My Favourite Social Investment – an evening of learning for impact entrepreneurs

 

By Lorne Craig, Unicycle Creative

If you are an entrepreneur looking for funding, and you missed this Board of Change event, kick yourself now. Then keep reading.

What could have been a dry dissertation on the relative merits of investment vehicles was instead a close look at the inner workings of three influential investor minds. Their lessons were instructive, illuminating and inspiring.

 

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Defining Social Impact
Moderator Richard Muller, (well qualified as COO of the Toniic global action network for impact investors), introduced our three panelists by first asking them about their investment approach areas of focus.

Brenda Irwin, Managing Partner at Relentless Pursuit Partners, explained that they concentrate on health, wellness and sport as ‘impact’ investments, expanding that definition to include sustainable models of products and services across those sectors.

Praveen Varshney – Director at Varshney Capital Corp, started his career investing in gaming, but moved towards more social awarenessshifted to social impact when he became a parent, making initial investments into solar tech company Carmanah Technologies Corp (CMH-T) Though despite that shift, Varshney says nothing has really changed.
“We are focused on entrepreneurs who demonstrate passion,” he said, “And because time is short, we are always looking for vision and for big opportunities that can make change happen globally at scale.”

Renewal Partners CEO Joel Solomon put it more simply.
“How much is enough? What’s the point of having money? To do good. So we look for businesses that move things toward better, focusing on organic food and green tech businesses in Canada and the US.”

 

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Getting past the ‘First Look’ stage and avoiding the ‘Piñata Effect’.
All three panelists consistently said that the most important factor for any investment is the people behind the company.

“The Piñata Effect is when entrepreneurs see an investor as this thing you just keep bashing at until money comes out,” said Solomon, “But on the other side, what we really ask ourselves is, are these people we want to go through tough times with?”

Irwin agreed, saying that getting though the first sniff test is about putting the relationship first.
My number one tip for entrepreneurs; look target investors in the eyes. We are more than the green dot on the name tag. Ultimately, the investment deal is like a marriage, and the term sheet is the equivalent of a pre-nup.”
“My number one tip for entrepreneurs; look your investor in the eyes. The investment deal is like a marriage, and the term sheet is the equivalent of a pre-nup.”

“It’s table stakes to be smart, driven, hard working and committed,” added Varshney, “For larger transactions, it’s the traction that makes the difference. We look for entrepreneurs that have bootstrapped their companies, even running on fumes to get to revenues that are working. Then it’s exciting to see what they can do with more proper growth capital.”

“Picking a favourite investment is like picking a favourite child… Delicate, but doable.”

That was the tweet sent out by Brenda Irwin, which provided an excellent platform for the panelists to highlight some social impact investment stars.

“I ask myself, are they part of something that matters?” Said Joel Solomon, as he rattled off a list of some of North Americas most inspiring brands. “Atira Women’s Housing, SPUD Organic Delivery, Happy Planet, Guayake, Stonyfield Yogurt, Seventh Generation, Luna Pads… They all did something to revolutionize their category. They shifted from social to mission.”

Irwin picked one clear example. “Social Nature Digital Marketing Company. They connect to our health, sport tech, fitness and nutrition mandate by using trusted influencers to connect consumers to products and brands that connect with their values. The founder, Annalea Krebs, has a track record of successfully building and selling a company and her vision is clear – to own marketing of natural products to the millennials.”

Praveen Varshney chose three examples. “Hempco (TSX-V: HFF). Hemp is on a big resurgence and it’s an amazing source of protein. Ronin 8 is an e-waste processor in Richmond that has a closed loop system that separates everything out. It’s basically guaranteed mining for gold, on land. And G-PAK – they make patented compostable biodegradable coffee pods, and are tackling the huge problem of throwaway plastic packsconvenience food packaging.

On lessons learned, and the challenging yet rewarding Vancouver environment
Sharing a few hours and some eclectic canapés in the halls of software giant SAP with a group of real money social impact investors may be just another day at the office for The Board of Change, but it’s an environment none of the panelists take for granted. They answered questions, shared some of the life learning they have acquired and explained why they continue to put up with some of the quirks and pressures of living in Vancouver.

“Vancouver has a lot of momentum in the social entrepreneur space'” said Varshney, “Here we can look find not just for ‘smart value-add investors’ but for ‘value-aligned’ investmentsas well.”

Joel Solomon took us back 20 years to the beginnings of the movement. “There used to be a lot of patting on the head, people saying ‘That’s a nice idea’. But I think of it as being based on very conservative values…. resources in, resources out. And after all, terms like social investing… What do they really mean? It’s just a little sign saying ‘There are good people here’.

Which is really a sign that could be hanging outside of every Board of Change event. So if you have read this far, nodding your head, you owe it to yourself to get out to the next one.

Special thanks to the panelists, our moderator Richard Muller, and our sponsors; Genus Capital, SAP, and Miller Titerle + Company (a law firm with an image of a bucking horse in Gastown on their website… Really!)

See you in November.

Lorne Craig
lorne@unicyclecreative.com

Photos by Daniel Rotman, Master Recycler Vancouver

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