TGIF, Agents of Impact!
🗣 Ground floor. Investors like to inflate their importance. But they’d be nowhere without the often-irrational optimism of the person or team that starts something new and sticks with it stubbornly until it works. Underestimated or overlooked founders can bring unique insights to untapped markets, as Roodgally Senatus reports in his piece about 2Gether’s Diego Mariscal and his network of nearly 600 disabled founders. Forward-thinking founders can treat, and account for, their employees (aka human capital) as assets, not liabilities, as Amy Cortese lays out (and as we explored on this week’s Call – see below). And when they’re ready to retire or otherwise exit, founders can sell to their own workers, rather than a private-equity firm, via one of the new channels for employee-ownership conversions. (Speaking of private equity, be sure to read contributing editor Imogen Rose-Smith’s excellent takeout on the University of California’s $4.5 billion investment in Blackstone’s real estate investment trust.)
Agents of Impact of all stripes know alot about starting new things and sticking with them stubbornly. In a video interview, Opportunity Alabama’s Alex Flachsbart (whom we profiled two years ago) and Patrick Mullen of Arctaris Impact Investors shared with me how they and others are leveraging Opportunity Zone tax breaks to bring capital to urban and rural areas long starved of it. Amy details the real-estate strategy at work in a mixed-use development in Tacoma, Wash., that prioritizes affordable rents and accessible services. Dennis Price rounds up more than a dozen efforts to streamline, standardize and benchmark impact data. As the new shape of business and finance comes into being, both impact entrepreneurs and impact investors can say they were present at the creation. – David Bank
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The Week’s Impact Briefing
🎧 On the podcast. The roundtable – that’s Brian Walsh, Imogen Rose-Smith and David Bank – is back together to discuss private equity and, specifically, that $4.5 billion investment made by the investment office of the University of California’s Board of Regents into the Blackstone Real Estate Investment Trust. Plus, the headlines.
- Listen to this week’s episode, and follow all of ImpactAlpha’s podcasts on Apple, Spotify or wherever you listen.
The Week’s Call
Policymaking for workers and communities in the Year of the ‘S.’ “A labor market where workers have more opportunities and have more power and have more leverage is a good thing,” Brian Deese, the outgoing director of President Biden’s National Economic Council, told The New York Times. “It’s a good thing for working people. And it’s a good thing for the economy.” Agents of Impact Call No. 49 took up policymaking around the S – for social – in worker ownership, human capital disclosure and accounting, and banks’ accountability for fair lending to underserved communities. “What unites all of these is power to the S, power to the people, power to employees, power to communities, even to customers,” said Fran Seegull of the U.S. Impact Investing Alliance, which sponsored the Call.
- Worker ownership. Broad-based employee ownership is a way to equalize wealth before it is created. Such ‘predistributive’ approaches have bipartisan appeal. “Our theory of change is, we can use public policy tools and credit enhancement to mobilize new private capital sources” for employee buyouts, says Jack Moriarity of Ownership America. “That’s really an opportunity for scale.”
- Human capital. New rules mandating greater disclosure of human capital factors in companies are expected this spring from the Securities and Exchange Commission. The shift could finally force companies to account for their workers as assets, not liabilities, spurring them to invest in their success instead of cutting them as costs.
- Small business lending. The Community Reinvestment Act, the 1970s-era law aimed at remedying redlining and systemic discrimination by banks in communities of color, is due for an overhaul. And an update to the Dodd-Frank Act (section 1071 for you policy wonks) would for the first time require banks to collect gender and race data on small business borrowers. “If you care about small business, if you care about minority entrepreneurship, women-owned businesses, this is critical to understanding who’s getting the loans and who’s not,” said Jesse Van Tol of the National Community Reinvestment Coalition.
- Political support. Some of the impact policy agenda will face pushback from politicians who have already weaponized ESG and diversity. “We have to make sure that staff are armed with the information and the data to understand the track record of sustainable investment [and] why investors care about it,” said Kyle Bligen, legislative aide to Rep. Juan Vargas, who co-chairs the new Sustainable Investing Caucus on Capitol Hill. “It’s about business. It’s about investor protections and market transparency.”
- Read the full recap by Amy Cortese on ImpactAlpha and watch the replay on YouTube.
The Week’s Dealflow
Deal spotlight: Black and Brown green startups. Founders are using their proximity to communities and their own lived experience to build climate solutions (see, “Solving for climate justice is giving these Black investors an edge in the green economy”). Local accelerators and incubators are giving them an early boost. A half-dozen BIPOC founders will get access to funding and business development from a new year-long program, Advancing Climatetech and Clean Energy Leaders Program, or ACCEL. The accelerator from Greentown Labs and Browning the Green Space will “build critical support infrastructure for entrepreneurs of color and accelerate the equitable development and distribution of climate solutions across all communities,” says Kerry Bowie of Browning the Green Space.
