Exploring Roll-Up Strategies: Merging Profit and Purpose

by a searcher from New York University - Leonard N. Stern School of Business

2 months ago

What are the most effective roll-up strategies for blending nonprofit and for-profit entities, and how can this collaboration create attractive investment opportunities? I'm interested in insights on successful examples, metrics for measuring impact, and potential revenue models that can appeal to impact-focused investors.

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searcher

I prefer to have a mgmt co, that the separate operating companies pay a mgmt fee to. We can then share some services from the mgmt. company and we can structure the fee to benefit each operating company and where it is in its lifecycle. Also, this allows us to structure equity differently in each operating company.

There are of course drawbacks, but this is what has worked best for us. Granted we have not raised much outside capital so I cannot speak to how investors would react.

2 months ago | like reply | 0 likes

professional from University of Houston - C.T. Bauer College of Business

What I have seen, and I don't know the tax benefits of doing so, is you have the For Profit business operate separately. Then there is a foundation established, where the foundation raises money generally and from the for profit business. My guess is that is has to do with being able to raise funds from the general population beyond the corporation itself.

The For Profit Corp would have its own set of ESG metrics and reporting.

2 months ago | like reply | 0 likes

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