Newspaper article THE JOURNAL RECORD

MetaFund Corp. in OKC Fosters Needy Businesses

Newspaper article THE JOURNAL RECORD

MetaFund Corp. in OKC Fosters Needy Businesses

Article excerpt

Tom Loy wants to save the world with millions of dollars in venture capital.

"I'm a macro guy. I'm not looking to save one child at a time. I'm trying to save a whole bunch of people at the same time," said Loy, chairman and chief executive of MetaFund Corp. in Oklahoma City. "It's a pretty high bar to set. I realize that."

More than seven years ago, Loy envisioned MetaFund as an engine of change.

"To create a collaborative Oklahoma environment of financial and social capital, citizenship and civil society, in which virtually any viable community, economic and/or work force development initiative can be realized," he wrote.

That sweeping goal was prompted by a trip to Czechoslovakia in 1992 when Loy, then resident banking adviser for the U.S. Treasury, helped privatize the banking system on that country's way to splitting into two governments. Loy found himself working alongside the same people he had been told as a child were part of an evil empire, but realized instead that they were just like us - struggling to raise families and find fulfillment in their lives.

"That really got me thinking about trying to save the world," he said.

Rather than approach the problem on a person-by-person basis, Loy had grander plans. Back home, he set out to create noncompetitive partnerships among Oklahoma banks, other profit-driven entities, government agencies, individuals and nonprofit organizations. The $10 million he initially collected from those participants has been dedicated to loans and venture capital to boost community and work force development, create jobs and drive property development and rehabilitation.

"(The MetaFund vision statement) is a little more broad and eclectic than most people would normally try to do in any rational organization," he said.

Loy said he fast-talked 20 Oklahoma banks out of hundreds of thousands of dollars each to establish a merchant banking private equity firm as a federally certified CDFI, or community development financial institute. Most similar nonprofit groups spend more of their time fundraising, he said, but MetaFund has been self- sufficient since its creation and still has several million dollars of liquidity.

The money he collected mostly from banks would have been earmarked for Community Reinvestment Act projects anyway, Loy said. That federal law, enacted in 1977, encourages depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods. Banks are supportive of the CRA, he said.

"But they are typically frustrated by its administration and applications," he said. "My argument to them, along with some financial incentives, was to pool a significant amount of money, specialize in financially viable community development investments, and diversify that pool with a target of being financially self- sustaining, in order to make community development a legitimate, self-sustaining, legitimate business model. …

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