ImpactAlpha, June 10 – Protests in the streets continue to challenge systemic injustices. Agents of Impact at this week’s Spectrum conference, produced by SOCAP, presented a vision for systemic inclusion. Media producers can hold up stories told by Black, Indigenous and other communities of color. Entrepreneurs can tap the economic potential of changing lives in marginalized communities. Investors can seek impact alpha in inclusion. Overheard at the virtual event:
- Change narratives. “Representation matters,” says actress Erika Alexander, co-founder of Color Farm Media. Alexander’s onscreen character, Maxine Shaw in Living Single, has inspired leaders like Stacey Abrams and Marilyn Mosby and other politicians, judges and teachers. “If you want to really change policy, if you really want to influence culture,” she said, “you should tell the story.” Untold stories of communities of color are not only important but valuable. “This isn’t charity,” she says. Investors should expect “a valuable return on investment inside of a community that needs it.”
- Value stakeholders. Don’t extract value, be valuable, says Diishan Imira, who founded Mayvenn to financially empower Black hair stylists. “There’s tremendous amount of untapped potential in terms of returns in companies whose aim and mission is to really change people’s lives.” Recognize the value of key stakeholders, says Kesha Cash of Impact America Fund, a Mayvenn investor. Mayvenn “is built around the value of the hairstylist,” she said. CareAcademy, another Impact America investment, “is being built around the value of the direct care worker.”
- Close capital gaps. MacArthur Foundation has become the largest investor in Impact America’s second fund. MacArthur’s Debra Schwartz said funds like Impact America are part of a next wave of intermediaries “building a more just equitable and inclusive world through purposeful investing and finance.” The investment was made as part of the Catalytic Capital Consortium (see, “Indispensable element in many impact investments: ‘catalytic capital’”). “We need capital that aims for justice,” said Schwartz.
- Access to equity. Black and Latinx entrepreneurs in Chicago face a gap of at least $146 million in venture capital, according to “The Equity Capital Gap” from Next Street. “This is a business opportunity,” said Next Steet’s Charisse Conanan Johnson. Needed: Equity-like capital products that meet the needs of moderate-growth businesses. Revenue-based investment platform Founders First, which last year raised $100 million, is expanding from San Diego, Dallas and Austin to Chicago. Says Johnson, “Now is a time for large institutions to use their wealth and use their platform and use their power to make different decisions about where capital goes.