NM Basic Course for Economic Development

2. 7601 Jefferson NE, Albuquerque, NM 87109
Phone: (505) 264-9845 | Email: dburns@investusfund.com
Website: www.InvestUSfund.com
Financing Opportunities in NM:
Opportunity Funds and Other Investment Solutions
Deborah Burns, Managing Partner of investUS

3. The US financial system
serves Major Markets.
• The concentration of financial firms and professionals in
major markets fuels high competition for investments in
these markets.
• Competition tends to reduce investment returns and
encourages gentrification rather than providing a positive
social impact on local communities.
• All of these factors limit the ability to execute a triple bottom
line investment strategy with a high degree of positive social
impact.
• Smaller US cities and communities with their smaller
transactions represent better value lending and investment
opportunities but they need financial intermediaries and
banking solutions that work in their under-served markets.

4. • Capital market barriers to private
investment in smaller cities and
communities.
• Investment & pension managers seek
efficiency through large deals which
are concentrated in larger cities.
• Minimum equity investment thresholds
of $30-$50 million per deal.
• Minimum Private Equity fund
thresholds of $500 million to $1 billion.
• Typically transactions this size are in
major cities not smaller cities, rural or
tribal US communities.
Why?

5. • The growing divide between the “haves” and “have nots” (per
Ray Dalio, Bridgewater & Associates).
• Driven largely by concentration of investment in major markets
The #1 Threat
To US Economy

6. The Challenge
with Underbanked Communities.
• These investment policies lead to massive private investment
capital disintermediation from smaller cities and communities
through out the US, concentrating investment in major cities.
• Results in lack of investment to meet community needs for
housing, jobs, medical facilities, etc.
• The financial crisis and ensuing capital constraints
dismantled financial intermediaries and qualified workforce in
smaller cities and communities.
• Banks and other financial institutions don’t provide the
standard banking and investment products and services in
smaller cities and communities that exist in major cities.
• Economic growth stagnates due to lack of capital investment.

7. The Need. 52 million Americans (1 in 6) live
in economically distressed communities.

8. The Solution
Specialty Investors & Funds
• Impact Investors
• Philanthropic Investors
• Family Offices
• High Net Worth Investors
• Foundations
• Alternative Lenders
• Structured Institutional Product Providers
• EB-5 Immigrant Investor Program
• Stimulus Funds

9. The Solutions

10. Making Good Change
for yourself and countless others.
• Impact Investors –private equity and debt funds that lend
and make equity investments in projects and businesses that
are catalysts for economic and community development.
Example: Arctaris Impact Investors www.Arctaris.com
• Philanthropic Groups – Many family offices and
philanthropic groups provide 100% funding to 501C3’s and for-
profit organizations that develop programs or projects that fit
their mission.
Example: HEP (focused on Health, Education and Poverty)

11. Catalysts for Communities
• Foundations – grants, loans and equity investments
in local communities or population segments.
 $40 million to indigenous women entrepreneurs
 $15 million Opportunity Fund principal guarantee
 $10 million matching loan to Impact Investor fund
• Family Offices – equity and debt investments
sourced through trusted professionals.
 Lawyers
 CPAs
 Financial Advisors
• High Net Worth Individuals (HNWIs) – invest in
local community projects or businesses.
 Start- up and growth companies

12. Alternative Lenders
• Community Development Financial Institutions (CDFIs)
Private institutions that deliver affordable lending to low-income, low
wealth and other disadvantaged communities and people.
• Non-regulated Lending Firms and Funds
More flexible lending criteria due to lack of regulations and reserve
requirements.
1. Construction and term financing at a higher rates/fees
2. Provide receivables and purchase order financing
3. Bridge financing
• Philanthropic lenders
Willing to lend up to 100% at low rates
1. Require Pledge account or Standby Letters of Credit (SBLC)
2. Mission specific projects (healthcare, education, poverty, etc.)

13. Structured Institutional
Financing Structures
• Credit Tenant Leases combined with development
services for municipalities and investment grade
companies
Example: Sheriff’s academy
• Project Financing based on contractual revenue stream
from an investment grade municipality or company
Example: water and renewable energy projects
• Real Estate Investment Trusts acquire and develop real
estate in specific sectors like retail, multifamily,
commercial, industrial.
Example: Military base – enhanced use leases

14. Opportunity Zone Funds
Incents Taxpayers to invest in Opportunity Zones:
• Began in December 2017 with Federal Legislation
• Created 8,700+ Opportunity Zones
• Over $15 Billion invested to date according to industry sources
but could be far more.
• Could be used to gentrify community rather than benefitting
low-income households.
The key is establishing a triple bottom line strategy.
Financial Return On
Investment
EconomicActivity &
Job Creation
Positive Social Impact
TRIPLE BOTTOM LINE
APPROACH

15. Tax Deferred In. Tax Free Out.
Investor Tax
Benefits
100% DEFERMENT OF
GAIN TAX TILL 2026
*
* The investor’s investment is “stepped up” to the fair market value of the funds’ interests at the 10-year mark,
not the investor’s original capital gain. The tax on the investor’s original capital gain is due as of 12/31/2026.

16. Federal Stimulus Funding
• Trillions of dollars dedicated to stimulus and
infrastructure: Unprecedented amounts of funding available to lay
the foundation for private investment in underserved communities. Smart
communities will apply and deploy to bring in more private investment.
• EDA, HUD, USDA, EPA, SBA trying to find places to deploy
capital: Many communities can benefit from these agencies’ newly
created funding programs to stimulate everything from workforce
development to housing, senior care, business growth and expansion and
to attract new businesses and industries.
• Winners and Losers: Not all communities will get their share of
these important stimulus dollars just like they didn’t prior to the pandemic.
Communities need appropriate resources and planning to get funds.

17. Keys to Success

18. Visionary Leadership
Community Alignment and
Planning
Financial Resources and Partners

19. Visionary Leadership
• Effective Community Leaders Have:
1. Vision
2. Relationships
3. Resources
• Proven Track record of Integrity and
Success
• Commitment to the Community
• Ability to embrace diverse opinions
and community groups
• Willing to commit to long term effort to
change the community

20. Community Planning
• Comprehensive and inclusive development of plan
for economic development of the community.
• Includes community needs and gaps in factors of
production (housing, infrastructure, etc.).
• Provides for consistent messaging about the
opportunities, goals, plans of the community.
• Demonstrates collective commitment to
development.
• Prioritizes time and resource allocation according to
the plan.
• Develops a framework for re-assessment and
adjustment for new developments or opportunities.
• Examples:
• The CELab: www.thecelab.org.
• The NM Basic Course:
https://econdevacademy.com/basic-course/

21. Financial Resources
and Partners
• Dedicated financial team member to
build relationships and knowledge of
various sources of capital.
• Alignment with the goals and plan of the
community.
• Ability to connect with key financial
professionals in each of these sectors.
• Able to bridge the gap between sources
and recipients of capital.
• Partners with expertise, knowledge and
experience in financing projects or
businesses.

22. 7601 Jefferson NE, Albuquerque, NM 87109
Phone: (505) 264-9845 | Email: dburns@investusfund.com
| Website: www.InvestUSfund.com