ImpactAlpha, Sept. 11 – The co-founder and managing director of SJF Ventures still had half of the firm’s $125 million fourth fund when COVID shutdowns shut down business as usual. Kirkpatrick and team drew on two decades of relationships to identify companies offering solutions to people working remotely, shopping more consciously for food, seeking gainful employment and looking for alternatives in education and healthcare.
SJF’s investment this week in solar software company Terabase was the firm’s fourth since the onset of the pandemic. Others include food logistics company Perishable Shipping Solutions, pasture-raised chicken company Cooks Ventures and Springboard, an online learning platform. In July, SJF’s portfolio company Vital Farms IPO’d on the Nasdaq, becoming one of the first public benefit corporations and B Corps to go public.
“We know that impact and financial returns can be aligned and accelerate one another mutually,” Kirkpatrick tells ImpactAlpha.
Kirkpatrick, who has raised four funds totaling $260 million, is a founder of the Impact Capital Managers network, which champions an ‘impact alpha’ thesis of high returns and high impact (see, “‘Impact alpha’ fund managers seek co-investors to scale impact investing“). The network’s 52 members manage more than $11 billion in assets.
Kirkpatrick’s pursuit of best-in-class founders in high-impact sectors has led SJF to deals in Youngstown, Ohio; Austin, Texas; St. Louis, Mo.; Richmond, Va., and other startup cities between the coasts. “The rest of the country probably doesn’t expect they’re going to get equity capital, so they figure out other ways to build reasonable businesses,” he says.
Kirkpatrick says investors now need to go deeper to “bend the curve” on impact. That will involve investors engaging policy, boosting diversity and building new skill sets. “If we could have gotten 5x financial and 5x impact, how can we get 10x impact with 5x financial?” he asks. “It’s going beyond the core impact alpha thesis.”