The Brief | June 1, 2021

The Brief: Centering Blackness, HBCU venture capital, virtual surgery, cost-effective pay-for-success, facilitating dealflow

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Greetings, Agents of Impact! Check out these ImpactAlpha partner events this week:

  • U.S. Impact Investing Alliance and the Federal Reserve Bank of New York are hosting “Capital Quest: Connecting capital to communities.” Amir Kirkwood of the Opportunity Finance Network, PayPal’s Rosita Najmi and CapShift’s Liz Sessler will join the Alliance’s Fran Seegull and the Fed’s Otho Kerr on Thursday, June 3.
  • Transform Finance will kick off a series on grassroots community-engaged investment (see, “Centering community voices and power in investment processes”) with Aditi Vaidya of the Robert Wood Johnson Foundation, Thursday, June 3.

Features: The Reconstruction

Anne Price on centering Blackness in the economic liberation of all Americans. The recovery from both the COVID pandemic and the long legacy of racism in the U.S. presents an opportunity for a new normal that centers Blackness to re-create culture and systems that work better for all. “We haven’t thought about everything that diminishes Black life and what that has meant, how that has blocked our potential and caused immense suffering and riddled our bodies,” Anne Price of the Insight Center for Community Economic Development tells host Monique Aiken on this week’s episode of The Reconstruction podcast from ImpactAlpha. The dehumanization of Black life separates white people from their humanity as well. “I think that centering Blackness creates space for all people to be seen, and that can be restorative,” she says, citing the writer James Baldwin, who observed that what white people don’t know about Black people reveals what they don’t know about themselves. “And when you don’t know yourself fully, how can you truly be whole?” Price asks. “This healing is something that needs to happen collectively.”

Amid the pandemic and the racial-justice uprising following George Floyd’s murder, Price, with colleagues Jhumpa Bhattacharya and Dorian Warren, last summer called for “a serious and sustained effort to center Blackness and the Black experience as a necessary strategy to ensure economic liberation for all Americans.” Centering Blackness in the U.S. became a founding principle of The Reconstruction podcast series, which launched in January to connect people and ideas moving capital towards justice. Price, the Insight Center’s first female president, has long pushed for the inversion of myths that villainize Black people, and Black women in particular, to distract Americans from examining the root causes and racist policies that produce harmful health and social outcomes for all. “If we want true liberation, we have to solve for the fundamental harms, and build for a future beyond them,” she says. “I see it as a means to building multiracial solidarity, because we can all look at anti-Blackness and how it plays out, no matter where we’re from, and how we got here in this country.” We need a new normal, Price says. “We can’t go back.” 

Read on and listen to, “Anne Price on centering Blackness in the economic liberation of all Americans,” by Anjali Deshmukh and Monique Aiken on ImpactAlpha.

Dealflow: Racial Wealth Gap

Base10 will donate half its profits in a new $250 million fund to Historically Black Colleges and Universities. Limited partners in the Black-led San Francisco venture firm’s Advancement Initiative fund include Howard University, Florida A&M, Hampton University, Tuskegee University and other HBCUs. Base10 will invest in late-stage technology companies with a focus on catalyzing wealth creation for underrepresented minority communities – and donate 50% of the fund’s carried interest to HBCUs for their endowments and to create scholarships for 100,000 STEM students. “Supporting HBCUs is the most effective way for us to augment underrepresented minority talent in Silicon Valley,” said Base10’s Ade Ajao.

  • Talent pipeline. Historically Black Colleges and Universities, or HBCUs, produce approximately 25% of African American graduates in the fields of science, technology, engineering and mathematics. The 10 largest, and predominantly white, institution endowments reported a combined total of $199.8 billion last year, compared to $2 billion for the 10 largest HBCUs, according to NACUBO.
  • Global strategy. The Base10 fund has already made several investments, including Nubank, a São Paulo-based digital bank, and Aurora Solar, a San Francisco-based software startup that helps solar installers plan installations remotely.
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Rubio Impact Ventures backs surgical care startup Incision. Amsterdam-based Incision launched in 2014 to help surgeons and other operating room staff share surgical experiences, skills and expertise. The company offers more than 500 accredited courses that are supervised by experienced surgeons, as well as 3D tools to help surgeons prepare for operations and avoid complications. Incision will use the €5 million ($6 million) investment from Rubio (formerly Social Impact Ventures) and medtech investor SHS to expand to the U.K., Belgium, Scandinavia and the Middle East “to connect 10,000 clinics with our platform,” said Incision’s Ritsaart van Montfrans. Check it out.

