Investment Firm with Poverty and Inequality in
Jenn Viane — May 9, 2012 — Social Good
References: goodcap.net
Kevin Jones is a Founding Principal of and Social Enterprise Venture Capitalist with Good Capital, a San Francisco-based, B Corp-certified investment firm that invests in today’s most innovative social entrepreneurs and ventures that are, according to its website, "creating market-based solutions to inequality and poverty." The former CEO of Net Markers, Kevin has been columnist for Forbes and Business 2.0 magazines and served on the boards of several non-profit organizations and social businesses.
As a visionary social enterprise venture capitalist, he shares with us why social enterprises matter and the future of social enterprise investing.
Four Questions with Kevin Jones
1. Why is providing access to funding for social enterprise companies important to you?
There is not enough money that flows through philanthropy -- which for most people (including investors) is money left over/after you make money -- to effectively fund the smart innovations we need to meet the increasingly complex problems the world faces. Nor is there enough money in the public sector.
The market has to be part of the answer, not just an extractive tool for the benefit of the one percent of the people on top of the system. The market is the most effective vehicle for the efficient delivery of resources to the point they are needed. As impact investing (investing for a blend of financial and social and environmental value) grows, it will increasingly learn to work in concert with philanthropic, public,= and even corporate capital flows. We need all the resources at the table to meet the challenges ahead.
2. How has B Corp certification benefited your business?
Good Capital’s three portfolio companies are B Corps, as are we, and it has had more of an impact within the companies; institutionalizing a culture of stakeholder engagement and freedom from the fear of either money-driven management and/or investors driving toward goals that are only about financial return. Being a B Corps sets them free to be a good business.
3. What is the coolest, most inspiring company or entrepreneur you've worked with since founding Good Capital?
Xavier Helgesen, Founder of Better World Books, has gone onto launch a solar linked to mobile startup in Tanzania. Mathieu Senard, CEO of Alter Eco, who after years of pushing Alter Eco, a fair trade, organic and more chocolate, rice and quinoa company uphill, is seeing the market begin to understand and accept the extraordinary value the company creates. The fact that it has planted more than 2 million trees to offset its environmental impact and increase yield by making cacao shade grown, measures and mitigates its impact on ground water, etc. is resulting in more stores stocking it, more distributors getting behind it, and is cutting costs and increasing margin. The company is going to succeed because it creates extraordinary value from buying from producers with good farming and production practices, and because it’s product is extraordinarily good.
4. How do you see social enterprise companies affecting the entrepreneur, tech and investment space in 5 years from now?
I think as some companies show what success at scale looks like, the market at the intersection of money and meaning will attract the best entrepreneurs and engage all their passions, intellection and drive. For some areas of focus, like renewables (ex. locally produced energy in Sub Saharan Africa and India), agriculture, and medical technology in massive urban slums in the developing world, technology is a public good that can be invested in at market rate.
That will open up opportunity with traditional tech investors to become engaged.
I expect to see more subsidized business models, where technology in the developing world is adapted in places where people can pay less, but in some cases those technology investments will be at market rate. I expect the number of investors who can hold to variables at once -- to invest in good and expect that there is a cost to doing good but still treat it as rigorously as investing -- to expand. There is a mind shift that is at the heart of what the market needs.
As a visionary social enterprise venture capitalist, he shares with us why social enterprises matter and the future of social enterprise investing.
Four Questions with Kevin Jones
1. Why is providing access to funding for social enterprise companies important to you?
There is not enough money that flows through philanthropy -- which for most people (including investors) is money left over/after you make money -- to effectively fund the smart innovations we need to meet the increasingly complex problems the world faces. Nor is there enough money in the public sector.
The market has to be part of the answer, not just an extractive tool for the benefit of the one percent of the people on top of the system. The market is the most effective vehicle for the efficient delivery of resources to the point they are needed. As impact investing (investing for a blend of financial and social and environmental value) grows, it will increasingly learn to work in concert with philanthropic, public,= and even corporate capital flows. We need all the resources at the table to meet the challenges ahead.
2. How has B Corp certification benefited your business?
Good Capital’s three portfolio companies are B Corps, as are we, and it has had more of an impact within the companies; institutionalizing a culture of stakeholder engagement and freedom from the fear of either money-driven management and/or investors driving toward goals that are only about financial return. Being a B Corps sets them free to be a good business.
3. What is the coolest, most inspiring company or entrepreneur you've worked with since founding Good Capital?
Xavier Helgesen, Founder of Better World Books, has gone onto launch a solar linked to mobile startup in Tanzania. Mathieu Senard, CEO of Alter Eco, who after years of pushing Alter Eco, a fair trade, organic and more chocolate, rice and quinoa company uphill, is seeing the market begin to understand and accept the extraordinary value the company creates. The fact that it has planted more than 2 million trees to offset its environmental impact and increase yield by making cacao shade grown, measures and mitigates its impact on ground water, etc. is resulting in more stores stocking it, more distributors getting behind it, and is cutting costs and increasing margin. The company is going to succeed because it creates extraordinary value from buying from producers with good farming and production practices, and because it’s product is extraordinarily good.
4. How do you see social enterprise companies affecting the entrepreneur, tech and investment space in 5 years from now?
I think as some companies show what success at scale looks like, the market at the intersection of money and meaning will attract the best entrepreneurs and engage all their passions, intellection and drive. For some areas of focus, like renewables (ex. locally produced energy in Sub Saharan Africa and India), agriculture, and medical technology in massive urban slums in the developing world, technology is a public good that can be invested in at market rate.
That will open up opportunity with traditional tech investors to become engaged.
I expect to see more subsidized business models, where technology in the developing world is adapted in places where people can pay less, but in some cases those technology investments will be at market rate. I expect the number of investors who can hold to variables at once -- to invest in good and expect that there is a cost to doing good but still treat it as rigorously as investing -- to expand. There is a mind shift that is at the heart of what the market needs.
Trend Themes
1. Impact Investing - Disruptive innovation opportunity in the field of investing that combines financial and social/environmental value.
2. B Corp Certification - Disruptive innovation opportunity for businesses to institutionalize stakeholder engagement and freedom from money-driven management.
3. Subsidized Business Models - Disruptive innovation opportunity in technology investment where developing world technology can be adapted at market rate for lower-income markets.
Industry Implications
1. Venture Capital - Disruptive innovation opportunity for venture capital firms to invest in social enterprise companies that create financial and social/environmental value.
2. Social Enterprise - Disruptive innovation opportunity for social entrepreneurs to create market-based solutions to inequality and poverty.
3. Technology - Disruptive innovation opportunity for tech investors to engage in the market of technology solutions for renewable energy, agriculture, and medical technology in developing regions.
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