Interview with James Wahls; Founder & Managing Director of Revolve Fund

Jen: How was “Revolve Fund” Created? 

James: Revolve Fund was created after years of experience of creating and investing in strategies focused on equitable access to capital throughout the U.S. I identified certain capital infrastructure gaps through this work that hinder capital absorption and leverage by entrepreneurs, especially entrepreneurs of color. Using this experience, I set out to design a flexible capital tool that aims to address systemic barriers to accessing capital that disproportionately affects marginalized entrepreneurs but also concurrently honors the entrepreneurs’ efforts.  

Jen: How are your investment funds catalytic in a way that is different from other funds?

James: Revolve offers a recoverable grant strategy creatively designed to avoid placing more liability on grantees. Capital received from Revolve can be considered a restricted asset on grantee’s balance sheet resulting in minimal financial harm for those unable to repay the grant and a more solid financial position. The recoverable grant is coupled with customized underwriting and technical assistance throughout the life of the grant

Jen: How do you describe the kind of non-financial returns the fund offers?

James: Revolve Fund provides our grantee partners greater access to financial capital, social capital as they navigate institutional funding spaces, and national recognition. For our funders, we provide key learnings about the communities they are investing in and regenerative outcomes.

Jen: Can you describe how you use integrated capital to do your work?

James: Revolve is often catalyzing or supporting an integrated capital strategy for its grantee partners. Revolve aggregates traditional philanthropic capital and leverages its knowledge of current impact investment strategies, including debt and equity financing to deploy its recoverable grants in a manner to foster integrated capital investments. 

Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?

James: Revolve’s purpose is to advance racial and income justice. It eliminates or reduces the barriers of capital equity requirements, addresses the lower availability of friends and family funding, and provides essential industry knowledge to access future capital. Revolve’s catalytic capital supports opportunity without disproportionately harsh consequences that can come from early-stage investments, including cash draining merchant advance terms and limited access to other forms of capital due to early accrued debt.

Jen: Can you share with us an example of an investment? 

James: Rochdale Capital is an emerging nonprofit community development loan fund that provides financing and technical assistance to cooperative enterprises, small businesses and community-based organizations nationwide. Revolve Fund provided some of Rochdale’s first operating capital to deploy a multi-million dollar contribution from its founding and strategic partner, the National Cooperative Bank. 

Jen: What do you tell people who think your fund is risky?

James: Because Revolve only accepts philanthropic grant funding, we do not get this question often. However, I often remind impact investors that one of the greatest risks they have is confusing bias with actual investor risk. .

Investment Thesis/What is your rationale for your approach to investing? 

Revolve Fund is seeking to raise up to $10MM to increase affordable capital access for small businesses owned or tax-exempt organizations led by historically marginalized U.S. entrepreneurs through catalytic recoverable grants in conjunction with community pipeline building, traditional grantmaking, in-depth underwriting, and continuous business support. Revolve will expand its national portfolio with more emphasis on the following regions or states during its first years of operations:​ 

• U.S. South
• Mid-Atlantic ​ 
• Midwest ​ 

Revolve will continue its place-based strategies in Baltimore, MD and Detroit, MI. 

Geography:  United States

Year Founded: 2020

# of Investments: 18 recoverable grants  totaling nearly $800k

# of Investors: 12 (donors, funders, supporters, investors) 

Funds Raised: $2.3MM since inception

What’s on James’ Mind?

Book: Investing for Social Impact, Economic Justice, and Racial Equity, Edited by Dorcas Raejeana Gilmore, Lisa Hall, and Susan R Jones and Recruitment Rhapsody by Makiyah Moody Song: Anything produced by J. Dilla or Nujabes

Podcast: The Pivot Podcast features NFL stars Ryan Clark, Fred Taylor and Channing Crowder