By Yuliya Chernova:
Two early investors in Tesla Motors Inc.TSLA +1.86% teamed up and raised a $400 million venture capital fund to back startups that have a positive social or environmental impact, Venture Capital Dispatch has learned.
Nancy Pfund and Ira Ehrenpreis are headlining the fund, which is part of San Francisco venture firm DBL Partners.
“Who cares about sustainability issues? Just people like Elon,” Ms. Pfund said about Elon Musk, chief executive of Tesla. Mr. Musk and others like him “debunked the notion of a trade off” between making money and improving society, Mr. Ehrenpreis said.
More high-quality entrepreneurs are starting mission-driven businesses, he said. At the same time, a new generation of consumers cares more about who is involved in making products and how a company makes a product or service they pay for. As concepts such as fair trade and transparent supply chains are becoming increasingly important to businesses, Ms. Pfund said, such impact investing makes more sense.
Ms. Pfund spun DBL Partners out of J.P. Morgan & Co. in 2008 and raised a $150 million fund in 2010. DBL and its predecessor fund, J.P. Morgan Bay Area Equity Fund, invested early in companies such as Elon Musk’s Tesla and Space Exploration Technology Corp., or SpaceX, as well as SolarCity Corp.SCTY –0.09%, where Mr. Musk is chairman. DBL also backed online radio company Pandora Media and solar project developer Powerlight Corp.SPWR –0.38%, now part of SunPower Corp., among others.
DBL’s definition of social impact is open-ended, from a commitment to diversity–three of the five startups the new fund already backed are founded by women, for example, to producing clean energy, to enabling reuse of materials in a supply chain, to creating employment in economically depressed locations.
To read the full article, visit the Venture Capital Dispatch-WSJ.