The Brief | October 22, 2018

Best-in-class impact talent, opportunity zone rules, Runway Project takes off, green bonds in Taiwan, Amazon backs Closed Loop

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Greetings, ImpactAlpha readers!

Featured: Impact Voices

Finding best-in-class impact investing talent. Kate Shattuck, who heads the impact investing practice at the executive search firm Korn Ferry, helped anchor ImpactAlpha’s popular “Get a job!” conference call last month. To follow up, we asked her what she’s seeing in the marketplace for impact talent. “We have observed a thinning of the talent pool,” Shattuck writes in a guest post. Companies are willing to provide technical training for junior roles, but less so at senior levels, she says. “We are finding hiring managers and CEOs looking for deep technical experience, specific deal size or stage and sometimes a specific geographical orientation.” Despite a large number of applicants, she says, “We are seeing organizations facing significant challenges in recruiting leaders with the appropriate level of experience, presence, and communications skills.”

The strongest candidates have the kind of collaborative mindset that comes from crossing sectors and boundaries. “Think business and government or finance and social enterprises,” Shattuck writes. “We are finding great candidates also show higher levels of learning agility, since many firms’ impact investing practices are still entrepreneurial ventures that must adapt to changing conditions.”

Read, “Finding best-in-class impact investing talent,” by Korn Ferry’s Kate Shattuck on ImpactAlpha.

Dealflow: Follow the Money

Taiwan green bond will fund island’s clean-energy shift. French bank Societe General issued the first green bond denominated in Taiwan dollars and the first by a foreign bank on the island. A total of $389 billion in green bonds have been issued worldwide, but 75% of them have been issued in just three currencies. Proceeds from Societe General’s TW$1.6 billion ($51.7 million) bond will fund renewable energy projects in Taiwan, which is aiming to boost its share of renewable power generation to 20% by 2025. Check it out.

Amazon puts $10 million into Closed Loop Fund to improve recycling. Amazon joins Nestlé, Coca-Cola, Johnson & Johnson, Unilever and other corporates in Closed Loop’s initiative to improve recycling and cut manufacturing waste. Closed Loop Fund aims to invest $100 million by 2020. The fund has invested in 14 companies since 2014. Here’s more.

Ignitia’s hyper-local weather forecasts for small farmers gets early backing. The Swedish startup has raised $1.1 million for its SMS-based weather service for smallholder farmers. Ignitia partners with telecom companies to gather satellite data to produce “hyper-local” tropical weather forecasting for 450,000 smallholder farmers in Ghana, Nigeria and Mali. Funding came from Hack VC, FINCA Ventures and the Norrsken Foundation. Dig in.

Please send deal news and tips to [email protected].

Series: New Revivalists

Jessica Norwood: ‘Believe in you’ money for black entrepreneurs. Norwood didn’t set out to create a new kind of loan for black entrepreneurs. Exploring the persistent racial wealth gap, she zeroed in on the low rates of business startups among African-Americans. Chief among them: a lack of the kind of early “friends and family” capital that is key to getting such businesses off the ground. A typical business needs about $30,000 to get off the ground; average black household wealth is about $11,000. “People said, ‘You’ve named a big problem. So what are you going to do about it?’” Norwood told ImpactAlpha. The Runway Project has raised $1 million and funded nine entrepreneurs in Oakland, Calif., with five-year, low-interest, no-collateral loans. Norwood now has her sights set on a $10 million fund to expand The Runway Project to three more cities – and tackle the challenge of follow-on funding. Share this post.

  • Norwood is among the headliners at tonight’s COCAP in Oakland. The theme is “Closing the racial wealth gap.” Register now.
  • Take a spin through all of ImpactAlpha’s New Revivalists.

Signals: Ahead of the Curve

Opportunity zone regulations could spur small business investing. Impact and community investors have been pushing for federal rules to ensure opportunity zone investments drive improvements and wealth creation for residents of the zones. The two fronts: encouragement for investment in small business; and basic data reporting and transparency. Long-awaited rules released by the U.S. Treasury on Friday showed progress on the small-business front. On impact reporting, not so much. (Want to parse the regs for yourself? Have at the proposed regulations and revenue ruling, and let us know what you think.)

  • Tangible assets. Last year’s tax bill requires 90% of opportunity fund assets to be invested in qualifying property, including businesses. The new regulations say an opportunity zone business must have at least 70% of its tangible property within a zone. John Lettieri of the Economic Innovation Group, which helped develop the legislation, called that a positive first step. Businesses may hold working capital for up to 31 months, as long as they have a plan to use the capital. The ruling, “opens up significantly the kind of businesses to invest in,” tweeted Village Capital’s Ross Baird.
  • Impact reporting. The regulations don’t require any sort impact or data reporting. Also missing: Guidance on the tax treatment of interim gains reinvested by opportunity funds. Extending the capital-gains tax relief for such interim gains has been seen as friendly to business investments.
  • Explainers. Check out analyses from The National Law Review, Novogradac & Co and Stroock.

“The real success of Opportunity Zones comes down to the people who decide to develop and implement funds themselves, and the values they bring to it,” Baird tweeted. A second tranche of rules is expected by year’s end. Share this post.

Agents of Impact: Follow the Talent

Black tech publication ThePLUG, founded by journalist Sherrell Dorsey (an ImpactAlpha contributor), is among the 2019 class of The Information Accelerator… Bloomberg Philanthropies’ climate-change documentary “Paris to Pittsburgh” will premiere on National Geographic Dec. 12… San Diego Grantmakers, which houses the San Diego Impact Investors Network, is looking for a CEO… The Community Forward Fund Assistance Corp. in Toronto is seeking a commercial lender.

October 22, 2018.