Archive for the ‘SOCAP16’ Category

SOCAP16 And Beyond: A Community of Parts and Whole

September 14th, 2016

By Jed Emerson

As the SOCAP community gathers for its 9th convening, one can’t help but step back to reflect upon the journey we’ve been on over these recent years.

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Personally, I’ve been active in the world of impact investing, sustainable finance and effective philanthropy for nearly 30 years and, of course, have been participating in the SOCAP gathering for most of its life. Looking back, I remember in the aftermath of the 2008 financial crisis, we saw an influx of folks new to the community, coming to us from failed Wall Street firms as well as from lives wherein folks found that at the age of 25 or 35 or 50 they sought to do more than either good or well. However we got here, we all gather around the notion of purpose driven capital, of bringing your whole self to one’s work and of leveraging all our available assets for impact. (Okay—some of us are still working on that last one, but we’re getting there!).

My point is that we have always been a gathering of mainstream rejects and new market opportunists, visionary capitalists and 21st Century socialists. We have been a gathering of social entrepreneurs, asset owners, fund managers, thought leaders and focused practitioners. Early on, I made the observation that SOCAP was where Wall Street met Burning Man. We are, indeed, a fairly unique gathering of the Tribes. And we should celebrate that!

Those of you who know me, know my own journey has never been one of purely professional career development, but rather a set of unfolding personal passions. I’ve gone from peer tutor in Spanish Harlem, to youth development in Denver’s 5-Points and San Franciscio’s Tenderloin neighborhoods and, finally, to nearly two decades of work in various aspects of what we now call impact investing. I know each one of you in this room can tell the same story of engagement in a life of impact. I tell you where I’ve been in order to affirm the reality that each of our journeys is diverse, changing and dynamic. If we are lucky and born into the right set of circumstances, our lives unfold in many ways and from many perspectives over the years. Who I was at fifteen or twenty-five or forty-five is not who I am today—yet each of those identities is in me today; each contributes to and rolls into the person who stands before you this morning.

Just as individuals are the sum of the parts of their lives, communities are also made up of everything they have been, the parts they are right now and the possibilities they hold for the future. Our communities of impact are dynamic and evolving; they look different based upon where you stand as you engage with them. You see them differently based upon the lens through which you see their emergent realities.

SOCAP16, as one such community, is itself increasingly diverse, dynamic and emerging.

And this is an understanding of community I have had to personally re-engage with. At the close of SOCAP15, I was left with very mixed feelings. One the one hand, it was great to see that however you want to define “going mainstream” our ideas and practices (viewed in diverse ways and brought to market through various practices) had, in fact, gone mainstream! We had Goldman Sachs, Bain, BlackRock and a host of other institutional actors here, contributing and engaging with this community; and here as a new part of this community. We had Tideline, Confluence, Nexus and a host of other smaller firms and larger networks engaging with us, advancing their perspectives and promoting their visions. And of course, we had the passion and commitment of hundreds of social entrepreneurs giving witness to their strategies and the challenges of creating the impact organizations not only of today, but of tomorrow. It was both great and disillusioning all at the same time!

It was great, because one could not help but feel we—as an increasingly diverse set of actors promoting a very nontraditional understanding of capital—had arrived!

And it was disillusioning in that it was also clear we are, as a community, still coming to grips with many fundamental questions with regard to who we are, what we believe and how best to be positioned to move forward to capture the possibilities before us.

I was disappointed to see how much of the SOCAP15 conversation focused upon strategy and tactics—the “how” of impact investing (how to structure funds, how to measure impact, how to raise capital) when I firmly believe if many of our members spent more time connecting with the “why,” with cultivating a deeper understanding of the fundamental purpose of capital, we would find questions regarding the “how” of impact investing easier to navigate. This question of why, of the purpose of capital is a much deeper, historic conversation than we have time to explore today—and is the focus of much of my current work—but the answer to this question of purpose is itself embedded within how we understand the place and structure of our current—and evolving—community.

