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8B Education Investments

Advise on Best Structure for Joint De-Risking Pool of Capital

Summary:

Assist an organization working to connect African students with fair and flexible student loans by advising on the best structure for setting up a joint de-risking pool of capital.

Referred by:

Jurisdiction(s): U.S.
About the Organization: 8B Education Investments is a social impact organization that works to connect African students with fair and flexible student loans for studying abroad.
Legal Entity Type: For-profit
SDG(s): Partnerships to achieve the Goals, Quality Education, Reduced Inequalities
Legal Issue(s):

8B Finance is partnering with another VC-funded DE C Corp (Funding U) to increase the number of students of color in STEM classrooms. They are setting up a joint de-risking pool of capital. The entity will take in low interest loan capital and recoverable grant capital.

8B and Funding U are considering partnering with a non-profit to manage the pool of funds, which would allocate it to them as needed (for a fee). Alternatively, the 8B team would like to understand if a joint impact fund could be managed as an SPV without the presence of a non-profit. If so, what form should this SPV take, and how should it be structured. Ideally, the 8B team would appreciate assistance comparing and contrasting the two approaches (if the second is possible) and understanding any relevant tax implications.

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