Community Development Venture Capital Alliance

Cascadia Revolving Fund's
Rural Development Investment Fund
1901 NW Market Street, Seattle, WA 98107
Telephone: (206) 447-9226 ext. 101
Fax: (206) 682-4804
Website: www.cascadiafund.org
Email: info@cascadiafund.org

Key Personnel:
Shawn Canale, Executive Director and CEO, Cascadia Revolving Fund
David Kleiber, Fund Manager, RDIF

Established: 1996

Total Committed Capital: $5.6 million

Amount Invested: $4.1 million

Geographic Focus: Pacific Northwest

Background
The Rural Development Investment Fund (RDIF) was established by the Cascadia Revolving Fund, a private, non-profit community development loan fund, and provides quasi-equity investments and technical assistance to small businesses in the rural areas of Washington and Oregon.

The RDIF makes near-equity investments through the use of a Participation Agreement (PA) - a low interest, deeply subordinated loan with an on-going revenue-based fee. Many traditional lenders view the PA debt as equity, allowing "investments" to leverage additional debt. The simplicity of structuring and closing the deal minimizes attorney fees for both parties. The PA allows for an exit over time and the owner is not forced to sell the company to pay off true venture capital investors. Similar to true equity, the entrepreneur pays a higher rate of return only if the business is growing and successful - if not, the cost of funds is lower. Though not as patient as true equity, the entrepreneur can choose to accrue the Participation Payments and delay the impact on cash flow.

Social Mission
The RDIF's goal is to help entrepreneurs start and grow successful businesses, in an effort to bring much needed jobs and economic prosperity to distressed rural communities of the Pacific Northwest.

Investment Information
The RDIF is targeted primarily toward industries that can demonstrate a competitive advantage in the rural areas of the Pacific Northwest region, specifically secondary wood products, value-added fish and agricultural products, and manufacturing from recycled materials. The Fund, however, will consider any business that can demonstrate a sustainable market niche and the potential to create good jobs in the local area.