Northwest Social Venture Fund: Impact Capital: New Frontiers for Investors, March 2015
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The Northwest Social Venture Fund is a Series A venture capital fund that aims to alleviate global problems through social entrepreneurship and impact investing. It grew out of the Social Venture Society think tank. The fund evaluates 40-80 companies per month and sees trends of nonprofits converting to for-profit models to raise capital, and for-profits rebranding as impact companies. Impact investing is growing, but some potential investors remain hesitant. The fund highlights the eNABLE nonprofit that provides 3D printed prosthetics at low cost, and InStove, a nonprofit converting to for-profit status to better scale its improved cookstove technology. There remain gaps in the impact investing landscape that the fund hopes to address
Northwest Social Venture Fund: Impact Capital: New Frontiers for Investors, March 2015
- 1. Impact Capital: New Frontiers for Investors
- 2. Northwest Social Venture Fund Our mission is to alleviate global suffering through scalable social entrepreneurship & impact investing -We are a Series A Venture Capital Fund, part of the White House Grand Challenges initiative, like Gates Foundation, to tackle ambitious & achievable goals to address & resolve global problems -Our work has been featured by Forbes, GeekWire, Wall Street Journal, Sustainable Business Oregon, KATU, Portland Business Journal. We grew out of a thinktank for social impact, the Social Venture Society. -In 2012 we participated in the White House Business Council for American Economic Competitiveness, and in 2013 the SBA and TechStars' Global Accelerator Network recognized us as one of the top 16 accelerators in the US.
- 3. Key Industry Trends Each month we evaluate 40-80 companies, and connect with colleagues and partner organizations. Here are some main trends we are seeing: -Nonprofits with scalable tech are converting to for-profit model and raising private capital -Forprofits with strong impact are rebranding as impact companies and raising impact capital -LPs, philanthropists & angels have a strong desire to do impact deals, but there is a lot of fear & "wait & see" to overcome
- 5. Leap of Faith vs Jump off Ledge • Every time you do a business deal, you have to take a leap of faith: • What is the likelihood of success? Is it substantially more than the likelihood of failure? • How do the #'s stack up? Is there bad data, no data, or good trending data? • Do I trust the key players? Are there any serious red flags? Have I taken the time to do enough due diligence? • Can I afford to lose if things go south, and am I ready and excited to win, if things go well? • Risk begets reward - no risk, no reward. You have to have a personal vision for the reward outcomes, financially + impact, to take next steps as an impact capitalist.
- 6. Industry Data • Stanford Social Innovation Review: Case Foundation Research • 2014 Year of Impact Predictions: Capital will 2-3x by 2017 • State of CA, OR, MA Treasurers, Calverts Foundation, Capricorn, Meyer Memorial Trust, Seattle Impact Investing Group, Mercy Corps • YCombinator, TenX, PIE accepts nonprofit teams • Accelerators & Competitions focused on Impact: Fledge, Social Venture Partner's Fast Pitch - Seattle, Los Angelos, Portland • HIP, GIIRS, B Labs, Nonprofit Finance Fund providing metrics frameworks to measure, track, report on impact • B Labs: New Seasons grocery bag has B Corp label, law firm Immix is a B Corp, benefit corp legislation in Oregon started 2014 with 29+ new benefit companies in Portland • Hub Network: Seattle, San Francisco, Los Angeles, Boulder
- 8. eNABLE: 3D Printed Prosthetics
- 9. eNABLE: Business Case -640 Volunteer Engineers + 50 new/week -Can provide better functionality and drop price point from $20K-$40K to $50 COGs + donated labor + give product away -Capturing innovation wave of commercially available 3D printing marketspace Nonprofit model: have to raise $1.75MM from donors in order to distribute 1,000 and employ 6 people Forprofit model: Can distribute 10,000 and employ 10 people by generating $1MM in revenues
- 10. SVFund Capacity Model Metrics for Pre-$1MM Teams
- 11. Dependency Model: MVP through Series B
- 12. Self Sustaining Model: MVP through Series B
- 13. InStove: NP - FP Conversion
- 16. Landscape of Impact Funds Ecotrust - Natural resource, asset-based impact fund Rogue Ventures - VC, Oregon based Revenue Capital Management - rev-based financing, not impact-oriented Reference Capital - NW-based, environmental Oregon Angel Fund - smaller amounts ($250K-$750K), not impact targeted. Portland Seed Fund - seed capital ($18K-$25K), not impact targeted Equilibrium Capital - OR based, asset-based impact fund focused on clean tech/ sustainability Women's Venture Fund - OR/CA based, focus on funding women-led startups University Impact Fund - in another market (SLC) Unitus Impact - Base of pyramid livelihood development overseas (India, Indonesia) Grameen Ventures - Overseas, BOP focus (SEA/DC based) Moksa Ventures - not social, game based; in another market (Denver/Boulder/SLC) Mercy Corps Seed Fund - in another market (overseas - Egypt) Mercy Corps Social Venture Fund - grant-based R&D funding for internal ventures
- 17. Gaps in Impact Landscape: (Our To Do List) • Impact CEOs able to raise private capital • Private investors ready to do impact deals • Foundations ready to invest in imp funds • Technologists with Impact + Capital Skills • Fund Managers ready to run imp VC and seed funds to syndicate deals • University, govt, & NGO partners to help scale impact products & services
- 18. Impact Capital + You How can you individually and as a network, take that leap of faith to leverage capital for impact? carolynn@nwsvf.org @SVSociety www.nwsvf.org