As I have reflected upon SOCAP15 over these past months and have then also observed some of the subsequent discussions taking place in the broader impact community with regard to justice, equity and impact, I’ve come to realize what I know many of you see as well, and that is this:

As we move to scale our impact and continue to embrace the ongoing mainstreaming of our vision and practices, we need to create a truly big tent that may simultaneously hold all our various parts while also ensuring we’re all a part of the same gathering and overall movement committed to impact, equity and the effective deployment of diverse types of capital in pursuit of multiple returns.

Let me be clear—what stands before us is not a challenge of accommodation, compromise and mediocrity. We, as individuals, each need one another if we are to achieve our specific goals. It is the diverse perspectives and slightly differing goals of our constituent parts that will make for the creation of a more fully diverse and rich impact ecosystem within which we may all thrive and grow as we pursue our own understanding of what that vision of impact and value creation should look like.

It is in this way we are simultaneously a community of parts and Whole.

I am not without my own perspectives with regard to how we should think about the nature of impact and purpose of capital. I have built my life, reputation and career upon being known for calling bullshit and speaking to what I understand to be the “truth”! And I have certainly come to my own beliefs and perspectives with a good deal of passion, experience and vision.

Yet I am also committed to a vision of the Whole for the same reason I do not despise the Jed I was in the past for not being the Jed I am today—I as an individual and we as a community, need to allow ourselves the room to simply “be” as we are in turn moving through the process of our “becoming.”

I say all this in part because I’ve observed and felt a degree of tension within our community as it has evolved over recent years. At times I’ve heard some in our community call for a new level of intolerance with regard to impact—an intolerance more appropriate to a Trump campaign rally than a gathering of change makers! Indeed, I have myself been referred to as being “an Impact Taliban” in light of the passion I bring to the promotion of my own beliefs!

I’ve heard some say there is no place for moderates in our community and one is either enraged by injustice and willing to fight back as a part of the impact investing community or one is part of the problem. I’ve also heard some say there is only one way to define the nature of the financial and impact returns we should pursue, and that if you don’t embrace their definition you are somehow not part of the real impact community. I’ve heard still others say our challenge is simply proving the case one may generate “competitive” financial returns with impact—however deep or lite—and that anything short of that makes our work irrelevant.

And so, as we begin another gathering of the Tribes here at SOCAP16, I would ask you to keep some of the following thoughts in mind:

First, we, as a community, are so much more than the sum of our parts. We are rich in our views and should seek to be increasingly diverse in terms of our membership and perspective. It is only by cultivating, growing and engaging with that diversity that we will be a stronger community in the future.

Second, as we spend the coming days comparing our experiences and emerging best practices, let us not become so lost in the weeds of our own execution of strategy and capital deployment that we lose sight of the larger meadow and growing field of which we are a part. We must always remember our work in managing capital is simply a means to the end of bringing greater justice and impact to a world that sorely needs both. As we work to improve our various skills and practices, we should do so within the context of our using equity to advance greater equity(1)—not simply to build our individual firm, market or career.

Third, for some there seems to be a sense we should define our answers in advance of fully and deeply moving through our questions and actual experience of engaging in the work at hand. We seek the perfect strategy, the perfect integration of financial returns and impact, the perfect definition of measurement and performance, and the perfect framing to attract the perfect investor group—and we then array ourselves to defend that perceived perfection to our peers. I would submit the answers we seek will best evolve as we cultivate a deeper understanding of the questions before us and not simply rush to promote our given set of answers. In the course of our work, we need to leave space for a more complex and nuanced understanding of impact and the purpose of capital to emerge.

Finally, as you move through the presentations and conversations to come, both here at SOCAP16 and at home in the months ahead, I remind us there is a unique and critical urgency to our getting on with the order of the day. Black men, women and children continue to be murdered in their own communities, going about their daily lives, driving cars and playing in front yards. Women around the world continue to be objects of abuse, trafficking and economic injustice. Animals and diverse species on our planet whose interests are wrongly deemed subservient to Homo Sapiens are in some cases directly exploited through industrial farming and in other cases increasingly tipping toward permanent extinction as a result not of natural processes but of the economic, cultural and related systems we have put in place and with which we dominate our world.

Discussion, reflection and learning are critical parts of our process. Yet, I would remind us they are simply that—parts of a process…

A process of engaging in economic and social activism; mobilizing resources and capital for communities, firms and entrepreneurs who historically have not had access to the resources they need; and a process of bringing into reality a shared commitment to advancing work that, in our lifetimes, will create deep impact upon the diverse and many human and other communities existing on this planet.

