How Investors Spend Earth Day

(3BL Media) March 12, 2012 - The idea of investing in a company that not only brings solid financial returns but also offers some measureable social or environmental benefit is, thankfully, far more commonplace than it was twenty years ago. The original members of Investors’ Circle, founded 1992, believed that this type of investing was no less than an answer to many of the world’s most pressing problems.

Today, the mission of this network (the largest of its kind specifically dedicated to impact) remains largely the same - and many have been gratified to watch the ecosystem supporting such lofty endeavors mushroom up around it clearly sharing the vision. 

This kind of warming trend we can all support and indeed, 150 angels and other accredited investors, fund managers and wealth, family and financial foundation advisors along with their clients are expected to attend the Investors’ Circle biannual event which kicks off on Earth Day (Apr 22) with an Evening Reception at the Hotel Monaco. 

FINANCIAL VIABILITY KEY TO DELIVERING IMPACT

For investors familiar with looking at impact deals, the language around criteria seems to be evolving – and expectations along with it.  Cody Nystrom, of SJF Ventures (recently raised their third fund and an institutional IC member), asserts such a financial-first perspective, “If an enterprise lacks a viable business model or the ability to reach sustained profitability, it is hard to imagine the company’s capacity to deliver real impacts over the long term.  There can’t even be a conversation about a company’s potential for delivering impact without a well-vetted discussion around the company’s projected financial future.”

This may be welcoming to those investors having more primarily traditional appetites. Investors’ Circle positions itself to be an organization where newbies can come learn more about impact investing and those with more experience find good deal flow. The event itself provides an opportunity to attend workshops, network with those actively investing and look at deals that range in deal levels from $100K to $3M. There is also an IC incubated fund, the Patient Capital Collaborative, designed to let those interested get their feet wet at even lower levels.

FINDING GREAT ENTERPRISES:  15 “IMPACT” IDOLS

Where do these investment opportunities come from? A nation wide hunt over the past few months yielded hundreds of applications from hopeful entrepreneurs.  A team of seasoned investors, plus forty MBAs from top schools across the country are now reviewing the applications through a process honed over many years.   A final group consisting of the top fifteen, categorized as “early-stage”, (i.e., past seed-stage and pre-big VC money), enterprises will be invited to present on Monday, April 23, the second day of the conference.

These hopefuls are aiming to take the next step in raising somewhere between $100,000 and $3 million for their enterprise so they can scale up to $5 million, or more, in profits over the next few years - one of the criteria for being selected in the first place.  Socratic Technologies provides the cutting edge real-time feedback platform investors use via their laptops and PDAs throughout the day. The synthesized data is used to kick-start the deal debrief that immediately follows the pitches. 

ACTIVATING INVESTMENT PROPELS THE MISSION

Due diligence meetings amongst interested investors begin the very next, and final day, of the conference. The room tends to reverberate with excitement as investors and entrepreneurs dive into conversation over breakfast.  It’s a deliberate plan to get potential deal development rolling.  “Moving money. That’s what we hope to facilitate”, says Bonny Moellenbrock, Executive Director of Investors’ Circle. “We want these entrepreneurs to reach their full potential.  They raise the capital they need to create vital impact and hopefully go on to become even more successful. The investors are in a position to then experience positive returns themselves. This feeds the impact success machine and when the impact success machine is sustaining itself – well then, that’s when we know we’re actually transforming our economic system into a marketplace that works for people and the planet. It’s what we believe in and what we are here to do.”