There are no fees for investees on CataCap. We do not charge any fees for the investments made through our platform. The only fees are incurred by donors or investors when they add funds to their CataCap accounts to make an investment. This ensures that investees receive funding without additional costs.

For your reference, here is the fee structure for donors/investors:

• Credit Card Donations: A 4% processing fee applies to all credit card donations.
• ACH Payments: A 2.55% fee applies to ACH payments, with a cap of $25. These fees are deducted from the donor/investor’s CataCap balance.
• CataCap & Investment Management Fees: A 5% fee (1.25% per year for 4 years, billed upfront) covers investment advisory services.

Investors are issued tax-deductible receipts for the original donation amount, before any fees are deducted.

A Donor Advised Fund (DAF) is a charitable giving vehicle that allows donors to make a charitable contribution, receive an immediate tax deduction, and recommend grants from the fund over time to qualified nonprofit organizations. Managed by public charities or financial institutions, a DAF provides flexibility by allowing donors to grow the donated capital tax-free and distribute it to charities at their discretion. While the funds are irrevocably committed to charitable use, donors maintain advisory privileges, directing how and when their contributions are granted to their causes of choice.

Raising capital from foundations, Donor Advised Funds (DAFs), or donations offers unique advantages for companies seeking impact-driven investments. Here’s why:

• Untapped Capital: There is a vast pool of over $1.6 trillion in philanthropic capital available, much of which is underutilized for investments.
• Patient Capital: Since investors in DAFs or foundations receive a tax deduction upfront, their focus shifts away from personal financial gain, allowing them to provide patient capital that prioritizes long-term growth and impact.
• Higher Risk Tolerance: These investors are often more willing to take on higher risks compared to traditional personal capital investments, as their personal returns are already secured through tax benefits.
• Purpose-First Investments: Donated capital is often directed toward investments that align with the values and causes donors care about, providing a strong sense of purpose in their financial support.
• Flexible Capital: Investors using DAFs or foundation capital are generally more flexible regarding the type of investment, its duration, and the expected returns, offering founders greater adaptability in structuring deals.
• Amplification: Impact investments backed by philanthropic capital often gain greater visibility, as they are easier to share with and supported by your biggest fans, helping to amplify both the investment and the social mission it serves.

This combination of untapped resources, patient and flexible capital, higher risk tolerance, and mission-aligned investment provides a compelling case for companies to consider raising capital from foundations, DAFs, or donations.

Donated capital refers to funds contributed to a foundation or Donor Advised Fund (DAF) for philanthropic purposes, and these funds can then be used for impact investments. Unlike regular angel, VC, or friends and family investors who are primarily motivated by financial returns, donated capital operates under different incentives:

• Tax Deduction Benefit: The individuals or organizations contributing to donated capital (via foundations or DAFs) receive an immediate tax deduction. As a result, they aren’t focused on maximizing personal financial returns but on creating social or environmental impact.
• Higher Risk Tolerance: Because these investors have already secured their financial gain through tax benefits, they are often more willing to take on higher risks with their investments than traditional investors who expect a return on their capital.
• Patient Capital: Donated capital is more patient, meaning the investors are less concerned with quick exits or short-term financial returns. They are typically willing to support long-term projects that align with their values or missions.
• Purpose-First Approach: While traditional investors may look at return metrics and scalability, donated capital is primarily invested with a focus on making a positive impact. These investors prioritize purpose over profit.

In contrast, angel, VC, or friends and family investors are usually looking for financial gains and returns on their investments within a specific timeframe. They tend to have lower risk tolerance, expect quicker exits, and are motivated by personal financial gain rather than purely philanthropic objectives.

In summary, donated capital provides a flexible, mission-driven alternative to traditional investment, often with greater tolerance for risk, a longer-term perspective, and less pressure on financial returns.

Donated capital from a foundation or Donor Advised Fund (DAF) or direct charitable gift works well for investments that create a clear environmental or social impact. These are not donations—these are investments where financial returns are expected, but the focus is on generating positive change. Examples of ventures that align with donated capital include:

• Women-led ventures
• Climate technology companies
• Companies led by members of the LGBTQ community
• Businesses benefiting underserved communities
• Waste reduction and circular economy technologies

The return on investment is important because it allows the foundation or DAF to reinvest those funds into new impact-driven ventures or use the proceeds to make charitable grants to nonprofits of their choice. The expectation is not just financial return but a measurable social or environmental benefit, creating a sustainable cycle of impact. Investors using donated capital are typically more flexible and patient than traditional investors, making them an ideal partner for long-term, purpose-driven ventures.

