Good Capital


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Part one, the new moral hunger

Published in: Economy & Finance, Business

Good Capital

  1. 1. The new moral hunger And the Blended Value Market © 2007 all rights reserved
  2. 2. The hallway Investment office Foundation house, and investment tower The story of one couple, in two rooms and a hallway that wants to be a place. background
  3. 3. I talked to a guy last week. He lives in two worlds. With one hat on, he’s a major investor; runs billions of dollars in investment. Has been doing it for a long time. Early into venture capital, into leveraged buyouts, been making more money at higher rates of return than other people for a long time. background
  4. 4. He and his wife, who’s also a high-powered professional, have a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. They’re interested in our fund, and it’s causing them to think about their money in a different way. With their investment hats on they’re all about return, just risk return. How much money comes in how fast. background
  5. 5. In the foundation office, they just give money. They’re pretty traditional; their foundation has never done an investment related to its mission. Take away the billions they have to play with and they’re pretty much like most people. Investing and giving come from totally different places. background
  6. 6. But in the space between those two places, they want to be involved with our fund. In the hallway between those two offices, they can imagine investing. In that hallway is where we are creating a new asset class, somewhere between giving and investing. As clear headed as investment and as warm hearted as giving. background
  7. 7. Market interventions need to do the things the public safety net used to do. background Why a change is needed
  8. 8. Sustainable interventions using the market to change the game and help people bridge the gap What Goodcap does background
  9. 9. In traditional two pocket thinking, the money you invest flows back to you. Giving thru philanthropy flows away, with no return. background philanthropy investment
  10. 10. When good and capital come together, the money flows back to you after its made an impact in the world. It’s recyclable giving; more change for your buck. background
  11. 11. Rather than wondering What your money is doing in your name, you have the confidence of knowing -- by creating accountability for g ood impact, and accountability for financial performance Keep an eye on your money and your impact background
  12. 12. investment | philanthropy New capital with new power to make change
  13. 13. time consumption investment philanthropy overview
  14. 14. investment philanthropy time consumption Were part of a big change happening on a lot of levels. new patterns of change traditional behavior
  15. 15. investment philanthropy time consumption time > patterns <ul><li>Traditional </li></ul><ul><li>job security </li></ul><ul><li>company loyalty </li></ul><ul><li>corporate growth </li></ul><ul><li>New patterns </li></ul><ul><li>multiple employers </li></ul><ul><li>career loyalty </li></ul><ul><li>personal growth </li></ul>© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  16. 16. investment philanthropy time consumption consumption > patterns <ul><li>Mass consumption </li></ul><ul><li>commodification </li></ul><ul><li>created needs </li></ul><ul><li>believing ads </li></ul><ul><li>Conscious consumption </li></ul><ul><li>buying local </li></ul><ul><li>fair trade </li></ul><ul><li>deconstructing ads </li></ul>© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  17. 17. <ul><li>energy awareness </li></ul><ul><li>smart buying </li></ul><ul><li>local food </li></ul><ul><li>fair trade </li></ul>consumption consumption > patterns of change © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  18. 18. consumption consumption > patterns of change © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007 energy awareness smart buying local food fair trade
  19. 19. investment philanthropy time consumption investment > patterns <ul><li>Traditional Capital Market </li></ul><ul><li>two pocket thinking </li></ul><ul><li>risk and return </li></ul><ul><li>impact not your problem </li></ul><ul><li>Good Capital market </li></ul><ul><li>third pocket </li></ul><ul><li>blended value </li></ul><ul><li>risk return & impact </li></ul>© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  20. 20. investment philanthropy time consumption <ul><li>New patterns </li></ul><ul><li>third pocket </li></ul><ul><li>transparent intermediaries </li></ul><ul><li>recyclable giving </li></ul><ul><li>Traditional giving </li></ul><ul><li>second pocket </li></ul><ul><li>scarcity </li></ul><ul><li>costly fund raising </li></ul>philanthropy > patterns © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  21. 21. <ul><li>Kiva, Microplace </li></ul><ul><li>Acumen Fund </li></ul><ul><li>Social Venture Partners </li></ul><ul><li>400 giving circles </li></ul>philanthropy > patterns of change philanthropy © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  22. 22. philanthropy > mission investments Foundation investments start aligning with mission philanthropy
  23. 23. philanthropy > mission investments Similar nearby categories also experiencing an upsurge philanthropy Areas like Community investing, Community investment venture capital Now growing with at double-digit rates.
  24. 24. investment | philanthropy > patterns Attention Curve: Blended Value investing is growing © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  25. 25. investment | philanthropy > patterns Attention Curve © Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  26. 26. New money and new people are in the room, so the story is broadening to include the next concentric circle beyond the early adopters Not just the true believers anymore; GoodCap & Merrll Lynch private bankers are working on co-branded research on the Blended Value investing trend overview > emerging market signifiers
  27. 27. consumption > emerging market signifiers Some of the stories are like this one: Cleveland Coffee; a deep story with a daily decision An example of replicable conscious consumption
  28. 28. consumption > emerging market signifiers New habits create new opportunities. Take the Fair Trade coffee company that penetrated three cities, Cleveland, Boston and Seattle, with a curriculum for fifth graders in social studies, explaining fair trade in terms of other 10 year old kids growing up with their friends and extended family in their village vs. moving to a capital city squatter slum. The story was modified for the blue haired lady’s Sunday school and again for Rotarian interested in global security, etc. The result: a continuing 30 % annual increase in sales.
  29. 29. Telling the story like the brain is wired Truth in advertising investment | philanthropy > social investing social investing 1.0 social investing 2.0 Trapped in “Do just as well while doing good” Responding to a new moral hunger, embracing blended value
  30. 30. Old style social capital In the old style double bottom line view, the social value hides behind a spreadsheet. The new wave The total blended value becomes clear. as we acknowledge our desire for impact investment | philanthropy > social investing
  31. 31. © Aquillian Investments LLC, Tired: Efficient Frontier
  32. 32. © Aquillian Investments LLC, Wired: New Efficient Frontier - A new, third dimension where risk and return balance with impact.
  33. 33. Wired: New Efficient Frontier - A spectrum of players in the new space where risk and return are balanced with impact. © Aquillian Investments LLC,
  34. 34. Investor mindset has changed investment | philanthropy > patterns <ul><li>Good Capital </li></ul><ul><li>Calvert </li></ul><ul><li>Danone </li></ul>© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007 New, and established institutional funds are responding.
  35. 35. As clear headed as investing, as warm hearted as giving: The Blended Value Asset Class claims its space. investment | philanthropy > social investing
  36. 36. investment | philanthropy New capital with new power to make change
  37. 37. <ul><li>Working Today </li></ul><ul><li>Evergreen Lodge </li></ul><ul><li>Real Benefits </li></ul><ul><li> </li></ul><ul><li>Pura Vida </li></ul><ul><li>Indigenous Designs </li></ul><ul><li>The Benefit Bank </li></ul>good capital > where Social enterprises ready to grow
  38. 38. <ul><li>Graphic conceptualizations © Mark Beam, Collective Intelligence 2007 • Impact graphic © Aquillian Investments LLC </li></ul>accelerating the flow of capital to good Goodcap’s xigi map
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