Happy Friday, ImpactAlpha readers!
#Featured: The Brief’s Big Ten
1. Steve Case is raising the rest…of a $100 million seed fund. Since 2014, the AOL-founder and Revolution chairman has visited 33 cities and personally backed 29 local startups with $100,000 each as part of his ‘Rise of the Rest’ strategy. Now he’s trying to get his fellow tech titans to back entrepreneurs in the middle of the country so “more people in more parts of the country will feel part of the future,” Case told CNBC. Case is raising a $100 million Rise of the Rest Seed fund to seize opportunities “between the coasts.” Read more.
2. Local corporations also are waking to the startup opportunity. In Milwaukee, Wisc., for example, a life insurer and a hospital chain are each standing up $5 million venture funds to back tech startups in their hometown. Northwestern Mutual’s Cream City Venture Capital, for example, will target startups with early-stage investments of $100,000 to $250,000. Read more.
3. Community foundations are getting in on the entrepreneurial action. Rhode Island Foundation is the latest to earmark endowment funds for impact investments. The $760 million community foundation is allocating almost $40 million for investments in local media, food co-ops and other strategies to boost educational success, healthy lives and economic security for Rhode Islanders. Read more.
4. Venture capitalists are betting on America’s immigration advantage. Foreign-born founders have built more than half of U.S. “unicorns,” or startups worth $1 billion or more. Now, VC firms including Catalyst Investors, Unshackled Ventures and 500 Startups are investing to make immigration easier. Crunchbase rounded up eight VCs that have invested $50 million into seven immigration-related startups. We added three more investing another $41 million. Read more.
5. And agents of impact are getting ready to Hack the Tax. As Congress debates tax reform, the floor is open (at ImpactAlpha at least) for more smart — dare we say bipartisan? — ideas for tax reform to drive inclusive prosperity. Here’s one: capital-gains tax deferral in return for investments in low-income communities, along the lines of the Investing in Opportunity Act. Add your own tax hacks to our growing list.
6. Shift by universal owners “has tipping point written all over it,” tweeted Matthew Weatherley-White, managing director at the Caprock Group. ImpactAlpha’s deep dive into the Bretton Woods II “responsibility ranking” of 115 sovereign wealth and pension funds showed clear leaders — and laggards. Dig in.
7. Let the impact products roll. UBS is out this week with a Global Impact Fund, which will target 40 to 80 companies focused on solutions to global challenges. Earlier this year the Swiss bank committed $5 billion for investments aligned with the U.S. Sustainable Development Goals. Last week, Standard Life pushed out its Global Equity Impact Fund targeting stocks aligned with the SDGs. Still unproven: the impact of such impact funds. Read more on UBS. And more on Standard Life.
- UBS introduces impact equities fund
- Standard Life Investments launches equity fund aligned with the global goals
8. Is it possible to serve the very poor and make a profit? A new study suggests yes. Deloitte researchers looked at 20 enterprises delivering basic services such as power, sanitation and health care to customers at the bottom of the economic pyramid (the 2.7 billion people living on less than $2.50 a day). They found that companies are able to reach the BOP; “some are able to reach surprisingly deep.” Find out how.
9. To build impact businesses that last, look to women. No one would buy books on menstruation, business experts told Aditi Gupta, the 33-year-old founder of Menstrupedia. “We’re now in our fifth year, and we’re not just surviving, but thriving,” Gupta told ImpactAlpha. The fourth episode of our “Women Rising in India” series features Q&As with four women founders in India. Read it in full.
10. Let’s end with the Central America opportunity. Central America and the Caribbean are not often touted as a growth story. But another look reveals a region with relative stability, a young and growing population and GDP-growth outpacing that of the U.S. That entrepreneurs in the region’s 20 countries still struggle to access funding presents an opportunity for investors. We rounded up a dozen founders and funders to watch at next week’s FLII Central America and the Caribbean in Antigua. Get smart quickly.
That’s a wrap. Have a great weekend! Please send news and comments to TheBrief@impactalpha.com.