On September 24th, the Economic Innovation Group hosted a webinar to share emerging efforts to support new and growing operating businesses in Opportunity Zones.
Presenters covered a host of topics; from structuring and managing Qualified Opportunity Funds (QOFs), to becoming a Qualified Opportunity Zone Business (QOZBs), to real-time insights on raising capital from Opportunity Zone investors, and more. Highlights from the webinar and a full recording is available below for more information.
Creating a vibrant investment ecosystem for entrepreneurs and small businesses is key to realizing the promise of Opportunity Zones. There has been a significant uptick in activity across both the public and private sectors to support investment in operating businesses since Treasury released the second round of proposed regulations in April, which provided much needed clarity and guidance.
- Catherine Lyons, Economic Innovation Group, kicked off the webinar by discussing the key issues addressed in the second round of regulations, as well as what additional tweaks might be needed to optimize functionality.
- Rachel Reilly, Economic Innovation Group, followed by sharing examples of incentives and resources being offered at all levels of government to support employers and employees in Opportunity Zones, as well as a number of Opportunity Funds, intermediaries, and investments in operating businesses geared toward impactful outcomes.
- Korb Maxwell, Shareholder at Polsinelli, then discussed the portfolio of work he is leading for his firm to structure transactions, saying “we are starting to make real positive change in communities and I think that is only going to continue to grow.” He shared six iterations of structure models, as well as a seventh hypothetical model for a tax exempt organization.
- Brian Phillips, Managing Partner at The Pearl Fund, shared his experience as the first venture capital fund to have launched an QOF, including the challenges presented by the initial lack of regulatory guidance. With increased certainty, he spoke about the high potential of venture capital investing in operating businesses located in Opportunity Zones, calling the potential upside of the policy “unprecedented” and citing beneficial social outcomes through job growth and increased local spending.
- Anne Driscoll and Chris Schultz of Launch Pad then provided their insights and advice as an organization that recently became a QOZB, is in the process of raising capital, and is building the capacity of others looking to do the same. They underscored that traditional impact investors, including individuals and funds within Opportunity Zones, are needed to support early proof concepts, saying “investors invest where they live, where they work, where they grew up so that’s a great way to target.”
With so much great content, we did not have time for Q&A. We have shared the questions submitted with the guest speakers, and will amend this blog post in the future to reflect responses provided.
EIG’s OZ Webinar Series: This webinar was the fifth in a series EIG will host throughout 2019. These webinars address a variety of topics related to Opportunity Zones implementation, showcase best practices from around the country, and serve as a resource for investors, project sponsors, and community developers looking to use the incentive. So far, EIG has covered an introduction to Opportunity Zones, an analysis of the most recent round of regulations, and community best practices in heartland, rural, and tribal communities.
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