Impact Investment Associate, Helder Ventures
Executive Director, 10th Avenue Fund
Steve's Reading List
Enabling social change through innovation and finance
Defining "better" money.
My focus here will be on my love, and the necessity, of innovation in three areas – the financial world, the mindset of ‘money’, and in the way we tackle local and global issues. I am a believer in the idea that there can always be a ‘better’ way, and that is what impact investing is to me. ‘Better’ can mean many things – a more efficient way of looking at a problem, a more wholesome way of looking at a problem, a more mutually beneficial way to solve an issue that solves the needs of all parties, not just a few. I think these are all applicable when I say that impact investing is a ‘better’ way.
If we are able to break this divide - this perception that doing good cannot create profits - then we can open up many more channels and vehicles for social good: multinational corporations, mutual funds, the stock market, even Bitcoin!
Why is impact investing important?
There are many differences between traditional investment and impact investing, - different financing models, a difficulty with exits, etc – the list goes on. At the end of the day the most crucial piece is a mindset switch: a transition from the belief that a personal top financial gain is more important than a societal or environmental advancement for our world. Whether you are a future business leader still in university or deep into the world of finance already, the way we think about money needs to change. For this I’ll share with you a book for some good bedtime reading: Joel Solomon, an impact investor located in Vancouver, released a great read that is one part memoir, one part manifesto. It’s titled The Clean Money Revolution: Reinventing Power, Purpose, and Capitalism, and is as entertaining as it is informative. In it he discusses the ideas behind impact investing and the necessity of a mindset switch in how the wealthy view money. He does this with more clarity and insight than I ever possibly could. In my opinion, well worth the purchase whether this is the first time you are hearing of impact investing or you are a seasoned vet.
How can the financial sector innovate using impact investing?
Once a mindset switch is established, the true innovation can begin. How can finance be used to meet the needs of investors while also strategically helping social ventures who are tackling complex issues?
For this, I give you an older TED Talk from the CEO and Founder of Acumen Funds, Jacqueline Novogratz, in which she discusses the idea of patient capital – capital that allows for high levels of risk, long time horizons before seeing returns, and actively seeks out ways to partner with traditional aid. In this talk she discusses her use of patient capital in developing countries but I believe it is necessary in developed countries as well. Within this idea of patient capital lies an opportunity to innovate with new financial products to help match an investor’s need for financial return and an entrepreneur’s need to experiment with solutions to complex issues.
An insightful article came out this fall on the Stanford Social Innovation Review by members of the Omidyar Network. In it, they discuss their transition from how they originally conceptualized impact investing, to the financing strategy they have now adopted. I think it’s a fantastic read to understand the complexities that can come with investing in social change and the innovation that is required.
What local or global issues can impact investing address?
In short, there are many. I think a good place to look is towards the United Nation’s Sustainable Development Goals. These are the issues that need innovation! At Helder Ventures we view ourselves as enablers – there are so many talented entrepreneurs with so many incredible ideas as to how to solve the root causes of these issues, and as impact investors our role is to enable these individuals to achieve success through purpose built financing and strategic advice to grow and scale their ventures.
At Helder Ventures part of our core focus is on innovation in poverty and marginalized communities – a great example of how innovation can drive solutions is the demand-driven training model. The Rockefeller Foundation and MakingCents International provide a great framework.
The most successful social venture is one that can innovate around a societal or environmental issue in such a way that the business model allows for quality returns in time without hindering the cause it initially aimed to address – this allows the company to scale and more effectively address the issue on a national or global level. Check out some of the ‘classic’ examples of successful social ventures: Plastic Bank, d.light, Grameen Bank,