CARL VALENSTEIN
As a practicing lawyer with 40 years of experience, Carl Valenstein specializes in domestic and international corporate and securities matters, mergers and acquisitions, project development, and transactional finance. For more than 20 years, Carl has provided legal assistance to microfinance institutions and assisted public charities, foundations, social enterprises and entrepreneurs, impact investment venture capital funds, and other impact investors. He is a founding member of the Impact Investment Lawyers Legal Working Group, which holds annual conferences. In 2023, he was recognized by Massachusetts Lawyers Weekly for his recent pro bono efforts across the region.
What drew Morgan Lewis towards its work with Ujima and how did the relationship between us begin?
We were doing work with the Boston Impact Initiative (BII) Fund in transactions. I met Nia through that, and then Lucas Turner Owens, who was with Ujima in the very beginning, let us know that Ujima wanted to build a fund similar to BII, but with a different model. The differences were that Ujima wasn’t focused as much on non-financial covenants and impact, but instead prioritized a democratic process of engagement and development in communities (particularly in underbanked and underserved communities that don’t have access to the financial resources that white communities in Boston do). And so we were involved at the very beginning in designing the fund, writing the offering memos, doing the securities work, and positioning the Ujima Fund in the market to make its proposed $5 million raise while also handling governance concerns.
So it was a natural extension of our work with BII. I've been present since the creation of the Ujima Fund and been a force at Morgan Lewis to bring in our lawyers–and it hasn’t been difficult. I get a lot of hands raised for doing this kind of work because it's hard for lawyers to find transactional pro bono work like this. There's a lot of litigation and contract review in pro bono law, but this is running and investing a fund–which makes it unique and special. We've been able to do most, if not all, of the investment transactions for Ujima.
The sense of reward and contribution that I feel while doing work for the community just feels different. That sense of contribution excites me and motivates me to do this work. Meeting the companies that are benefiting from this capital and seeing how transformative it is to their business is amazing, and it's much more impactful than making a wealthy client wealthier.
Why is the work that you do in Boston with Ujima, via Morgan Lewis, important to you?
I've done pro bono work for my entire 40-year career–I've been practicing law for a while. A lot of the first few decades was outside of the US: in Africa, Latin America, Southeast Asia and other emerging markets. But when I moved to Boston from DC nine years ago, the differences between the two cities struck me–the BIPOC communities are different, for instance, and smaller in Boston. And Boston has a long-held reputation vis-á-vis racial inequity that it hasn't overcome. So I decided that I would devote some of my time and my passion for impact investing to actually serve this community here that needs assistance. I don't have to do deals all over the world—I can still have an impact and do this at home.
What does the technical assistance that Morgan Lewis provides to Ujima look like?
The work we do for Ujima is similar to what we do for some of our other investment clients. We set up funds and handle investments and transactions; what's different with Ujima is the beneficiaries and the people we're working with. We're working with companies that don’t traditionally have access to investment, and we’ve been able to train folks at Ujima to be investors and to think like investors. Most of the Ujima folks I worked with, especially in the beginning, came out of community organizing and not investment banking–so this is a world that they didn't know. That’s what has been so rewarding about this: we're helping a new generation of diverse, BIPOC-led investors.
How does the provision of technical assistance undergird the work that Ujima is doing?
I view our legal work–the kind of technical assistance we offer–as providing necessary structural guidance. But there's not only lawyering; we also do a lot of training. The businesses we work with via Ujima need accounting help, tax help, legal help, and they also need help understanding all of the investment terminology.
Ujima once held some educational programming on human capital management: labor relations, employment issues, etc, and we asked if we could assist. I reached out to our labor and employment group and had a couple of lawyers come over and do a program and Q+A for community members–that's a form of technical assistance, too.
Now we're developing models and training folks to learn these new models. Most of the transactions that we’ve done with Ujima until recently have been debt issuance or debt deals, wherein Ujima loans money to a business, but now we’re doing equity deals (with Bay State Banner and with Kidogo)–which are very different. So we’ve had to train Ujima in how to be an equity investor.
For example, Ujima had never invested via a SAFE (simple acquisition for equity) instrument, but now the Kidogo investment is proposed as a SAFE; we led negotiations on that front and introduced the model. That's a form of technical assistance, too. It's not just doing the legal work, but it's also training people to understand what they're doing. Here, everybody's learning, and with each deal folks get more sophisticated.
