jax reveals that they received a staggering 170 applicants for just six positions. This demonstrates the growing interest and demand for business models that prioritize social and environmental impact.
Join us for this insightful conversation with Cordell Jax as we delve into the world of entrepreneurship through acquisition and the transformative potential of regenerative business models.