As we celebrate our diversity of perspectives and practice, let us get on with the process of working together to change our world!

Jed Emerson at Union Station in Denver.

Jed Emerson at Union Station in Denver.

Jed Emerson is Senior Impact Strategist for ImpactAssets. He is a leading strategic advisor to asset owners, as well as an impact investing leader and author. A version of this talk will be given in an opening address at SOCAP16 as well as published as a blog on September 14, 2016.

 

 

 

 

 


Sources:

  1. I’m indebted to Lucy Bernholz and Lisa Richter, who I paraphrase and who first used that phrase in 2009 as part of their great research paper by the same name!

Leadership for Glocal Impact: Key Insights and Related SOCAP Sessions

September 14th, 2016

A SOCAP Guest Post By Arjanna van der Plas

What strategies can be employed to address the complex nature of social and environmental challenges on a local and global level? And how do we design systemic solutions inspired by the greatest future possibilities, rather than define them by the past?

Questions like these fascinate every ambitious social entrepreneur. But we hardly take the time to ponder on the answers. SOCAP and the events that are organized around this conference give us the opportunity to dive into these big themes, and learn from science and practice.

On Monday September 12, Nordic Impact Week (former Nordics Go SOCAP) kicked off with an international dialogue on Leadership for Glocal Impact at Saybrook University, hosted by the Institute for Evolutionary Leadership in partnership with researchers from the Melbourne Business School Asia Pacific Social Impact Centre, who presented their groundbreaking research on business models for social impact in a hands-on workshop. Other notable partners of the event included Global Chamber San Francisco, Bay Bucks Cooperative, the NorCal Community Resilience Network, and China Social Innovation Forum.

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Key Insights from Leadership for Glocal Impact organizer Fyodor Ovchinnikov, co-founder of the Institute for Evolutionary Leadership

“When we deal with complexity, we tend to take our own perspective on the situation as the norm. No wonder that we cherish our own solutions, and try to find excuses for why these solutions have limited or even negative impact,” Ovchinnikov explains. “In our daily life we rarely take the time to map our stakeholders, let alone to closely study the relationships between them and the value that is generated and exchanged in our network. When people are challenged to do a mapping exercise like we did at the event, they suddenly realize that there are many critical things they do not know. This is uncomfortable, especially when they think that they have the solution already.”

arjanna_2“It is a very common pitfall to resist the mapping phase, to dismiss it as being a waste of time. This attitude undermines our capacity for innovation, collaboration, and collective action that can be effective in addressing the complex issues we face on local and global level. Therefore we should always remember to suspend our judgement, let go of attachments to pre-existing solutions and emotions these attachments generate, be comfortable with not knowing the right answer, and listen to others to get a better sense of what is going on. And, on top of that, we need to always remember that solving complex problems takes time. A lot of it. As well as hard work that by its nature involves ambiguity, frustration, and clashes of limiting beliefs, egos, and structures. It is an art and science to navigate the change gracefully and skillfully, resisting the temptation to avoid this hard work and retreat to what we already know and do best.”

“This blind spot that I just described shows up quite strongly in social entrepreneurship. It is common for social entrepreneurs to focus on product or service that in their opinion would help address the social or environmental issue as they understand it, and to think that if only they figure out the product-market fit, this will inevitably create significant positive social impact. This conventional laser-focus mentality makes many change makers to either think that mapping the stakeholders and analyzing relationships among them is not important, or assume that they already have sufficient understanding of the social system they are trying to fix. Usually neither of these assumptions is true.”

“As confirmed by recent research conducted by our partners from Melbourne Business School, social impact critically depends on the arrangement of value exchange among multiple actors (including businesses, government institutions & NGOs) and not so much on specific value generated by one particular actor. Think about this: if you are serious about making a real positive difference for people and the planet, in most cases it is not enough to develop a product or service that addresses the symptoms and is well received by the market. As my esteemed colleague and co-organizer Dr. Chris Dembek puts it, exclusive focus on product-market fit makes social entrepreneurs “half blind”, and they end up simply making some money from unconsciously reinforcing more of what is exactly the root cause of the complex problem they claim to address.

