Equity investments will not cover the management costs for the fund and will ultimately be a drain on the fund as only the original investment?

 

No, Social Business Fund can charge the company which receives the equity an annual “management fee”, it can be 1% or so, depending on the actual cost of management. SBF should try to keep it to a minimum. It can be paid, on an annual basis. It may consider giving a grace period until the time when the company comes to the break-even point. This should be negotiated at the beginning and should form a part of the agreement with SBF.