The Brief | March 18, 2019

Techstars impact, SF Foundation’s $50 million mandate, professional women unite, reclaiming the impact narrative

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Techstars looks for startups to help mitigate mounting social and environmental risks. The new new thing in tech accelerators? The opportunity in mitigating social and environmental risks. Techstars, which has helped nearly 1,600 startups raise more than $6 billion, is recruiting young companies that are boosting access to basic services, increased diversity and inclusion, decreased poverty and inequality, and solutions to climate change, clean energy and environmental sustainability. Techstars Impact in Austin, Tex., and Techstars Sustainability in Boulder, Colo., wrapped up their first cohorts last summer and are recruiting 10 companies each for their second cohorts.

The growing corporate interest in managing global social and environmental risks “represents both an impact opportunity and a market opportunity” for new ventures, says Techstars Impact’s Zoe Schlag. Most venture capital investors have lagged in targeting the 17 Sustainable Development Goals, which “represent existential-level risk to major companies of the world,” she says. The sustainability accelerator graduated Vancouver-based This Fish, which is targeting SDG No. 14 (conserve and sustainably use the oceans) with at-sea verification of sustainable fishing efforts for seafood suppliers, restaurants and consumers. Techstars Impact helped Singapore-based Kutumbita, which helps factory workers communicate with managers to improve factory conditions and help global brands ensure human rights in their supply chains, advancing SDG No. 8 (Decent work and economic growth).

Keep reading, “Techstars looks for startups to help mitigate mounting social and environmental risks, by Dennis Price on ImpactAlpha.

Dealflow: Follow the Money

San Francisco Foundation moves $50 million to mission-aligned investing. The community foundation is aligning part of its $800 million endowment with its mission of building inclusive prosperity and racial equity in the Bay Area. The foundation is among only 17% of foundations in the U.S. aligning at least parts of their investments with their missions. The San Francisco Foundation won’t make direct investments in impact companies or private-equity funds, however. Rather, it is committing funds to asset managers for investments in public equities and debt screened for positive and negative indicators. The foundation is looking for minority- and women-owned asset managers and, over time, plans to move more of its endowment into more impactful investing. Keep reading.

Professional women’s community Fairygodboss raises $10 million. The New York-based startup was launched in 2015 by former Dow Jones executives Georgene Huang and Romy Newman as a ‘Glassdoor’ for professional women. It hosts anonymous reviews from women about companies’ benefits and work cultures and now includes information about salaries and benefits like maternity leave, as well as a job board and career advice for professional women. The free site attracts about three millions visits per month. Fairygodboss raised a $10 million Series A round from GSV Accelerate and Signal Peak Ventures, following a $3 million seed funding round last May. Learn more.

Whispr secures early funding for app to support deskless workers. Workplace startups are mostly geared towards desk workers – think Zoom, Slack or Trello. Copenhagen-based Whispr wants to change that with voice-guided tools for workers in deskless jobs, like transport, hospitality, healthcare, and construction. Whispr’s app allows workers to ask for information or guidance hands-free. “We are returning to the original and most natural ‘user interface’, which is voice,” said founder Hugh O’Flanagan. The company raised €668,000 ($756,000) in pre-seed funding from Seedcamp, PreSeed Ventures, Futuristic VC and Bose Ventures, the venture arm of the audio equipment company. Check it out.

Signals: Ahead of the Curve

Impact investors struggle to reclaim the narrative. Everybody loves to catch an overprivileged self-proclaimed do-gooder in an embarrassing contradiction. That helps explain why the fall of former Rise Fund CEO Bill McGlashan in the University Blues college-admission scandal has presented such an irresistible narrative for media pundits. (For the background, see “TPG Growth’s Rise Fund rocked by federal charges against CEO Bill McGlashan). Critics of impact investing who have relied on tired defenses of market-absolutism and “fiduciary duty” have now been joined by those claiming higher moral ground as people who won’t be fooled. The skeptics feel vindicated and everybody can go back to business as usual.

Impact investing practitioners are belatedly rallying to separate the strands of the scandal and move beyond the gotchas:

  • Alternative storylines. “We’ve now seen what happens when the arrogance of Wall Street wealth meets the marketing opportunity of impact investing,” writes Jed Emerson, author of “The Purpose of Capital.” He suggests the impact investing community “be not quite as welcoming of the validation brought by mainstream acceptance after our years in the financial wilderness.” But he counsels, “May we now get back to the business at hand? The reasons we all got into this work remain as compelling and critical as ever.” Emerson rebutted author Anand Giridharadascall for a “moratorium on impact investing until finance unwinds its own complicity in the injustices it purportedly wants to help solve.” Emerson thunders, “Moratorium on impact investing, my ass. I’m doubling down for impact!”
  • Dangerous conflation. Lumping McGlashan’s personal issues with The Rise Fund’s investment strategy “is irresponsible and extremely harmful as we work to bring more private sector capital into solving the world’s biggest problems,” warns Trevor Neilson, co-founder of i(x) investments. Climate action, in particular, requires trillions of dollars of institutional investment capital, he says. The Rise Fund “has been successful in bringing huge pools of capital into the space – capital that we desperately need if we are going to confront the greatest threats humanity has ever seen.”
  • No free pass. The episode is strengthening calls for greater accountability in impact investing (see, “Y Analytics: The Rise Fund’s new impact measurement business gets a mixed welcome”). Tweeted SVT Group’s Sara Olsen, “The presumption of positive impact given by American society to impact investors and philanthropists is expiring.”
  • What’s your take? Send your thoughts to [email protected] and share this post.

Agents of Impact: Follow the Talent

Seize the opportunity. Credit Suisse is hiring a head of sustainable and impact products and services in Zürich… Aqua-Spark is looking for an investment manager and a fundraising and investor relations associate in Utrecht… Co-impact is recruiting a director of programs in New York… Innovation consultancy SecondMuse is looking for a program manager in New York… Humanity United seeks a manager of strategy, learning and impact in San Francisco… The Lumina Foundation is recruiting strategy officers for talent investments and competency-based learning in Indianapolis… The Schmidt Family Foundation is hiring an investment associate in Menlo Park, Calif…. The New Hampshire Community Loan Fund is looking for a housing cooperative specialist, a credit administration loan manager and a commercial real estate lender in Concord…

Apply, respond, submit. Venture philanthropy New Profit launches Civic Lab to support entrepreneurs building civic trust and culture in the U.S. Applications are open for smart-city accelerator Urban X’s sixth cohort… Student scholarships are available for US SIF’s annual conference in Minneapolis from June 10-12.

March 18, 2019.