I hope that for many participants of our pilot #glocalimpact16 event these insights will serve as a springboard for a deep and honest inquiry that can take their social innovation endeavors to the next level.”

Feel free to send your questions for Fyodor Ovchinnikov at f.ovchinnikov@evleadinstitute.com.

Five SOCAP Sessions on Leadership for Glocal Impact Not to be Missed

Would you like to learn more about Leadership for Glocal Impact in action? Check out these five SOCAP sessions!

What Will It Take to Solve Climate Change? Broad Challenges and Innovative Solutions

Wednesday  September 14, 10:45 AM – 11:45 AM, in Gallery 308

Ready to solve climate change? Where do we begin? Let’s look at the problem at the macro level and evaluate all the tools we have to address it, with an emphasis on the role of innovation and impact investing and the opportunities out there to get involved. This panel will bring together entrepreneurs, investors, and thought leaders to discuss the myriad opportunities that exist for joining the struggle against climate change.

Building Healthy Communities through Investments in Local Economic Strategies

Wednesday September 14, 12:00 PM – 1:00 PM, at the Southside Theater

Over the past several decades, studies have shown that up to 80% of human health is determined by social factors such as income, housing quality, and education, rather than just by the availability or quality of medical care. In response, investments are now being directed toward prevention at the community level and new strategic alliances are emerging. From the national to neighborhood level, we’ll explore new drivers and tactics for investing in population health.

Food Climate Collaborative in Action

Thursday September 15, 11:00 AM – 12:00 PM, in C235

Food manufacturers, retailers, distributors, and suppliers are leveraging the collective power of the natural foods industry and teaming up to take bold action to reverse climate change. OSC2, in partnership with natural foods industry leaders, is developing a networked approach to inspire action and recognize businesses doing the right thing. Learn how sustainable food leaders are deepening their commitments, expanding partnerships, and sharing best practices.

A Story of Unreasonable Collaboration

Friday September 16, 8:30 AM – 9:30 AM, at the Festival Mainstage

The most radical innovation and impactful change often happens at the convergence of sectors, perspectives, and industries. With 325 years of history and expertise in banking, Barclays has recently engaged with Acumen and Unreasonable Group to pioneer new models of partnership. Join this panel of unlikely collaborators to learn how they are working together to unleash the power of entrepreneurship to create jobs, build a greener economy and develop new opportunities for inclusive business.

Best of Cities: How to Teach All Businesses in Your City about Impact

Friday September 16,  11:00 AM – 12:00 PM, in the  BATS! Theater

Is it possible to have every business in a city learn how to solve locally entrenched issues? Yes! NYC started a citywide program to teach all businesses – not just those that drank their Kool Aid – how to create high quality jobs, strengthen communities, and preserve the environment. In the first 6 months, more than 1,300 companies participated, reaching 63,000 workers. Come hear lessons learned from NYC, and also Pittsburgh and New Orleans about how they are doing the same.

 

arjanna-at-lowlandsArjanna van der Plas is a social impact focused author, yoga teacher and workshop facilitator. She currently spends most of her time in San Francisco’s Tenderloin neighborhood, teaching yoga and meditation at the Healing Well, and writing a book and blog series called Stories Behind The Fog together with the Free Range Puppies. With Stories Behind The Fog she wants to challenge the single-minded view of homelessness by rendering its entire spectrum, one story at a time.

Before Arjanna moved to San Francisco, she was communications manager for the Amsterdam based sustainability startup Circle Economy. Prior to that, she was a lecturer at the TU Delft, innovator at TNO (the largest independent research organization in the Netherlands) and freelance science journalist. Arjanna holds two MSc. degrees from the TU Delft, one in Industrial Design Engineering and one in Science Communications. Follow her on Medium, Linkedin, and Twitter.

SOCAP16 Daily Highlights – Wednesday

September 14th, 2016

socap16_stageWelcome to Wednesday at SOCAP16! Come for breakfast beginning at 7:30 before the morning plenary. Breakfast will be served both in the Festival Pavilion and in the Big Top. Here are a few other selected SOCAP16 activities happening on the Fort Mason campus today that are not to be missed.  

