CEI Ventures launched its fifth fund this month, raising $14.85 million from 32 accredited investors.
The fund, dubbed the Good Jobs Fund, will focus on social-impact companies in Maine and elsewhere that offer employees fair wages and good working conditions.
The 32 investors in the Good Jobs Fund include nine individuals, two foundations, four community economic development entities and 17 banks motivated, in part, by Community Reinvestment Act credit.
To date, CEI Ventures has raised over $60 million and invested in 64 companies across five funds.
CEI Venture’s four previous funds have boasted profitable returns to investors, according to Nat Henshaw, managing director of CEI Ventures. In addition to profits, the 64 companies in CEI Venture’s portfolio have generated a total of 2,700 jobs, growing their employee count by 40% since receiving funding.
The organization’s last fund was raised in 2015 and is half way through its 10 year life-cycle, according to Henshaw.
“We have chosen all the companies for our fourth fund,” Henshaw said. “But have reserved capital in order to continue to support companies already in the portfolio.”
Two major successes of the 2015 fund are the acquisition in 2019 of Westbrook-based Pika Energy and the success of Portland-based Tilson Technologies. Tilson has grown revenue by 12 times since CEI’s initial investment and has close to 600 employees operating nationally, according to Henshaw.
“Both Pika and Tilson are excellent examples of the types of companies we will be focused on with our new Good Jobs Fund,” said Henshaw.
Henshaw said there’s a positive correlation between good job metrics and financial performance. According to Henshaw, revenue growth for CEI portfolio companies that met their good jobs metrics grew revenue by 47% from 2018 to 2019, while those companies that didn’t meet the standards only showed 5% revenue growth. That is why CEI Ventures will invest the Good Jobs Fund based on three criteria: wages, quality benefits, and a fair and engaging workplace.
“We look at things like, entry-level wages, paid time off, health insurance, retirement, best practice HR policies, and whether or not the company has a profit sharing plan such as employee stock options,” Henshaw said.
Henshaw admitted 2020 was a challenging year, but said he is optimistic about what 2021 will bring.
“If the first quarter is any roadmap for the balance of 2021, I think we will have a very strong year of venture financing,” says Henshaw. “Low rates, economic stimulus and overall liquidity seem to be translating into high valuations. It’s looking like a good year for growing tech companies to raise capital.”
