2030 is the new 2050 as countries and companies compete on climate ambitions. Call it The Great Acceleration. Goals for cutting carbon emissions that seemed ambitious when the Paris Agreement was forged six years ago have become passé even before they've been achieved. Net-zero by 2050 no longer impresses. This Earth Day is marked by the confluence of a rising climate emergency with falling costs for renewable energy, battery storage, electric vehicles and other low-carbon solutions. Leaders in the low-carbon transition now have to show dramatic results – by 2030. That has flipped climate action from being a drag on financial performance and economic growth to being its main driver – and a competitive business and national advantage. “It's not about 2050,” said President Joe Biden’s climate change adviser Gina McCarthy. “It's about what we do in the next decade.”
Dealflow: Follow the Money
Misfits Market raises $200 million to sell 'ugly' fruits and vegetables. The raise brings funding for the New Jersey-based food startup to $301.5 million and pushes its valuation north of $1 billion. Misfits multiplied its customer based and order volume by five last year, shipping 44 millions pounds of food. In January, its food reuse peer Imperfect Foods raised $95 million. Investors are eyeing the $14 billion annual investment opportunity in halving U.S. food waste. Accel and D1 Capital led Misfits' round. Valor Equity Partners, Greenoaks Capital, Sound Ventures, Third Kind Ventures and others also participated.
Signals: Ahead of the Curve
Fifteen startups offer solutions for land restoration in Latin America. Latin America a testing ground for innovative environmental financing and business solutions: Lending incentives supporting smallholder farmers. Partnerships with Indigenous communities on forest restoration. Carbon credits for Amazon restoration. And pay-for-success forest conservation. Fifteen entrepreneurs in the first Latin American cohort of the World Resources Institute’s Land Accelerator are rolling out solutions to restore 50 million hectares by 2030 (see, “Land Accelerator helps close financing gap for African soil startups”).
Agents of Impact: Follow the Talent
ISF Advisors is hiring a project manager and an investment associate… Lowercarbon Capital seeks a synthetic biology associate… Great Lakes Protection Fund is looking for a project development manager in Evanston, Ill.
ImpactAlpha, March 1 – Capital is flowing to climate solutions. Climate bonds have topped $1 trillion. SPACs, or special purpose acquisition companies are …
ImpactAlpha, January 6 — A few of the keywords thrown around on last month’s Agents of Impact Call No. 26: accountability, electrification, institutional, …
The people and principles needed to solve the challenges of financing solar power for frontline health clinics were represented on ImpactAlpha’s Agents of …
“It’s a great time for new entrants, but for those of us who’ve been doing this for a while it is equally urgent to raise our game right and to not get complacent,” said Margot Brandenburg of the Ford Foundation.
ImpactAlpha, Apr. 30 – The first annual assessments of impact investors are coming in under the International Finance Corporation’s Operating Principles for Impact …
ImpactAlpha, February 5 – Small and growing businesses are the pillars of local economies, in both developed and developing economies. Startups are engines …
ImpactAlpha, April 19 — The case for breaking down philanthropy’s historical divide between the investment side of the house and a foundation’s mission …
ImpactAlpha, April 12 – Tiffany Manuel’s handbooks for social change warn about messaging “backfires.” These days, she’s wielding such tools to overcome backlash. …
Host Brian Walsh dissects former BlackRock exec Tariq Fancy’s recent takedown of ESG investing with roundtable regulars Imogen Rose-Smith and David Bank.
ImpactAlpha, Mar. 29 – Money managers at the world’s sovereign wealth and pension funds and university and foundation endowments seek to optimize portfolios to …
Host Monique Aiken, Erika Seth-Davies of The Racial Equity Asset Lab and ImpactAlpha’s David Bank join to talk about the American Rescue Plan and… a bottom-up reconstruction.
