Seed Investing: An opportunity to grow the impact investing movement

August 20, 2016

 

Amrita Sankar and Olivia Martin of Impact Assets met up with conscious investor Kristin Hull to discuss new strategies for building the field in impact investing. Here are excerpts from their interview:

 

 Impact Assets: What would you say is your personal philosophy around philanthropy and/or impact investing? 

Kristin Hull: At Nia Community, we strive to use all of the tools in our toolbox to work toward our mission of social justice and environmental sustainability. We both recognize and honor the words of Dr. Martin Luther King, Jr. who said, “Philanthropy is commendable, [yet] it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.” Like Dr. King, we are mindful that there exist extreme inequities in this country and while owning the paradox that is philanthropy, we seek to support organizations that work at the core of dismantling both racial and economic injustices, building more equity and inclusion in our society.

 

As far as investing, I see that our money is always at work and that all investing has impact. Yet as a society, we only talk about our investment dollars as having “impact” when we like what the company or investment vehicle is doing, and are proud of the potential outcomes.

 

I see it as our job and responsibility as investors (and advisors) to know and fully understand the impact our money is having in the world. I seek to be 100% fully invested for mission, using each financial transaction to work toward social and environmental goals, from my banking practices to the public equities I hold, and every investment in between.

 

 IA: What sparked your interest and passion for seed-stage impact investing?

 

KH: I first learned about conscious and impact investing in 2007. I started with community banks that year. I then got involved in fixed income. From there, I began meeting young and innovative entrepreneurs who needed small investments to get their ideas off the ground. It did not take long for me to notice that “first money”—that angel and seed stage-- was some of the hardest capital to come by, and as a small investor, that I could have a lot of leverage at this level.

 

IA: (Prior to seeding this investment vehicle at IA) Had you previously invested in seed stage venture?

 

KH: Yes. Knowing the field and some of the barriers that make this early stage difficult to access for many investors is a main reason I wanted to support Tim and Impact Assets as a seed investor to help get this platform off the ground, making this type of investing more accessible to more people and organizations.

 

IA: What is your perspective on the ecosystem of seed-stage impact investing?

 

KH: We are definitely at an interesting time for early stage investing and for achieving positive impact as more and more people become conscious of what their money is doing in the world.  The Divest/Invest movement, the work of 350.0rg, coupled with student activism on college campuses is bringing a lot of awareness to “know what you own,” encouraging both individuals as well as college endowments and other organizations to take a look at their holdings. This act of actually understanding what types of companies we are all invested in is sparking much-needed dialog as well as motivating change. We as a society are beginning to feel empowered about moving our money into companies we care about, those doing good for the world, and investing in early stage entrepreneurs is definitely part of that.

 

I work in Oakland, in the Bay Area where we have a thriving entrepreneurial scene. That said, white male entrepreneurs are still those receiving the bulk of the start-up money. We as investors have the opportunity (and I would argue, the responsibility) to invest in women, people of color and diverse teams. Those of us offering early stage money can be particularly influential in ensuring that we are investing to create a world that reflects our communities; one we want to see and be a part of.

 

IA: How does IA support bridging the existing gaps [i.e., access to qualified deal flow, high transaction and diligence costs, other hurdles to seed stage investing]?

 

 KH: Impact Assets is the first platform I know of offering the opportunity to invest in really interesting, solutions-oriented companies early on. The fact that you all are taking on the (long and at times arduous) vetting and due diligence process, as well as creating minimum investment amounts as low as $2500 is groundbreaking work. This offering has the potential to lower the barriers that hold up many investors, allowing them to participate in and support such early ventures.  My hope is that by providing this opportunity for people to “dip their toes in” with such a low-level commitment, we will really move the dial and open up this space.

 

IA: What is the impact that Impact Assets’ Seed Ventures Platform has had that you are most excited about?

 

KH: My hope is that this offering will be one of those helping to democratize this space. More and more people will get to participate in these early stage deals, allowing them to know and follow innovative, solutions-driven companies as they pivot and grow. Being involved at the beginning can be a really fun learning experience, as well as a significant profit driver for investors.

 

IA: What ignited your interest to invest in seed stage Impactventures?

 

KH: A pivotal moment for me took place in 2008 when I was developing some ideas around a creative co-working community space for social change makers. As I was developing my own business plan, I happened to meet the folks working on bringing Impact Hub to the US. I met with them, and when I realized we held such a shared vision, I decided at the time, it would be more effective for me to invest in their project so that I could help that succeed, rather than to keep developing my own. Since then, I have continued to seek out diverse entrepreneurs with game-changing ideas.

 

IA: Had you invested in a seed-stage impact venture before?

 

KH: Yes. As an entrepreneur and an investor, I have both sought out investment for my various projects (North Oakland Community Charter School, Impact Hub Oakland, Nia Global Solutions) as well as invested in many others. I keep a complete list of all of my investments here as a way to both bring transparency to the financial world as well as to share what I am up to. I am currently working to build out our website to share all that we are up to, and what we have learned thus far. Stay tuned!

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