Greetings, ImpactAlpha readers!
#Featured: Introducing The New Revivalists
The people, places and policies reviving entrepreneurship — and America.A great entrepreneurial awakening is rolling across America. It may not show up yet in the statistics, which put the rate of new business starts at a 40-year low. But the entrepreneurial revival is clearly visible in cities and rural areas far from coastal hubs. These builders of new businesses are leveraging place, untapped talent and technology to serve local needs, revive manufacturing, create jobs, build wealth and restore neighborhoods.
Call them The New Revivalists. And as heroic as the entrepreneurs themselves are the accelerators and advocates, investors and civic leaders building ecosystems to help entrepreneurs succeed. To put faces to this awakening movement, ImpactAlpha has teamed with Village Capital to produce profiles of more than two dozen such new revivalists. First up: Derrick Braziel, who watched changes in Over-the-Rhine, a Cincinnati neighborhood, and then co-founded MORTAR to connect local entrepreneurs of color with resources and support. Watch for profiles of more New Revivalists in coming weeks.
Read the introduction to the New Revivalist series, “The people, places and policies reviving entrepreneurship — and America.” And check out our profile of MORTAR’s Derrick Braziel (below).
#Series: The New Revivalists
Derrick Braziel: Breaking down barriers for Cincinnati’s entrepreneurs of color. Derrick Braziel co-founded MORTAR in 2014 to connect Cincinnati entrepreneurs of color to 21st-century resources. An African American-led business, MORTAR is on a mission to change the way we identify, resource, and support underrepresented entrepreneurs, locally and nationally. Read Megan McFadden’s profile of Derrick Braziel, “Breaking down barriers for Cincinnati’s entrepreneurs of color,” on ImpactAlpha.
The New Revivalists series from ImpactAlpha and Village Capital profiles the people, places and policies reviving entrepreneurship — and America.
#Dealflow: Follow the Money
Leapfrog backs digital lender NeoGrowth’s $47 million round. Small and medium-sized businesses are responsible for 30% of India’s GDP but struggle for traditional financing. Mumbai-based NeoGrowth underwrites loans and lines of credit based on businesses’ records of digital payments — a fast-growing way of doing business in the aftermath of the Indian government’s move to reduce the amount of paper currency in circulation. NeoGrowth has worked with more than 5,000 businesses, nearly 50% of which hadn’t previously had access to credit. LeapFrog’s investment follows investments by Omidyar Network, Khosla Impact, Aspada Investment Company, Accion’s Frontier Inclusion Fund, Quona Capital and others.
Aspect Ventures raises $181 million for second fund. Melinda Gates and Cisco Systems are investors in the new fund, which is backing women- and minority run businesses but doesn’t call itself an impact investor. Founders Theresia Gouw and Jennifer Fonstad, who launched the firm in 2014, are trying to fight the underrepresentation of women, minorities and other groups in businesses and boardrooms by investing in companies with diverse leadership and staff. Women and minority-run businesses comprise 40% and 30% of Aspect’s portfolio, respectively. Aspect invests in companies that have raised seed-stage funding but often struggle to find the growth capital they need.
Climate Trust Capital invests in dairy biogas project. The carbon-focused conservation fund invested $1.1 million in a biodigester to break down waste and capture methane on the California dairy farm where it’s located. It will also produce carbon offsets to sell through California’s cap-and-trade exchange. The biodigester is Climate Trust Capital’s second investment in the biogas sector and marks the halfway investment point for its $5.5 million fund. The fund, which will be fully committed this year, is also invested in forestry andgrasslands projects. Climate Trust Capital’s first fund is backed by the Packard Foundation and USDA.
#Signals: Ahead of the Curve
Investing in a new approach to insurance premiums. The largest venture investment to date in a “benefit corporation” came last month when Lemonade Insurance secured $120 million in funding in a Series C round led by SoftBank. B Lab, the organization behind the B Corp design, says VC funding for Lemonade is another marker of how capital markets are shifting under pressure from investors and entrepreneurs who recognize old ways of doing business won’t satisfy 21st century workers and consumers.
New York- and Israel-based Lemonade takes a novel approach to premiums and claims. It charges a flat fee to its customers and treats premiums as if they were still the policyholders’ money. After paying claims and charging its fee, it donates leftover premiums to charities its policyholders care about. Last year, this annual “Giveback” saw Lemonade donate more than $53,000 to 14 charities. As a benefit corporation, Lemonade has pledged to take account of all its stakeholders — workers, community and the environment, as well as shareholders. Read “Venture capital is warming to the benefit corporation economy,” from B the Change, on ImpactAlpha.
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