This post was originally produced for Forbes.
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Eva Yazhari, co-founder and CEO of Beyond Capital, a nonprofit organization that makes profitable, seed-stage investments in India and East Africa, says the nonprofit status “is vitally important for us.”
Operating as a nonprofit has allowed the organization to attract pro bono resources that made the fund operationally possible.
“If you think about a fund of our size, the economics don’t work when you’re taking a two and twenty,” she says referring to the standard venture fund model of charging investors a 2% management fee plus a carried interest of 20% of the profits.
The Beyond Capital fund is just $1.8 million, meaning that a 2% management fee would pay only $36,000, not enough to run a fund.
Eva Yazhari, Beyond Capital
Beyond Capital was born as a family philanthropy. “About two years in, we realized that there was a tremendous appetite from our networks to focus…