The investment terms for donor/investors using donated capital are generally aligned with the terms of any ongoing fundraising efforts your company is conducting. This ensures consistency with other investors. If you are not currently fundraising, you have the flexibility to set the investment terms, ensuring they are attractive and relevant to donor/investors, who are often impact-focused.

Key factors to consider include:

• Type of Investment: Donor/investors can invest through various structures such as private equity, private debt, venture capital, loans, project finance, real assets, and more, depending on what suits your business model.

• Term Length: Typically, donor/investors have a longer-term horizon, as they are more focused on sustainable impact rather than quick exits.

• Expected Return: While a financial return is expected, donor/investors tend to be more flexible compared to traditional investors. The primary focus is on social or environmental impact, but returns allow them to reinvest in other impact investments or make charitable grants to nonprofits.

• Impact Metrics: Donor/investors will be most interested in ventures that have clear, measurable social or environmental outcomes. Impact metrics should be defined as part of the terms.

By setting terms that reflect both the financial and impact goals of the donor/investors, you can ensure a productive and aligned partnership that supports long-term growth and positive change.

CataCap simplifies the process of managing multiple investments by accumulating all contributions from Foundations, Donor Advised Funds (DAFs), and direct charitable donations into a single pool. Rather than having numerous individual investors on your cap table, CataCap consolidates these funds and makes a single investment into your company. This means that only one name—representing the entire investment pool—will appear on the cap table.

This structure provides several benefits:

• Streamlined Process: You don’t have to manage multiple small investments or deal with a large number of investors.
• Compliance: It helps avoid complications with unaccredited investors and simplifies legal and regulatory issues.
• Qualified Investor: The single entity that appears on your cap table is a qualified investor, making the process much easier to manage while still giving you access to significant capital from a diverse range of philanthropic sources.

In essence, CataCap allows you to receive large, aggregated capital from multiple sources while keeping your cap table clean and manageable with only one entry.

CataCap is particularly effective in helping fundraise from the following audiences:

1. Investors Who Have Said No:

   • Scenario: These individuals like the mission but may have declined to invest due to financial risk or other concerns.
   • Pitch: Present the CataCap method as an alternative option by offering a philanthropic approach through grants or DAFs. This allows them to support the cause without financial risk, while still making a meaningful social or environmental impact.

2. Risk-Averse Investors:

   • Scenario: These individuals love the mission but find it too risky for traditional investment.
   • Pitch: Emphasize the grant or DAF option, allowing them to support the initiative without financial risk while still achieving significant social impact through their charitable donation.

3. Current Investors Looking to Increase Contributions Without Using Personal Funds:

   • Scenario: These investors have already contributed but want to expand their involvement without dipping into their personal accounts.
   • Pitch: Encourage them to use philanthropic capital, such as grants from their DAF or foundation, to increase their investment. This approach allows them to grow their commitment while maintaining their personal financial security.

4. Category-Focused Donors:

   • Scenario: These donors already give significant amounts to causes within a specific category like your investment (e.g., Gender Equity, climate change, BIPOC communities, underserved communities).
   • Pitch: Present the CataCap method as an innovative way to invest in their area of interest, maximizing the impact of their contributions through cutting-edge, mission-driven investment opportunities that align with their philanthropic goals.

5. Investors Who Want to “Dip Their Toe In” or Invest Smaller Amounts:

   • Scenario: These investors may be interested in contributing but are not ready to commit large sums or may find the minimum investment amount too high.
   • Pitch: Offer them the option to contribute via philanthropic capital, where they can invest smaller amounts (as little as $250 through CataCap) to test the waters and support impactful ventures without the higher financial commitment required by traditional investment minimums.

CataCap is particularly suited for donors and investors who want to see their contributions go further by combining philanthropic capital with social or environmental impact investments, offering flexibility and accessibility to a wide range of supporters.