A New Inning For Impact Investing

Forbes
April 27, 2015

By Jean Case, Con­trib­u­tor: For years, a nascent move­ment led by pas­sion­ate pio­neers out to change the world has been slow­ly but sure­ly tak­ing shape. Qui­et­ly, these ear­ly fear­less lead­ers have been cham­pi­oning the idea that busi­ness­es can be a tool for social good, beyond the jobs that they cre­ate. Specif­i­cal­ly, they’ve been build­ing the move­ment for a new class of investors and entre­pre­neurs to lock arms and build com­pa­nies that pro­vide prod­ucts and ser­vices that address daunt­ing social chal­lenges, and gen­er­ate a finan­cial return for investors. These com­pa­nies are found in many sec­tors, includ­ing large mar­kets such as edu­ca­tion, ener­gy, trans­porta­tion and health­care that are ripe for dis­rup­tion.

It’s still ear­ly days. But as I’ve observed the incred­i­ble trac­tion and momen­tum in the impact invest­ing move­ment over the last 12 months, at this time of year, I can’t help but be drawn to a base­ball anal­o­gy. From my per­spec­tive, the impact invest­ing move­ment has until recent­ly been in spring train­ing. As we look at how the move­ment has advanced par­tic­u­lar­ly in the past 12 months, I do know that the reg­u­lar sea­son is now well under­way – and while we may still be play­ing the ear­ly innings, a game is now in progress, and it has been a remark­able year of ear­ly home runs.

{…}

All-Star Line­ups Are Form­ing

A grow­ing num­ber of wide­ly respect­ed pri­vate investors have made impor­tant bets on social enter­pris­es in the past year. Bill Gates, Evan Williams, Reid Hoff­man and oth­ers invest­ed in the lat­est round for Change​.org. Gates, Desh Desh­pande, Jim Sorensen and oth­ers invest­ed in the India-focused Uni­tus Seed Fund. Marc Andreessen, who once said he would “run scream­ing” from a B Corp, invest­ed in Alt School, which is, you guessed it, a B Corp.

They join pio­neers like Vin­od Khosla, who has been invest­ing in impact com­pa­nies for a num­ber of years and Nan­cy Pfund, founder of ven­ture cap­i­tal fund DBL Investors, who saw ear­ly suc­cess in two of her “dou­ble bot­tom line” investments—SolarCity and Tes­la Motors— both of whom went pub­lic. Her port­fo­lio also incud­es com­pa­nies like Rev­o­lu­tion Foods, Eco­log­ic and FivePrime. While DBL only invests in com­pa­nies with the poten­tial to gen­er­ate prof­its, investees must also iden­ti­fy their social goals and report on progress twice a year.

To read full arti­cle, vis­it Forbes.