What vision does Morgan Lewis have for its pro bono work and its impact on BIPOC communities?
I'm the one of the co-leads of our ESG Responsible Business initiative, and we actually have a report that's available online: our Responsible Business Report. It provides a lot of information about our pro bono commitment. But one element of that pro bono commitment involves racial equity and financial inclusion for communities that are underserved. We have an extensive program and a variety of things that we do in that space, but the work we do for Ujima and for BII is very much in the sweet spot of said space.
Following the Supreme Court’s Harvard/UNC decision last year, we have advised Ujima on the implications of these cases on their mission and operations. See our newly released Law Flash Eleventh Circuit: Grant Program for Black Female Entrepreneurs Is Likely Unlawful.
Financial inclusion is an important part of DEI and civil rights work–and again, I've been working in this space for decades so this is not a new thing for me. We now have a new generation of lawyers devoted to working in this realm, and my greatest contribution aside from doing the work is training the next generation of lawyers–and investors–to do this work so we can scale it up and actually increase the impact we're having.
Are there any standout moments that you've had in your professional relationship with Ujima?
I think closing the first deal, with CERO Co-op, really stands out; there are a couple of milestones, of course, including getting the fund raised to full capitalization, but moving from fundraising towards the first investment was key. And it was a complicated deal with CERO, but we got that done.
We have a team of lawyers working in our tax-exempt group to set Ujima up as its own nonprofit–that’ll be the next big milestone. Scaling the fund up will come next; there’s still a lot of the initial $5 million left to deploy, but eventually we might do what we did for BII fund–I worked on the second fund for BII, which is a $20 million fund. So down the road, I hope that's what Ujima does: make a second fund, a larger fund to scale the mission.
What excites you about this work?
I enjoy using the legal skills I've developed to benefit people who need it more, and in some cases appreciate it more, in my pro bono practice. The sense of reward and contribution that I feel while doing work for the community just feels different. That sense of contribution excites me and motivates me to do this work. Meeting the companies that are benefiting from this capital and seeing how transformative it is to their business is amazing, and it's much more impactful than making a wealthy client wealthier. Everybody who works on [Ujima] this feels the same way. They’ll often say, “now I remember why I went to law school. I wanted to have an impact on people's lives.”
We need those reminders, because that feeling can occasionally get lost in some of the billable work. Some people refer to the pro bono work as the “rent for living.” You have to give back and pay forward. And there's a satisfaction that comes from that. ✦
We were doing work with the Boston Impact Initiative (BII) Fund in transactions. I met Nia through that, and then Lucas Turner Owens, who was with Ujima in the very beginning, let us know that Ujima wanted to build a fund similar to BII, but with a different model. The differences were that Ujima wasn’t focused as much on non-financial covenants and impact, but instead prioritized a democratic process of engagement and development in communities (particularly in underbanked and underserved communities that don’t have access to the financial resources that white communities in Boston do). And so we were involved at the very beginning in designing the fund, writing the offering memos, doing the securities work, and positioning the Ujima Fund in the market to make its proposed $5 million raise while also handling governance concerns.
So it was a natural extension of our work with BII. I've been present since the creation of the Ujima Fund and been a force at Morgan Lewis to bring in our lawyers–and it hasn’t been difficult. I get a lot of hands raised for doing this kind of work because it's hard for lawyers to find transactional pro bono work like this. There's a lot of litigation and contract review in pro bono law, but this is running and investing a fund–which makes it unique and special. We've been able to do most, if not all, of the investment transactions for Ujima.
The sense of reward and contribution that I feel while doing work for the community just feels different. That sense of contribution excites me and motivates me to do this work. Meeting the companies that are benefiting from this capital and seeing how transformative it is to their business is amazing, and it's much more impactful than making a wealthy client wealthier.
Why is the work that you do in Boston with Ujima, via Morgan Lewis, important to you?
I've done pro bono work for my entire 40-year career–I've been practicing law for a while. A lot of the first few decades was outside of the US: in Africa, Latin America, Southeast Asia and other emerging markets. But when I moved to Boston from DC nine years ago, the differences between the two cities struck me–the BIPOC communities are different, for instance, and smaller in Boston. And Boston has a long-held reputation vis-á-vis racial inequity that it hasn't overcome. So I decided that I would devote some of my time and my passion for impact investing to actually serve this community here that needs assistance. I don't have to do deals all over the world—I can still have an impact and do this at home.
