The impact investment fund that operates as a non-profit

Impact investment fund Beyond Capital invests in early-stage social enterprises in India and east Africa. CEO Eva Yazhari explains the advantages – and some of the challenges – of operating as a non-profit while pursuing market-rate financial returns for its investors

After more than a decade of working in private equity and investment banking on Wall Street, my husband and I wanted to build a different kind of business — one that marries market-driven tools with meaning, and that proves it’s possible to make money and do good at the same time. Beyond Capital, which we founded in 2009, is the result of that soul searching.

Beyond Capital seeks out, fosters and invests in seed-stage, for-profit social enterprises – startups that use business strategies to solve social issues – in emerging markets. These companies are working on healthcare, clean energy, food security, sanitation and greater financial inclusion, aiming to improve the lives of people living below the poverty line. We help such startups establish themselves before moving on to the growth phase. To date, Beyond Capital has invested in five countries, reaching 2.6 million people throughout India and east Africa. Through our portfolio companies we’ve helped to employ 5,800 people, two-thirds of them women.

Clearing up misconceptions

Although we behave and invest like a venture fund, we decided to structure Beyond Capital as a nonprofit organisation (a US-registered 501 (c)(3) charity).

The decision to structure an investment fund seeking market-rate returns as a nonprofit has led to some confusion. For example, institutional investors such as large banks and pension funds tend to think we only pursue concessionary, below market-rate returns, or that we are grantmakers. In reality, we invest capital (US$25,000 - $200,000) – through debt, equity, and flexible financial instruments like convertible notes – into for-profit enterprises, with the intention of generating simultaneous social and financial returns.

Institutional investors tend to think that we only pursue concessionary, below market-rate returns, or that we are grantmakers

To date, our fund has achieved a 27% internal rate of return, essentially doubling our money. This has enabled us to plow funds into new investments and make our own organisation sustainable. As a non-profit, any profits are recycled into our next investment, like an evergreen fund. That magnifies the impact of each donation: every US$1 donated to Beyond Capital allows us to reach nine people living below the poverty line.



Founded in 2011, ERC Eye Care provides affordable, in-demand eye care in underserved rural regions of India. In March 2014 Beyond Capital invested an undisclosed amount in the company, in the form of convertible debt. The team also supported ERC’s management with pro bono legal services.

Beyond Capital re-invested in the company two more times in 2015 and 2016, and then exited in December 2017 by selling its equity stake to a like-minded impact investor, Ankur Capital, leading a Series A fundraise (a later stage, higher-stake fundraising round).

Beyond Capital doubled its money with this investment, achieving a 26% IRR, while improving an estimated 150,000 lives over four years.


Pro bono support

Being a non-profit has also helped Beyond Capital to leverage more than $1m worth of pro bono services from lawyers, accountants, financial professionals, and others. This means we can keep our own operations lean and nimble.

Alongside the capital needed to grow a business, entrepreneurs typically need other help, including mentoring, legal advice, and accounting support. We deploy pro bono services to our portfolio companies, helping them navigate operational, legal, and financial challenges as they grow. This helps develop their business models, lending the young social enterprise credibility to attract future investors.

We’ve had many eager volunteers, but have had to learn not to spread ourselves too thin. Until recently, we had a large committee of 23 volunteer members and advisors, helping us with core activities like due diligence. Coordinating that many people was not cost-effective. We realised we would need to strike a balance between accessing as much pro bono support as possible, and organisational focus.

Now, we involve a smaller, core group of long-term volunteers in our investment process and decision-making. These long-term pro bono experts are part of our leadership team, have committed 10-20 hours per week to Beyond Capital, and are deeply involved in our investment activities. This shift has helped us streamline our due diligence process, and reduced volunteer turnover. Today, our team is small but mighty, with three full-time staff and four volunteers on our leadership team.

Early-stage investing

There are other advantages. Compared to traditional venture funds, Beyond Capital has greater flexibility to decide what to invest in. We are not a ‘spray and pray’ investor; we are highly considered in where we place our capital. Without the pressure from stakeholders for immediate exponential growth, we can wait for the right opportunity.

Compared to traditional venture funds, we have greater flexibility to decide what to invest in [and don’t face] pressure from stakeholders for immediate exponential growth

In addition, many early-stage social enterprises – particularly in emerging markets – are perceived as risky, and therefore lack access to professional finance and investment. Beyond Capital can fill this capital gap, without shouldering too much risk – we are able to take our time and don't face the pressure of investing in an enterprise before conducting our rigorous due-diligence process.

Being structured as a non-profit also means that our capital can be patient: our typical investment horizon is 5-10 years. We often participate in follow-on fundraising rounds, and can offer flexible investment instruments like convertible notes (a form of short-term debt that can turn into equity). Finally, patient capital means that we work closely with investees to determine an appropriate timeline for exit.

Impact investing for all

Many people believe impact investing is only for the extremely wealthy or highly connected. But anyone can support social enterprises. At Beyond Capital, we are committed to making impact investing accessible to all and engaging in the conversation about money and meaning. We launched an Ambassador Program in 2018 to encourage more people to join this global movement, and to highlight the incredible work the social enterprises in our portfolio are doing.

As impact investing gains momentum, the idea of marrying profits with purpose becomes more mainstream. Soon, I believe, this will be the goal and expectation of all investors.

Header photo: A client of Numida – a Beyond Capital investee – in her shop in downtown Kampala, Uganda. Numida helps small businesses to make better use of data and provides a financial management app to determine creditworthiness.

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