By Opportunity Zone Magazine Staff
The Pearl Fund is launching its fund with a focus on high-potential opportunity zone businesses that can yield 10 times or more in returns. The fund will raise $25 million from investors with capital gains who are seeking tax-free venture capital returns. The Pearl Fund is an Opportunity Zone fund that is also a venture capital fund.
“The Pearl Fund will generate significantly higher returns and greater impact than Opportunity Zone real estate funds, and due to its tax-free nature, total returns should be significantly higher than typical venture funds,” says Brian Phillips, founder and managing partner of The Pearl Fund.
The specialized boutique fund will target three areas: achieving high returns that will be completely tax mitigated to investors through Opportunity Zone tax laws; early-stage startups that can yield 10 times or more in returns; and Qualified Opportunity Zones in New York and Pennsylvania.
Phillips says the 2019 Pearl Fund will invest exclusively in high potential, early-stage startups where they expect to get at least a 10-times return on their investment.
“These will be startups that are housed in, will launch in, or will relocate to the Brooklyn Navy Yard or one of the other Opportunity Zones within a three-hour drive of New York City. The Fund will primarily invest in seed and A rounds in technology companies – for example, software, cleantech, agtech – and will not be investing in real estate,” says Phillips.
The Fund is located in two top locations: The Brooklyn Navy Yard – a 300-acre industrial waterfront park that has some 400 companies generating $2.3 billion in annual revenue; and North East Pennsylvania’s Jessup Small Business Center –a 132-acre mixed-use park that is also a Keystone Opportunity Zone and a Keystone Innovation Zone, affording businesses located here special federal, state, and city tax advantages.
“We're also working with others who are launching venture-focused OZ funds in other geographies, or in specific focus industries such as 5G and biotech, in order to leverage our platform to get their funds set up quickly. Ultimately, we would like to help seed a movement of business investment in OZ, versus the current focus on real estate,” says Phillips.