TGIF, Agents of Impact!
The Week Ahead
Unexpected impact. “Invest in what you know” is fine advice, as far as it goes. But a little creativity can take you places you don’t know yet. The creative economy produces deep and rich stories and culture, but also innovative solutions, profitable businesses, local prosperity and social change (see No. 1, below). Faith-based investors also are finding impact in unexpected places, such as the public-equity markets, where they are making a difference on issues from guns to climate change (No. 2). And who several years ago would have picked Japan as an emerging leader in sustainable investing? As the world’s third-largest economy goes green, it may bring global markets with it (No. 4).
Startups that pursue ‘revenues over rounds’ don’t often get the spotlight. But “zebras” may prove more durable than “unicorns” over the long-run (No. 6). And it may just be on the frontiers of finance, with the hard-to-reach small and growing businesses in emerging markets, where the sizeable returns align with the potential for impact (No. 5). And here’s a surprise: critics that have sought to hold corporations accountable to “stakeholders” suddenly find themselves in tune with corporations themselves (No. 3). Where are you finding unexpected opportunities for impact? Email us at [email protected] (or simply hit ‘reply’) or join the conversation on our subscriber-only Slack channel.
We’ll have a few surprises at our New York Agents of Impact gathering next Thursday, Sept. 19, from 5:30-7:30 at Liquidnet’s headquarters in The New York Times building. Join ImpactAlpha editor David Bank to take stock of climate finance with Andrew Lee, head of sustainable and impact investing in the Americas for UBS Global Wealth Management, and author Richard Morais, whose latest novel includes an impact investor grappling with climate change. RSVP now. (Big thanks to UBS and Liquidnet for their support.)
– Dennis Price, editorial director
The Week’s Agent of Impact
Laura Callanan, Upstart Co-Lab. Laura Callanan was President Obama’s senior deputy chair for the National Endowment for the Arts, but it was only after she launched Upstart Co-Lab in 2015 that she discovered the sisterhood of artists among leaders in impact investing and community finance. Her list includes Heron’s Clara Miller, Calvert’s Jenn Pryce, MacArthur Foundation’s Debra Schwartz, CultureBank’s Penelope Douglas and Veris’ Patricia Farrar-Rivas, among many others. “All of these folks whom we know as real leaders in this space of rethinking money and meaning have this creative start to their work,” she says. “I’ve got to believe that has enabled them to think outside the box and imagine combining things that are traditionally not put together.” Callanan, a theater major in college, is working to bring together impact investors and the $800 billion U.S. creative economy, which she defines as “a way of thinking and doing that revitalizes manufacturing, services and retailing through a focus on art, culture, design, and innovation.”
The nonprofit Upstart is working to “make the market” for creativity and positive social and environmental impact. Callanan is drawing on her earlier careers on Wall Street and at McKinsey & Co., the Rockefeller Foundation and the UN Development Programme to imagine products like arts-themed ETFs, working capital funds for global artisans and a national fund for creative business in Opportunity Zones. “You don’t have to be an art lover to invest in the creative economy,” she says. “There are great deals happening there.” Conversely, art museums and other cultural institutions facing criticism for sponsorship from companies and individuals linked to opioids, tobacco, fossil fuels and private prisons can start to recoup by aligning their estimated $58 billion in endowment assets with their values. “Cultural institutions should be at the forefront of socially responsible investing, Callanan argued in the Financial Times recently. “Let’s bring the best of Wall Street and Museum Mile together.”
- Full disclosure. Upstart Co-Lab is providing support for ImpactAlpha’s “Creating Impact” series. Catch the first episode: “Investing in the impact of powerful new voices in film and video games.”
- Share this story on ImpactAlpha and “like” Callanan’s Agent of Impact profile on Instagram.
The Week’s Big 6
1. The impact of TV, film and video games is increasingly investable. Impact investors who may never have considered themselves media moguls can now invest in creative funds, production slates and media ventures such as Essence Ventures, E-Line Media and Macro. The full story.
2. Faith-based organizations use their power as shareholders. Faith-based organizations have banded together to drive conversations with corporate management and press resolutions on guns, climate change, private prison financing, and other issues. Engaged.
- Business leaders call for action on gun violence. Among the CEOs who signed the letter to Congress: Leaders of Bain Capital, Thrive Capital, Airbnb, the Gap, Pinterest, Lyft, the Brookfield Property Group and Royal Caribbean. MIA: Apple, Facebook, Google, JPMorgan Chase and Wells Fargo. More.
3. What if Elizabeth Warren’s policies are actually pro-business? Warren’s Accountable Capitalism Act in many ways aligns with the Business Roundtable statement pledging respect for employees, customers, suppliers and communities in addition to shareholders. Calm down Wall Street.
4. Japan is staking out a leadership position in sustainable investing. Sustainable assets are up. Long-term investors are mobilizing. Politicians are providing cover. And yet, sustainable investing “has not otherwise gained traction with Japan’s mainstream financial community,” says TIPP’s William Burckart. A closer look.
5. Unlocking capital for “frontier finance” in small and growing businesses. Investors should look beyond traditional investment instruments to “alternative” structures such as revenue-based repayment models and holding company structures that meet the needs of small businesses. Growth markets.
6. Why zebras dazzle in stakeholder capitalism. Where unicorn startups score financing rounds, “zebras” startups celebrate revenues. Unicorns seek customer acquisition; zebras want their customers to succeed. Unicorns favor competition and disruption; zebras prioritize cooperation and social benefit. New normal.
The Week’s Dealflow
Private equity watch. KKR Global Impact looks to leverage labor data with majority stake in Burning Glass.
Clean energy. Goldman Sachs raises nearly $2 billion for solar yieldco… Nocca Robotics raises seed funds for robots to clean solar panels… “Solar” cell maker Exeger raises $10 million from SoftBank.
Returns on inclusion. 11 Black-owned tech startups join Durham’s Black Founders Exchange… 1863 Ventures is recruiting women entrepreneurs and founders of color for its Pipeline Program accelerator.
Soil wealth. Cooks Venture secures $12 million to scale up regenerative animal farming… Land Accelerator helps close financing gap for African soil startups… Terramera raises $45 million to reduce chemical use in agriculture.
Opportunity Zones. Rockefeller Foundation awards $3.7 million in grants to Washington DC, Oakland, Dallas and St. Louis to drive responsible private investment in Opportunity Zones.
The Week’s Talent
Patty Abramson, pioneer gender-lens investor, passes away at age 74… CDC appoints Tony Morgan as managing director of direct equity… Mayada El-Zoghbi, previously with CGAP, joins the Center for Financial Inclusion at Accion as managing director… Mandy Van Deven joins Nathan Cummings Foundation as director of communications… Gabby Cazeau comes on at Harlem Capital as a senior associate.
The Week’s Jobs
National Community Investment Fund seeks a credit analyst and an investment analyst in Chicago… Grand Challenges Canada is hiring an investment manager in Toronto… JUST Community is looking for ambassadors in Austin to the nonprofit reimagined the power of microfinance for the U.S… Project Equity is hiring an employee ownership investment and capital consultant and other roles… Chan Zuckerberg Initiative is hiring a director of inclusion and engagement in Redwood City…
The Clean Cooking Alliance has vacancies on its private sector and investment team in Washington D.C…. Access Ventures has two associate roles open in Louisville (see, “Access Ventures seeks new ways to lower costs for the housing insecure”)… AccoutAbility is hiring an associate and a managing associate in New York… EcoAgriculture Partners is looking for a communications manager in Washington D.C…. Opportunity Finance Network seeks a communications associate in Washington D.C.
Thank you for reading.
– Sept. 13, 2019