- Returns on inclusion. Among the six startups in the cohort is Salem, Mass-based Active Surfaces, which is seeking to commercialize a paper-thin solar cell it claims can turn any surface into a power source. Cambridge, Mass.-based EarthBond connects households in Nigerian cities to low-cost and reliable solar power. Houston-based DrinKicks is repurposing food waste and recycled materials into sustainable goods, such as clothes and sneakers.
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Financial inclusion. Blue like an Orange invested $15 million in Financiera Contigo to provide micro loans and insurance to women-led enterprises in rural Mexico… Mexico City-based neobank Vexi scored $8 million in a round backed by Pomona Impact to offer low-interest credit cards to young people in Mexico… Nairobi-based Power Financial Wellness raised $3 million in a seed round backed by Quona Capital to provide financial services to gig workers in sub-Saharan Africa… Opportunity International raised $101 million to catalyze loans to boost livelihoods in low-income countries.
Clean and climate tech. Carbon Maps scored €4 million ($4.3 million) in a pre-seed funding to help the food industry track and reduce its environmental footprint… Climate justice nonprofit RE-volv scored $3 million in program-related investments from the Kresge and Schmidt Family foundations to help nonprofits and houses of worship in U.S. underserved communities add solar power… United’s Sustainable Flight Fund raised $100 million for sustainable aviation fuel.
Impact tech. COMMUNITYx snagged $2 million to build the Instagram of social and environmental activism… Eko raised 750 million Indian rupees ($9.1 million) in Series B funding to help microenterprises in India transact with their customers online… Twentyeight Health raised $8.3 million in pre-Series A funding from Impact Engine, SteelSky Ventures and other investors to provide telehealth services to Black and other communities of color.
Waste management. Blackrock, through its $4.5 billion BlackRock Global Infrastructure Fund, acquired a majority stake in Canadian waste management company Environmental 360 Solutions… Scotland’s Topolytics, which maps waste supply chains for waste management and recycling companies, snagged €1.7 million ($1.8 million).
Circular economy. Greyparrot, which uses artificial intelligence to sort and recycle waste products, raised $11 million in a Series A round backed by Regeneration.VC and Closed Loop Partners… Paris-based Bibak snagged €6 million ($6.4 million) in equity and debt funding to replace single-use plastic food packaging with reusable food containers.
Investing in oceans. IKEA’s backer staked Ocean 14 Capital to €30 million to supercharge the blue economy… Italian biotech startup Ittinsect snagged€750,000 ($799,000) to develop a sustainable alternative to aquaculture feed in a pre-seed funding round backed by Katapult Ocean.
The Week’s Talent
Consumer Reports’ Marta Tellado and Tolga Kurtoglu, former CEO of PARC: a Xerox company, are named to Omidyar Network’s board of directors. Vistria Group’s Mona Sutphen will serve as a board observer… Brian Buccella, ex- of Bird and Segway, joins Highland Electric Fleets as chief commercial officer… President Biden appoints Jonathan D. Lovitz, ex- of Lovitz Strategies, as director of public affairs of the U.S. Economic Development Administration… Laurie Felker Jones, an advisor to impact funders and founders, joins 2x Global as 2X certification lead… John Vaske, ex- of Temasek, is named chief executive officer of Farmers Business Network, replacing co-founder Amol Deshpande.
The Week’s Jobs
i2i Ventures is looking for an investment associate in Pakistan… EY-Parthenon Strategy is recruiting a manager of sustainable finance for the MENA region in Dubai… The Esmée Fairbairn Foundationis hiring a London-based funding manager… DBS Bankis looking for a sustainability executive director or senior vice president in Singapore.
World Economic Forumis hiring an ethnic equity and social innovation specialist in Geneva, Switzerland… Norrsken Foundationis recruiting a head of global strategic initiatives in Stockholm… Village Capitalis looking for a Mexico City-based investment analyst for Latin America… CIVICUSis recruiting a chief officer of innovation and sustainability… The University of Oxford seeks a researcher for the TABLE Initiative.
The Schultz Family Foundation is looking for a senior program officer in Seattle… Aramark is looking for a sustainability manager in Beaverton, OR… Autodeskhas an opening for a sustainability and foundation executive communications manager in San Francisco.
Female Founders Fund is hiring a head of strategic communications in New York… Levoca is recruiting a senior associate of sustainable finance and impact in Miami… The ImPact is hiring an associate in New York… State Streethas an opening for an ESG marketing and communications director… United Nations Foundationsis looking for a chief executive officer for the Digital Impact Alliance in Washington, D.C.
Kellogg Foundationseeks a mission driven investment analyst… Align Impact is hiring an investment research summer analyst… OpenInvestseeksa fixed-income ESG associate… CDP seeks a senior social media officer and senior communications manager… At One Ventures is hiring a climate VC associate… Groundworks USAseeks a director of climate and land… Root Capitalis hiring a remote manager for reports and proposals… JFF Venturesis recruiting a remote senior analyst.
That’s a wrap. Have a wonderful weekend.
– Feb 24, 2022