Entrepreneur Pitch Sessions

For the first time at SOCAP, we dedicated an entire afternoon session to hearing from leading social entrepreneurs working globally in the sectors of community development, health, energy, environment, education, and technology. Entrepreneurs are grouped by sector and will present in three different sessions over the course of the afternoon. They will give four minute pitches in Gallery 308 and then move over to the Gallery Tent to continue conversations with potential investors, mentors, supporters and allies.

2:30 PM Community Development and Health

3:45 PM Energy and Environment

5:00 PM Education and Technology

Lunch

Sessions run concurrently throughout the day, each day of the festival. Plan time to eat. Grab a meal between sessions or take food with you as you head to your next panel discussion. Lunch will be served both in Festival and in Big Top between 12 PM and 2 PM.

Ice Cream at the Firehouse

All attendees are invited to stop by the Cowmobile in front of the Firehouse for free Ben and Jerry’s ice cream between 4 and 6 PM today only.  

SOCAP Soirée

Tonight at 6:30 PM in Festival Pavilion join us to celebrate the SOCAP community in style. Acre Gourmet is catering with heavy hors d’oeuvres in California local flavors. DJ Hey Man, aka Darian Rodriguez Heyman, will be spinning tracks to get you dancing, from old school Soul and R&B to Hip Hop and electronic beats.

Faces of Founders Photo and Storytelling Booth

Blackstone Charitable Foundation and Case Foundation invite you to visit their “Faces of Founders” story booth. Today and tomorrow between 9:00 AM and 6:00 PM come to the Faces of Founders SOCAP Photo Booth in the Festival Pavilion to have your headshot taken at no charge. Visit booth 104 in Festival to share your story, have your headshot taken, and show your support for millions of diverse entrepreneurs across the United States.

The Big Top is the Home for Entrepreneurs at SOCAP16

If you are an entrepreneur or want to connect with entrepreneurs at this year’s conference, make your way to the Big Top Tent. The Big Top Tent will be the home of the Innovation Showcase, Entrepreneur Marketplace, and #SOCENT Central. Come in for conversation or a meal, as breakfast and lunch will also served in the Big Top Tent on Wednesday and Thursday.

Entrepreneurs featured in our Innovation Showcase have products and prototypes of their innovative solutions on-site.

Marketplace entrepreneurs will be selling products that improve the environment, communities, and livelihoods.Visit ventures in the Big Top to learn more about the geography where they work, their hurdles to scale, and the impact they’ve experienced while growing their venture.

The #SOCENT Central lounge in the Big Top features a lounge and seating area for conversations as well as profiles of over 150 SOCAP Scholarship Entrepreneurs.

Organize a Community Discussion

Did you know you can convene your own community discussion and post it on Pathable while at SOCAP? If you think we missed anything on the agenda, organize it yourself! Pose an interesting question or timely topic and invite people to join you. Go to the host station at the front of Festival Pavilion to find a time and a place to meet and add it to Pathable.

Welcome to SOCAP16! Opening Day Highlights and Tips

September 13th, 2016

Tuesday, September 12th

Welcome to the 2016 Social Capital Markets Conference.

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SOCAP16, our ninth annual gathering at the intersection of money and meaning, will be our best event to date. The critical conversations begin Tuesday night and continue through the end of the culminating final plenary on Friday. Don’t miss out. Here are a few highlights for the first day:
 

socap15-0426-1Registration

SOCAP16 Registration will be open between 2:00 PM – 8:00 PM on September 13 2016 at Festival Pavilion. Come early to Fort Mason to begin meeting, socializing, and collaborating with other members of the SOCAP community.
 

Getting the Most from Your SOCAP Experience

All attendees are invited to attend a helpful orientation session on the Festival Main Stage at 3 PM, Getting the Most from Your SOCAP Experience. This session will offer an overview of SOCAP16 programming, a guide to the campus, suggested tools to help you navigate, and tips on how to optimize your time at SOCAP16.

