Good Friday evening, ImpactAlpha readers!
#Featured: The Brief’s Big Eight: Own Your Impact Edition
1. SteveCase walks back his comments to The New York Times — onImpactAlpha. “I wanted to set the record straight: I absolutely believe that impact investing can produce the same sort of market returns that other types of investing can achieve,” Case writes in his first ImpactAlpha post. The AOL founder and Revolution VC chairman said his new $150 million Rise of the Rest fund is aimed at “leveling the playing field, so everybody, everywhere has a shot at the American Dream.” But he says Rise of the Rest can’t claim “impact” because it won’t measure or report social outcomes, at least initially. “Right now, we are focused on the most immediate problem: getting capital moving — quickly — to startups that need investment to get off the ground.” Read “How Rise of the Rest will have impact — and why it’s not an impact fund,” by Steve Case, only on ImpactAlpha.
2. Impact investors urged Case to embrace impact, not run from it. Case told the Times, “We actually didn’t position this as an impact fund. First and foremost, our goal was to generate top returns.” That got a rise from proponents who say measuring impact need not dim financial performance, and could enhance it. ”So why not ensure that good quality jobs materialize? That wealth trickles down to employees and communities?” Ben Thornley, a managing director at Tideline, asked on ImpactAlpha. In not owning impact, Thornley says, Case “missed an opportunity to educate a tremendously influential group of business leaders.” Read Thornley’s full response.
3. Impact investors call out tax cuts that worsen income inequality. Impact investors are speaking out about what ImpactAlpha’s David Bank called the elephant in the room. “Now is not the time to avoid staring at the smash-and-grab-the-cash job happening right in front of our eyes at the hands of the Trump/GOP tax plan and acting like impact investing, or anything else besides winning elections, is going to fix it.” Encourage Capital’s Jason Scott said after mouthing off at a Financial Times conference. Adds Nonprofit Finance Fund’s Antony Bugg-Levine, “Without a national commitment to the principle that we have an obligation to take care of each other, manifested through progressive taxation, there will be little that impact investors can do that is meaningful.” Don’t be complicit.
4. Likewise, investors need to talk about why they’re investing in women.System-change requires a shift in cultural norms. Suzanne Biegel has a smart take on why some venture capitalists talk about gender and others don’t. “The only way we’ll accelerate the movement of capital at scale is by building an evidence base and normalizing the notion that investing in women is smart at all levels of the financial system,” Biegel says. Three reasons to own your gender lens.
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5. Inequality makes it harder to find our next Einsteins. “Improving opportunities for disadvantaged children may be valuable not just to reduce disparities but also to spur greater innovation and growth,” according to a new study from Raj Chetty and the Equality of Opportunity Project. Essentially, smart poor kids are only as likely to obtain patents as dumb rich kids. Reducing income inequality could quadruple the rate of innovation. Here’s how to find the next Einsteins.
6. John Legend and New Profit are helping find innovators among former offenders. Unlocked Futures, an accelerator started by singer John Legend and the philanthropic fund New Profit, supports entrepreneurs who are former inmates or are helping others transition back into society. “Entrepreneurship is important because we may not get jobs. We’re hiring ourselves. It’s out of necessity,” says entrepreneur Teresa Hodge, part of Unlocked Futures’ inaugural class. Read all about it.
7. 2030 Finance: The $600 billion opportunity in the Middle East and North Africa. Businesses that focus on resilient cities, sustainable agriculture and new energy could propel more than $637 billion in new business activity and 12.4 million jobs in the region by 2030, according to a new report. In the Middle East and North Africa, “we see a young dynamic population motivated to seize opportunities and make positive contributions to the wider society,” said Arif Naqvi, CEO of the $10 billion private-equity firm Abraaj. Get ahead of the curve.
8. And finally, tell us who is rebuilding America from the bottom up.ImpactAlpha and Village Capital are looking for entrepreneurs around the country, as well as people and organizations supporting entrepreneurship as a way to rebuild America from the bottom up. We have teamed up on a series of profiles highlighting the “new nature of entrepreneurship,” to be published early next year. Send your suggestions now.
That’s a wrap. Have a great weekend! Please send news and comments to [email protected].