Rodney Foxworth, CEO of Oakland, Calif.-based Common Future, gets personal in conversation with host Monique Aiken in the latest episode in The Reconstruction, …
Can community development financial institutions be anti-racist? Don’t answer too quickly. For those familiar with the history of CDFIs, specifically created to align …
ImpactAlpha, March 24 – Field drones. Harvesting robots. Big Data-driven farm insights. Innovative technological applications in agriculture can have a profound impact on farmers’ …
The recent events at Danone have raised critical questions about the evolution of capitalism. Activist hedge funds, stating a concern for maximizing shareholder …
ImpactAlpha, Apr. 9 – The entrepreneur and investor’s answer to systemic economic exclusion of Black, Indigenous and other people of color: Build an ecosystem …
ImpactAlpha, Apr. 2 – The co-founders of South Los Angeles-based electric-vehicle charging repair startup ChargerHelp could be on a poster for the Biden administration’s …
ImpactAlpha, March 26 – Venture capitalists love to invest in disruption. Arlan Hamitlon is disrupting venture capital. She created Backstage Capital in 2015 …
ImpactAlpha, Mar. 12 – At 31, Brian Deese helped plan and execute then-President Obama’s auto industry bailout. As the White House’s top climate official …
ImpactAlpha, Mar. 5 – Seven-time entrepreneur-turned-investor Kim Folsom is seeking to bridge a massive gap: financing for the millions of U.S. businesses that don’t …
ImpactAlpha, Feb. 19 – The former Hollywood super agent spotted a disconnect. Those green-lighting movies and TV didn’t represent the diverse audiences consuming them. …
ImpactAlpha, Feb. 5 – Ngozi Okonjo-Iweala has a warning for nations prioritizing self-interest in their pandemic responses: “No one in the world can be …
In a star-studded inauguration featuring Lady Gaga and J-Lo, the 22-year old poet stole the spotlight at president Joe Biden’s inauguration. Accolades poured …
Bryce Roberts and Tim O’Reilly: VCs that help startups raise revenues, not rounds
The team at
ImpactAlpha
New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.
New Revivalists: Bryce Roberts and Tim O’Reilly, co-founders, Indie.vc. Place: San Francisco Bay Area The approach: “It’s not how fast you grow, but can you grow sustainably. This focus on operating businesses that make early revenue is a really fresh idea in Silicon Valley. But it’s a really old idea in the real world.” Follow: @bryce and @timoreilly
In an age of bloated venture capital funds and startups that are long on valuations and short on profit models, investor Bryce Roberts and media entrepreneur Tim O’Reilly are getting back to basics.
Through an approach they dubbed Indie.vc, Roberts and O’Reilly are surrounding founders with the resources and networks that other VCs offer, but without the baggage and sky-high expectations. The team has backed 16 firms with investments of between $100,000 and $500,000, with a focus on customers, cash flow and sustainability rather than future mega-funding rounds.
The investments are executed through O’Reilly AlphaTech Ventures (OATV), the pair’s venture capital firm, which is applying the Indie.vc approach in its fourth fund. ImpactAlpha caught up with Roberts and O’Reilly to talk about their unconventional approach to investing in and building companies, and why they burned that unicorn head.
Bryce Roberts and Tim O’ReillyImpactAlpha: What is indie.vc?Roberts: We think of it as a style of investing, versus a fund. It’s similar to when we started OATV back in 2005 to do very early-stage investing. Seed investing wasn’t a term, but we gave it meaning. Indie.vc is a way and a strategy of funding companies, rather than an entity. We invest out of OATV Fund IV, but indie.vc is the style of investing.With our first pilot, we wanted to try out the type of investing and messaging. In 2015, we made eight investments of $100,000 each [out of Fund III]. Given the response to the initial experiment, in terms of interest from companies as well as results, we decided to shift all of our focus to doing indie.vc investments in Fund IV.ImpactAlpha: What’s the idea behind the indie.vc style?O’Reilly: We have to refocus the entrepreneur on something that has been lost on so many Silicon Valley businesses: you are trying to build an operating business. There’s only one type of company that Silicon Valley has been funding — swing for the fences, we’re going to get big or go home. That means a huge number of really interesting companies don’t get funded.Roberts: There are so many entrepreneurs who enjoy playing the game of entrepreneurship. This is a way to reward people who are building real things.O’Reilly: Right. There are a lot of people for whom raising money is their business. That’s wrong. What’s so beautiful about what Bryce is doing is, he’s teaching them, it’s not about how much you raise, it’s about how little. It’s not how fast you grow, but can you grow sustainably. This focus on operating businesses that make early revenue is a really fresh idea in Silicon Valley. But it’s a really old idea in the real world.