Pacific Community Ventures & Galaxy Desserts: Community Development Through Private Equity Investing

Abstract

A managing partner of Pacific Community Ventures, a San Francisco-based private equity fund, had until the end of the week to decide if he wanted to invest in Galaxy Desserts, a Bay Area manufacturer of premium baked goods. PCV was a private equity firm that took a double-bottom-line approach, a two-pronged objective of delivering both financial and social returns. Excerpt UVA-ENT-0174 Dec. 6, 2011 PACIFIC COMMUNITY VENTURES AND GALAXY DESSERTS: Community Development through Private Equity Investing Eduardo Rallo, better known to his colleagues and friends as Edo [pronounced ED-oh], ran up to a row of turnstiles at the Powell Street Bay Area Rapid Transit (BART) station as he heard the screeching of his train arriving. His portfolio company's quarterly budget meeting had just run 75 minutes over schedule, so he was in a hurry as he anxiously fumbled through his wallet in search of his ticket to open the turnstile's gates, raced down the stairs, and stepped onto the lower platform only to see the train pull away. For the next 12 minutes, he would be stranded without Internet access or cell reception. His thoughts drifted toward his latest investment opportunity, Galaxy Desserts, Inc. (Galaxy), a San Francisco Bay Area-based manufacturer of premium baked goods. As managing partner of Pacific Community Ventures (PCV), a San Francisco-based private equity fund, Rallo had until the end of the week to decide if he wanted to invest in Galaxy. PCV was a private equity firm that took a “double-bottom-line” approach, a two-pronged objective of delivering both financial and social returns. Rallo had broad experience working and investing in the food service industry and had an extensive network of individuals that eventually led to his introduction to Galaxy. . . .