Financing transitions to employee ownership to deliver wins for workers and investors. It’s the age-old struggle: labor and capital are often at odds in the workplace and the financial markets. Case in point: the strike against the Big Three American automakers, which has raised anxiety in political and financial circles. Conversely, the alignment can be powerful when empowered workers have a meaningful stake in their companies’ long-term success. This week’s Agents of Impact Call features investors who are betting that worker ownership is not only good for labor, it’s good for capital, too. “Mosaic’s exclusive focus on employee ownership provides an attractive differentiation in a crowded lower middle market,” says Ian Mohler of Charlotte-based Mosaic Capital Partners, which helps companies transition to employee stock ownership plans, or ESOPs, a time-tested method of employee ownership. As many as three in five businesses in the US will seek a sale in the coming decade, driven by a “silver tsunami” of older owners in search of succession plans. Featured on this week’s Call:
Dealflow: Financing Farmers
Complete Farmer nets $10 million to connect Ghana's farmers. Complete Farmer started as a "crowdfarming" platform to connect Ghana's smallholder farmers to funders. It has grown into an agri marketplace so farmers also gain access to inputs, advice and markets. Its pre-Series A equity round included $7 million from Acumen's Resilient Agriculture Fund, or AFAF, Alitheia Capital, Proparco, VestedWorld and DP World. Sahel Capital,AlphaJiri Investment Fund and Global Social Impact Investments provided $3.4 million in debt.
Impact Voices: Policy Corner
Policy tailwinds can buoy investments, but impact relies on business innovation. Venture firm Impact Engine has seen the positive and negative impacts of regulation on its portfolio this year. “Government policy can act as a headwind or a tailwind to impact investments, and this is even more noticeable at times when the capital markets themselves are challenging,” Impact Engine’s Roger Liew writes in a guest post on ImpactAlpha (listen to Impact Engine’s Priya Parrish podcast conversation, “Scaling purpose-built impact”). For example: Workit Health helps people recover from addictions, including by prescribing medication via its online portal. During the Covid pandemic, the Drug Enforcement Administration loosened restrictions on prescriptions via telemedicine. That policy was reversed in February. Liew says the move hurts rural populations and people in crisis, as well as Workit’s business. On the flip side, solar subsidies in the Inflation Reduction Act benefit PosiGen, a developer of affordable solar power. “As with Workit, we invested in PosiGen before the legislation, because we believed in the economics of the business,” says Liew.
Agents of Impact: Follow the Talent
Don’t miss these upcoming ImpactAlpha partner events: