Pacific Community Ventures

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California Initiative Update
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Mission Statement
The California Initiative will invest in
traditionally underserved markets primarily, but
not exclusively, located in California. The
objective is to discover and invest in
opportunities that may have been bypassed or
not reviewed by other sources of investment
capital.

• To earn attractive risk-adjusted returns
• As an ancillary benefit, to have a meaningful
  impact on the economic infrastructure of
  California Underserved Markets

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Underserved Market Opportunity
Underserved markets are less efficient and have
the potential to provide superior investment
performance
Investment Opportunity

• Companies located in areas where access to
  institutional equity capital is limited
• Companies that employ workers who reside in
  economically disadvantaged areas
• Companies with female and/or minority management

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California Initiative Partners

• Garage Entrepreneurs Fund

Fund
Fund
Fund
Fund
Fund
Fund
Fund
Fund
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History Milestones
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California Initiative Performance
Investment returns to date are less meaningful
due to the young age of the Program (i.e. the
J-Curve Effect that affects all private equity
fund investments)
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Ancillary Benefits Assessment
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Underserved Market Benchmarks

• Companies located in areas where access to
  institutional equity capital is limited
• Companies located outside the top 100 postal
  codes for receiving venture capital investment.
  (These top 100 postal codes received 30 of
  venture capital investment dollars between 2000
  and 2005.)
• Companies that employ workers who reside in
  economically disadvantaged areas
• Companies where at least 25 of California
  employees live in a zip code designated
  economically disadvantaged.
• Companies with female and/or minority management
• Companies where at least one officer (e.g. CEO,
  COO, CFO, CIO) is female or ethnic/racial
  minority.

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Strong Presence in California

• Of 68 companies1
• 48 are headquartered in California
• 51 employ a significant proportion of their
  workforce in California
• 37 have been in the portfolio for one year or
  more
• Since investment, these companies have created
  nearly 2,500 jobs, including nearly 600 in
  California
• CA Initiative companies employ over 5,000
  Californians, including approximately 2,000 who
  live in economically disadvantaged areas of the
  state
• Over 170 distribution, retail and other
  facilities located across California
• 1 Active California Initiative companies (as
  reported in the Initial Assessment Report)

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Location
75 of California Initiative Companies are
Headquartered or Have a Significant Presence
in California
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Comparison to Benchmarks

• Of 68 companies, 65 are directly impacting
  underserved markets
• Of the 48 companies headquartered in California,
  45 are directly impacting underserved markets
• Many companies reach underserved markets in
  multiple ways

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Comparison to Benchmarks

• Of the 68 Companies
• 51 companies (75) are headquartered in areas of
  US where access to institutional equity is
  limited 35 of these are in California.
• 39 companies (57) have at least one female or
  minority owner or officer (e.g. CEO, CFO, COO,
  CIO).
• 32 companies (47) have a workforce where at
  least 25 of California employees live in
  disadvantaged areas.

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Banc of America Capital Access Funds

• Invested in 8 private equity partnerships, 2
  others approved
• All 10 partnerships contribute to meeting at
  least one California Initiative objective
• 7 focus on ethnic minority opportunities
• 5 focus on employing workers from disadvantaged
  areas
• 2 improving access to capital, capitalizing
  financial institutions that serve low
  income/minority communities
• 8 have at least one female or minority partner
• 8 have offices in California

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California Initiative Summary

• Performance is improving
• Climbing out of the J-Curve
• Real value being created in the portfolio
• Still fairly early in Programs life (limited
  liquidity to date)
• Partners continue to find attractive
  opportunities in CA
• The analysis and reporting of financial results
  and ancillary benefits of the California
  Initiative are greatly enhanced
• Staff will provide the Investment Committee with
  regular updates on financial and non-financial
  highlights of the Program
• Ancillary benefits assessment report to be
  completed annually

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California Initiative Case Study