With access to capital, historically undervalued businesses have a chance to succeed

In 2020, after the tragic death of George Floyd, Colin Meadows came to me with a question: “Why aren’t more investment firms targeting women- and minority-owned businesses?” What he learned about the opportunity within this sector prompted him to step out of his leadership role at Invesco, where we worked together for 15 years, to establish o15 Capital Partners.

Through his research, Colin discovered that there are more than 20,000 businesses in the US with $10 million or more in revenue that are led by women and people of color. They say their biggest challenge to growing their businesses is access to capital, and especially access to credit. Colin and his partners are looking to change that by founding their firm in Atlanta, the heart of one of the most diverse regions in the country. They’re aiming to “do good and do well” – making a difference in the lives of minority business owners and the communities they serve, while generating returns for investors. I asked him how it’s going since launching the firm in June 2022.

“Deal-flow is the lifeblood of an investment firm, and I’m pleased to say that we’ve closed more than 50 deals in the three months since we opened our doors,” Colin said. “We’ve been very intentional about the industries we serve – healthcare, education and business services – because these have a track record of being resilient to market conditions and making a long-term impact.

“My partners and I have a combined total of 80 years of credit experience in our target markets so we’re able to have conversations with business owners that go beyond financing,” he said. “We are in a rising rate environment, and as rates go up, traditional lenders get tighter, which creates a huge opportunity for us as a debt provider. That said, entrepreneurs have to think long and hard about taking any form of capital, but we know in these industries, that capital is needed and put to good use.”

Entrepreneurs have subject matter expertise. They’re passionate about what they’ve done, but by achieving a level of success, they’re suddenly introduced to this whole new world of finance.

“That’s right,” Colin said. “We spend time helping them get their financials in a form that we can underwrite, explaining how to think about equity capital and leveraging our networks to give them access to talent, which is probably the scarcest resource today. We are a credit manager so we don’t take board seats, but we can be counselors.”

I know from experience that helping put businesses in a position to be successful is a natural fit for Colin. He and his partners are operating in a market with tremendous potential, and the story they’re sharing resonates as impact-investing has come to the forefront over the last two years. That’s why Invesco is a committed anchor investor. For start-up businesses to get to the next level, we’re creating financial support, which creates wealth, which makes a difference in underserved communities.

“We’re locking in capital to do good, an idea that dates back to the Civil War,” Colin said. “Our name comes from ‘Special Field Order 15’, which was issued to former slaves by President Lincoln in 1865. It promised them each 40 acres to farm so they could establish a livelihood. Unfortunately, President Johnson rescinded the order after Lincoln’s assassination, but the spirit lives on. Capital formation is fundamental to social justice.

“We’ve been heartened at the reaction we’re getting,” Colin said. “There’s a level of traction and interest across the board that proves this concept is a real investment strategy that aligns with our investors’ convictions.”

I agree wholeheartedly that there’s a need for the opportunities that o15 Capital Partners is creating, and I believe they’ll be very successful. Our official response to social inequities at Invesco is to help people get more out of life, which can only be accomplished if we work together to address the inequities that we see in our communities. That’s as true today as it was in June 202. Today, o15 Capital Partners and Invesco are just two of the companies that are part of a stronger movement united behind it.