>>MORE: WTF? Programming the master algorithm for the future we want (podcast)ImpactAlpha: What types of companies do you look for? Is there a typical profile?Roberts: The most concrete factors are post-revenue; an aversion to or a chip on their shoulder about VC in general; and in a market where there is real leverage from technology. We’ve invested in everything from hardware to entertainment to media to consumer companies.Interestingly, six of the eight companies from our original pilot group were founded by female entrepreneurs, two of whom are black. Of the 16 companies we’ve now funded through our Indie.vc program, over 50% are led by female founders. This isn’t something we anticipated, but there’s something about our model that resonates with underrepresented founders who’ve not found support or funding from traditional VC sources.ImpactAlpha: What is a successful outcome for you? What kind of ‘exits’ do you look for?Roberts: We’re structured to recognize success in an investment in the same way an entrepreneur should recognize success in their companies. They can get rich off of cash flow and become profitable. We’re also set up to be able to make money if they sell or go public. If they haven’t raised money or sold the business by the end of three years, we do a revenue share, anywhere from 1% to 5% of revenue. We keep that optionality in alignment with entrepreneurs.ImpactAlpha: What opportunity do you see that other investors don’t?Roberts: By nature, VCs move in herds. They tend to pile into a category, overfund it, wait for the winner to appear to be in a position to take-all and move on to the new next thing. But if you look at some of those categories that become overfunded or suddenly fall out of favor, like on-demand services, there’s still a lot of learning going on in the second and third generation of companies.O’Reilly:Fohr Card is a good example. A social media agency is not a typical Silicon Valley candidate. But Fohr Card [a portfolio company] is a great operating company. They were doing a couple hundred thousand (dollars in revenue) when we started working with them two years ago. Two years later, they finished 2017 with $7 million in revenue. The Shade Room, another portfolio company, was doing less than $10,000 a month when we began working with them. They now have a substantial “seed rounds” worth of cash in the bank that they generated from their own profits.ImpactAlpha: What’s with the burning unicorn head?Roberts: That used to be the entirety of our web site! We did it with tongue firmly in cheek. But it’s become somewhat of a mascot for founders forging companies on their own terms. Entrepreneurs need to recognize that there are other paths available for building something of impact than the blitzscaling model of Silicon Valley VCs.Sometimes, the worst things can happen when you are trying to grow so fast, when you worship at the altar of scale. Look at Uber, SoFi, and a number of others this unicorn culture has created. It’s really hard to create something in that unicorn mold that is not rotting a little bit. The burning unicorn head is a way of saying we want to embody values other than the growth-at-any-cost model and show that there’s a different way to build a real business.
ImpactAlpha, April 20 – A new fund in Canada is aiming to impact marginalized Indigenous communities by channelling capital to Indigenous-owned financial institutions. The …
ImpactAlpha, April 19 — The case for breaking down philanthropy’s historical divide between the investment side of the house and a foundation’s mission …
ImpactAlpha, April 12 – Tiffany Manuel’s handbooks for social change warn about messaging “backfires.” These days, she’s wielding such tools to overcome backlash. …
ImpactAlpha, Apr. 9 – The entrepreneur and investor’s answer to systemic economic exclusion of Black, Indigenous and other people of color: Build an ecosystem …
ImpactAlpha, Apr. 2 – The co-founders of South Los Angeles-based electric-vehicle charging repair startup ChargerHelp could be on a poster for the Biden administration’s …
ImpactAlpha, April 22 – Latin America a testing ground for innovative environmental financing and business solutions: Lending incentives supporting smallholder farmers; partnerships with Indigenous …
ImpactAlpha, April 19 – Helsinki-based Carbo Culture converts wood chips and other biomass into stable biocarbon that the company says can lock carbon away …
ImpactAlpha, April 16 – JPMorgan Chase and Citi – the biggest bankrollers of fossil fuels – unveiled new trillion-plus targets for sustainable financing …
ImpactAlpha, April 13 – The two powerhouse asset managers are teaming up to invest in late-stage venture capital and early growth-stage private equity …
ImpactAlpha, April 12 – Energy-transition investment surged by 24% in developed nations last year. In emerging markets strained by the COVID pandemic, it …
ImpactAlpha, April 9 – With backing from 100 global institutional investors, Global Renewable Power Fund III will take advantage of what BlackRock sees …
ImpactAlpha, April 8 — Boston-based Clean Energy Ventures invests in clean energy technologies that can eventually displace 100 million tons of CO2 emissions …
ImpactAlpha, April 6 — Green hydrogen, produced with renewable energy through a chemical process called electrolysis, could provide a source of clean fuel …
ImpactAlpha, April 12 — Career impact bonds are bringing income-share agreements, which dozens of universities are using to provide help to low-income students …
ImpactAlpha, Apr. 6 – Investors willing and able to prioritize impact over financial returns were behind some of today’s highest-impact innovations. Catalytic investment strategies, …
ImpactAlpha, March 23 – Policy makers are embracing bottom up strategies to address interlocking challenges if COVID-19, inequality and racial justice. The $1.9 …
ImpactAlpha, March 8 – SunFunder’s Solar Energy Transformation Fund backs solar companies improving energy access across Africa and Asia. The off-grid solar finance company’s …
ImpactAlpha, March 4 – The lending program, mostly moribund for the past four years, “is back in business,” declared Energy Secretary Jennifer Granholm. …
ImpactAlpha, Feb. 25 – Philanthropic foundations tend to be cautious and slow-moving beasts. One signal of the urgency of the current moment: the billion-dollar …
ImpactAlpha, Feb. 24 – Worker ownership. Small business relief. Impact real estate. Climate solutions. This year’s Impact Assets 50 showcases a diversity of …
ImpactAlpha, Feb. 11 – Change the incentives, change the results. Those results are dramatic for the $11.5 million in loans that agricultural lender Root …