 

socap15-0651-1From Local to Global

Do not miss the Local to Global plenary from 4:30 PM – 6:00 PM on the Festival Mainstage. Speakers and panelists will explore how global change is coming through local solutions. From local economics to financial inclusion, to collective capital, place based investing, investing in minority entrepreneurs, and all the other ways innovators are finding global solutions in local communities. The list of plenary panelists includes:

  • Michael Shuman
  • Investors Circle
  • Wash Cycle Laundry
  • Tyler Norris, Kaiser Permanente
  • Hitachi Foundation
  • Ben Jealous, Kapor International
  • Franz Paasche, Paypal
  • Brittney Riley, Village Capital

 

socap15-1294-1Food Truck Party

Tuesday night plan to stick around on campus for the SOCAP16 opening night party 5:30 PM – 8:30 PM. Join us outside Festival Pavilion for an Off the Grid food truck dinner. Eat a delicious meal while continuing the conversations of the day.
 

Highlights Every Day Until Friday

Every day there will be new opportunities to meet, network, collaborate, share, inspire and be inspired by your fellow SOCAP attendees. Check the SOCAP16 blog every morning for daily highlights and Pathable throughout the day to learn more about speakers and attendees, plan your schedule, initiate discussions, and more.

As you review the program and build your own conference schedule, we encourage you to make plans to stay all the way through the end of the very last session on Friday. Conversations that will be building throughout the week, on impact investing, creative entrepreneurship, systemic injustice, inclusion and beyond, will culminate in Friday’s closing plenary.

The final panel discussion is often one of the most powerful and inspiring, as panelists look to the future and consider solutions to systemic challenges, ways we can work to build a culture of equity, and forces that are motivating markets to pursue social and environmental justice.

#SOCAP16

This year we are pushing to bring social entrepreneurship and social impact investing into the public eye through social media. Help us get out the word about the critical conversations that will begin taking place at SOCAP by creating and sharing posts through your social networks.

Please help us amplify the ideas that inspire you or and the calls to action that ignite your passion.

Use the hashtag #SOCAP16 on all platforms to connect your posts to the conversation.

We are active on Facebook [/socialcapitalmarkets], Twitter [@SOCAPmarkets], and Instagram [@SOCAPmarkets]. Follow and connect with us on these platforms to stay in the loop.

Our social media team is going to be on the ground this year, talking to members of the SOCAP community to make sure your voices are heard. Look out for them to share your story.

Impact Unicorns: Can We Have Our Cake and Eat It Too?

September 9th, 2016

A SOCAP Guest Post by Fran Seegull

The term “unicorn” was coined by Aileen Lee of Cowboy Ventures to describe private companies that have achieved a post-money valuation of $1 billion or more. Originally, these companies were scarce, magical and elusive. As of August 31, 2016, according the CrunchBase Unicorn Leaderboards, there are now 191 unicorns.

In my impact investing practice at ImpactAssets and in the graduate class I teach at USC’s Marshall School of Business, I have adapted the phrase. I describe an “impact unicorn” as a company that is positioned to achieve a market rate of financial return AND high levels of impact. Population growth, income inequality, climate change and other social and environmental factors are shaping our world. The private sector has a major role to play (and returns to make) in ameliorating these intractable challenges by investing in ventures that are consistent with our values. Indeed, impact unicorns achieve strong financial returns because of, not in spite of, their impact theses.

The impact investing field has often used the Monitor Institute framework of “impact first” and “financial first” to categorize the investment orientation of companies and funds. While a bit reductive, this framework has persisted since its introduction in 2009. According to it, investments that seek to maximize impact with a financial floor are called “impact first.” Those that seek to maximize financial impact with an impact floor are deemed “financial first.” Implied by this framework is a tradeoff between financial and impact returns. Recent studies from Cambridge Associates, GIIN and the Wharton School of Business indicate that impact-focused venture capital investments can achieve market rate returns. But, what about the measurement of their impact returns? Can investors have their cake (financial returns) and eat it, too (impact returns)?  