What does the technical assistance that Morgan Lewis provides to Ujima look like?
The work we do for Ujima is similar to what we do for some of our other investment clients. We set up funds and handle investments and transactions; what's different with Ujima is the beneficiaries and the people we're working with. We're working with companies that don’t traditionally have access to investment, and we’ve been able to train folks at Ujima to be investors and to think like investors. Most of the Ujima folks I worked with, especially in the beginning, came out of community organizing and not investment banking–so this is a world that they didn't know. That’s what has been so rewarding about this: we're helping a new generation of diverse, BIPOC-led investors.
How does the provision of technical assistance undergird the work that Ujima is doing?
I view our legal work–the kind of technical assistance we offer–as providing necessary structural guidance. But there's not only lawyering; we also do a lot of training. The businesses we work with via Ujima need accounting help, tax help, legal help, and they also need help understanding all of the investment terminology.
Ujima once held some educational programming on human capital management: labor relations, employment issues, etc, and we asked if we could assist. I reached out to our labor and employment group and had a couple of lawyers come over and do a program and Q+A for community members–that's a form of technical assistance, too.
Now we're developing models and training folks to learn these new models. Most of the transactions that we’ve done with Ujima until recently have been debt issuance or debt deals, wherein Ujima loans money to a business, but now we’re doing equity deals (with Bay State Banner and with Kidogo)–which are very different. So we’ve had to train Ujima in how to be an equity investor.
For example, Ujima had never invested via a SAFE (simple acquisition for equity) instrument, but now the Kidogo investment is proposed as a SAFE; we led negotiations on that front and introduced the model. That's a form of technical assistance, too. It's not just doing the legal work, but it's also training people to understand what they're doing. Here, everybody's learning, and with each deal folks get more sophisticated.
What vision does Morgan Lewis have for its pro bono work and its impact on BIPOC communities?
I'm the one of the co-leads of our ESG Responsible Business initiative, and we actually have a report that's available online: our Responsible Business Report. It provides a lot of information about our pro bono commitment. But one element of that pro bono commitment involves racial equity and financial inclusion for communities that are underserved. We have an extensive program and a variety of things that we do in that space, but the work we do for Ujima and for BII is very much in the sweet spot of said space.
Following the Supreme Court’s Harvard/UNC decision last year, we have advised Ujima on the implications of these cases on their mission and operations. See our newly released Law Flash Eleventh Circuit: Grant Program for Black Female Entrepreneurs Is Likely Unlawful.
Financial inclusion is an important part of DEI and civil rights work–and again, I've been working in this space for decades so this is not a new thing for me. We now have a new generation of lawyers devoted to working in this realm, and my greatest contribution aside from doing the work is training the next generation of lawyers–and investors–to do this work so we can scale it up and actually increase the impact we're having.
Are there any standout moments that you've had in your professional relationship with Ujima?
I think closing the first deal, with CERO Co-op, really stands out; there are a couple of milestones, of course, including getting the fund raised to full capitalization, but moving from fundraising towards the first investment was key. And it was a complicated deal with CERO, but we got that done.
We have a team of lawyers working in our tax-exempt group to set Ujima up as its own nonprofit–that’ll be the next big milestone. Scaling the fund up will come next; there’s still a lot of the initial $5 million left to deploy, but eventually we might do what we did for BII fund–I worked on the second fund for BII, which is a $20 million fund. So down the road, I hope that's what Ujima does: make a second fund, a larger fund to scale the mission.
What excites you about this work?
I enjoy using the legal skills I've developed to benefit people who need it more, and in some cases appreciate it more, in my pro bono practice. The sense of reward and contribution that I feel while doing work for the community just feels different. That sense of contribution excites me and motivates me to do this work. Meeting the companies that are benefiting from this capital and seeing how transformative it is to their business is amazing, and it's much more impactful than making a wealthy client wealthier. Everybody who works on [Ujima] this feels the same way. They’ll often say, “now I remember why I went to law school. I wanted to have an impact on people's lives.”
We need those reminders, because that feeling can occasionally get lost in some of the billable work. Some people refer to the pro bono work as the “rent for living.” You have to give back and pay forward. And there's a satisfaction that comes from that. ✦