Dealflow overflow. Other investment news crossing our desks:

  • FMO and the International Development Finance Corp. launch a $75 million co-financing facility to support COVID-impacted small businesses and promote economic development for underserved populations in low-income countries.
  • ADDI, a buy-now, pay-later digital commerce platform in Latin America, secures $65 million in debt and equity financing from Quona Capital, Endeavor Catalyst, Union Square Ventures and others.
  • ABC Fund commits €1 million ($1.2 million) in debt financing to West African agri-businesses Kaworo and Établissement Yaffa et Frères.
  • Plant-based restaurant chain Plant Power Fast Food raises $7.5 million in Series A funding.

Impact Voices: Cost-Effective Impact 

A resilient pandemic recovery requires faster, cheaper pay-for-success initiatives. The promise of social impact bonds and other pay-for-success products: better social outcomes and lower costs to taxpayers. But the complexity and variability of most pay-for-success initiatives have raised transaction costs and slowed deployment, write Ibrahim Rashid, a public policy grad student at the University of Chicago, and Sam Levine, an MBA candidate at Yale, in a guest post on ImpactAlpha (see Rashid’s earlier post, “‘Pay for success’ can help the Biden administration build back better“). Partners and implementers aren’t waiting on policy fixes to explore novel ways to reduce pay-for-success transaction costs.

  • Cost cutting. Maycomb Capital’s Community Outcomes Fund replicates past pay-for-success deal contracts to minimize contractual costs. Third Sector’s Better Careers Design Group orients government and nonprofit stakeholders around outcomes to reduce costs from stakeholders’ pay-for-success learning curves. “By focusing on reducing contractual and relational costs,” say Rashid and Levine, “we can enable a greater quantity and diversity of pay-for-success projects that are geared towards building back better.”
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How investment facilitators unlock dealflow in emerging markets. Getting deals done in frontier and emerging markets costs more because of market opacity, risk perception and smaller-than-average deal sizes. Deal intermediaries can help deals get done by improving the flow of information and trust between parties, argue CrossBoundary’s Jake Cusack, Matt Tilleard and Tom Flahive in a guest post. CrossBoundary’s own experience in “investment facilitation,” includes educating impact investors on small business and microfinance opportunities in Mali through the USAID-backed Mali Investment Facilitation Platform. What’s needed: donor capital to cover the costs of intermediaries’ services so that they are incentivized to take on “riskier and highly catalytic transactions” and “to ensure that transactions successfully close.” Keep reading.

Agents of Impact: Follow the Talent

James Wahls, ex- of the Annie E. Casey Foundation, joins Mission Investors Exchange as senior vice president of programs and initiatives… Danielle Rose is promoted to chief executive officer at SMASH… Net Impact is hiring an associate director of growth, an associate director of community and other rolesUncharted is looking for a director of economic inequality, a program manager and a program associateCaprock Group seeks an investment research analyst in the San Francisco Bay Area.

Black Enterprise and Executive Leadership Council are hosting an “Economic equity and racial justice” town hall series… Join IIX’s masterclass, “Measuring Impact for Sustainability,” with the Wharton School, SVT Group and Social Value International, June 7-July 12. Use code IMPACTALPHA30 for a 30% discount… The Global Impact Investing Network’s “Next Normal Now” on climate action convenes Wednesday, June 16… gener8tor’s virtual OnRamp Impact Conference is scheduled for July 27-28.

Thank you for your impact.

June 1, 2021