Let’s take a look at this framework and determine where Impact Unicorns may fit in a 2×2 matrix. Impact first and financial first as described above are in the upper left and lower right quadrants, respectively, implying a tradeoff. In the lower left quadrant, we have deals with suboptimal financial and impact returns—an investor wouldn’t make these types of investments. In the upper right quadrant, we have those investments that achieve risk-adjusted rates of financial returns and strong social and environmental impact. These are the so-called “Impact Unicorns.”

impact_unicorns_fran_seegull

Over the last five years, as Chief Investment Officer of ImpactAssets, I have had the opportunity to see the impact investing field grow substantially. Many investment funds and impact ventures over time have delivered a very strong combination of financial and impact returns. In building a private debt and equity platform for ImpactAssets, we have largely, but not exclusively, added funds that invest in impact unicorns. These include funds from firms such as Better Ventures, Core Innovation Capital, Elevar Equity, MicroVest, Sarona and SJF Ventures. To bring the impact unicorn to life, let’s explore some examples.

Elevar Equity, from their third venture capital fund, invested in Varthana, an affordable private school finance company in India. Only 260 million of the 400 million school-aged children in India are enrolled in school. Neighborhood private schools are cropping up, but they need growth capital to scale–this is the gap filled by Varthana. Today, Varthana has improved over 2,000 schools, impacting over 800,000 students, exemplifying Elevar’s approach to “human centric venture capital.” While there hasn’t been a realized exit to date, the company has received further financing rounds at increased valuations.

An impact unicorn that has already seen an exit is NexTracker. This company, a DBL Partners venture investee, makes solar tracker systems, serving clients in Asia, Europe, and North and South America. NexTracker sold to Flextronix for $330 million just 21 months after the company’s founding and DBL’s investment.  To date, the company has created 4.8GW of solar energy through its projects, offset 1,226,121 tons of CO2 emissions, powered 920,629 homes and planted 2,465,756 trees.(1)

A portfolio company of Core Innovation Capital is Oportun, which uses alternative credit scoring methodologies to reveal the debt worthiness of those unserved or underserved by the traditional banking sector. As of June 30, 2016, Oportun has deployed $2.6 billion in loans to over 770,000 people, mostly to low-to moderate-income clients. The company has received over $265M of equity funding through lead venture capital investors such as Charles River Ventures and Madrone Capital Partners.(2) Last year, the Wall Street Journal suggested that the firm could be worth close to $1B should it pursue an IPO.(3)

While these are strong impact unicorn examples, the truth is many times as investors we can’t have our cake and eat it too. There may be some investments focused on high impact geographies (emerging and frontier markets), certain investment stages (seed- and early-stage entrepreneurs in the “Pioneer Gap”) and specific constituencies (folks at the bottom of the pyramid) that require a tradeoff in financial returns. Maybe these impact enterprises need grant capital at inception or perhaps they require concessionary funding to de-risk them to a point where more commercial rate capital can be attracted. And it must be said that impact unicorn enterprises aren’t unequivocally better than, say, impact-first ventures. But they do indeed fly in the face of the financial tradeoff debate.

Please join us at SOCAP on Wednesday, September 14, at 10:45am where we will discuss: “Impact Unicorns:  Can We Have Our Cake and Eat It Too?”

Find all of the SOCAP16 sessions Fran Seegull is participating in on Pathable. She tweets on impact investing @franseegull.

fran-seegullFran Seegull is Chief Investment Officer and Managing Director at ImpactAssets—a non-profit investment firm seeking to increase the flow of capital to impact investing. She oversees firm product development and heads investment management for The Giving Fund—an impact investing donor advised fund. Seegull is Adjunct Professor at the Lloyd Greif Center for Entrepreneurial Studies and Senior Fellow at the Brittingham Social Enterprise Lab, both at USC’s Marshall School of Business. She serves on the board of the Barbara Lee Family Foundation and the Investment Committee of the Goldhirsh Foundation and served on the G7 Social Impact Investment Task Force Working Group on Asset Allocation. She tweets on impact investing at @franseegull.

 


Article Sources:

  1. “NEXTracker Company Profile.” NEXTracker. https://www.nextracker.com/company/.
  2. “Oportun: About Us.” Oportun. http://www.oportun.com/about-progreso/.
  3. Demos, Telis. “Hispanic Community Lender Oportun Planning 2015 IPO.” Markets. The Wall Street Journal, 24 Apr. 2015. Web. http://www.wsj.com/articles/hispanic-community-lender-oportun-planning-2015-ipo-1429910554.