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Good Capital Presentation
 

Good Capital Presentation

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Investing with passion for impact

Investing with passion for impact

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Good Capital Presentation Good Capital Presentation Presentation Transcript

  • Social Enterprise Expansion Fund Passionate Investing to Change the World
  • An innovative approach to doing good Social enterprise is a new way of doing business that creates deep positive impact in the world while making a profit… These companies need a new kind of capital.
  • The power of social enterprise
    • Social enterprises create sustainable, business-driven solutions to some of society’s most challenging problems.
      • The Grameen Bank is alleviating poverty in the developing world through microfinance.
      • TransFair USA is building demand for Fair Trade coffee using standards that let consumers know coffee growers get a fair wage.
      • Better World Books is selling used books online and channeling proceeds to literacy programs around the world
    • — Social enterprises combine the best of the business & philanthropic worlds.
  • RealBenefits: Linking to social benefits Non-profit web-based service that connects uninsured and low income individuals to public benefits Result: Since 2003, over 150 organizations have used RB to match 90,000 low income families with benefits worth over $400 million The Future: Raising $5M to deploy to more than 500 access points in 14 states by 2012, connecting individuals to more than $1 billion in benefits
    • The Problem
    • Hospitals provide over $25B of uncompensated care annually
    • Meanwhile, 50% of individuals eligible for public benefits are not enrolled
    • As a result, many low income people are left with medical debt while others are avoiding necessary medical care
    • The Solution
    • RealBenefits’ (RB) web-based service streamlines the complicated process of applying for public benefits
    • Hospitals use RB’s platform to reduces uncompensated expenses
    • RB spinning out a for-profit entity to commercialize and scale application
    Financial Upside: $1M in revenue in 2008 growing to $15M by 2012
  • Kiva: Loans that change lives Alleviating Poverty: Loans as small as $25 are helping the world's working poor make great strides towards economic independence -Kiva has administered $12M loans from over 123,000 people -Current loan volume of $1.5M per month; annual revenue of $1M+ Non-profit web-based platform that enables anyone with an Internet connection to lend to micro-entrepreneurs in the developing world Scaling Impact: Kiva needs $1M in growth capital to execute on the enormous popularity of the site and effectively administer a rapidly increasing loan volume
  • Growing market opportunities Est. Annual Growth % 30% 50% Fair Trade $2.2B Organic Apparel $583M Organic Food $15.5B Microfinance $7B 10% 20% 40%
  • Fast-growing markets 2002=1
  • Growing mindshare Attention Curve Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
  • The Social Enterprise Expansion Fund: A fund to accelerate impact
    • Good Capital is launching a $30 million fund to provide top social enterprises with the money and expertise they need to grow their businesses and expand impact.
    • We are investing in for-profits and non-profits that enhance the quality of life for impoverished people around the world through economic opportunity, healthcare, and education
    • We have identified an impressive pipeline over 30 compelling opportunities representing a total capital need of $130 million
    • We are engaging investors who want to put their money to work to create a better world.
  • © Aquillian Investments LLC, Aquillian.com We add the dimension of impact to your investing Traditional Investing, 2 Dimensional: Efficient Frontier, just risk & return. The Good Cap Bonus: The third dimension, the real world of impact is reunited with the traditional investment equation of risk and return.
  • Investors can magnify their impact We give investors an unmatched blend of social and financial return. Our fund will increase your impact in the world by creating sustainable change. We invest in companies that do good and make money. When our companies succeed, so will our investors.
    • We are the first institutional fund in the social enterprise space.
    • Being the market leader gives us the leverage to identify and get in on the best deals.
    • We are led by an unmatched management team with world class experience and success in:
      • Developing innovative social investment products.
      • Starting, growing, and selling businesses.
      • Investing in and exiting numerous venture investments.
      • Launching social enterprises.
    Why we will succeed
  • Our team
    • Tim Freundlich, Founding Principal
    • Over 10 years experience in the social capital markets at Calvert Social Investment Foundation
    • Helped build Calvert’s $120M Community Investment Note, $50M Community Investment Partners and $20M Calvert Giving Fund
    • The fund managed $250 million in social purpose debt in 225 investments globally with a 0.2% default rate and average gross yield of 4.25% over 10 years
    • Founding Partner, Social Venture Partners
    • Joy Anderson, Founding Principal
    • Founder and President of Criterion Ventures: successfully partnering with social ventures to overcome challenges since 2001
    • Counseled $14 billion Methodist pension fund on healthcare system
    • Network builder of thought leaders, philanthropists, investors, and non-profit executives
    • Expert in multi-stakeholder initiatives with faith-based institutions, philanthropy and government
    • Kevin Jones, Founding Principal
    • Accomplished entrepreneur who has started and sold several market dominant media and technology businesses for an average of 10x return
    • Former columnist for Forbes and Business 2.0
    • Angel investor in a range of technology businesses and social enterprises
    • Founding Partner, Social Venture Partners; former Board Member of Social Enterprise Alliance
    • Founder of xigi.net, an online social capital markets community
    • Marie Trexler, Chief Investment Officer
    • Accomplished strategic venture investor with more than twelve years of experience
    • 60+ venture investments at Intel Capital with 15 realized positive exits
    • Emerging markets at the IFC & others
    • Board of Advisors for NESsT, an organization supporting venture philanthropy and social enterprise
    • Kim Smith, the pioneer
    • Bart Houlahan, the operator
    • Houy-Ming Yeh, the proven VC
    • Russ Hall, experienced mentor
    • Chris Eyre, experienced mentor
    • Todd Johnson, the legal guru
    • Jed Emerson, the thought leader
    Advisors: pioneers, practioners, leaders
  • The design of the fund: Target fund size
    • $30 million fund with 10-12 portfolio companies; average investment size of $1 million - $3 million
    Geographical focus
    • >80% of companies located in the United States, with social impact both domestically and globally
    Sector focus
    • Diversified: Fair Trade, poverty alleviation, healthcare services, workforce development, education, software
    Investment type
    • Equity and structured venture debt
    Stage of investment
    • Later-stage expansion capital for enterprises with real revenue recognition and established management teams
    Exit strategies
    • Mission-aligned M&A, management buyouts, IPOs
    • Foundation buyouts of investments in non-profits
    Role of fund
    • Lead, co-investor, and coordinator of other capital
    • Ongoing engagement as board member/observer
    • Facilitate balance between growth objectives and mission
    Investor profile
    • High net worth individuals, families and institutions seeking to align investing with their values; $250,000 minimum
    Return profile
    • A blend of later-stage private equity and venture debt
  • Exit strategies
    • As the social enterprise space matures, there will be many viable exit opportunities:
      • Mission-aligned M&A (trade sales)
      • Management buyouts and stock repurchases
      • Structured debt with revenue royalty financing
      • Foundation purchase of non-profit investments
      • Dividend payments
  • Now is the time to get involved
    • A large pent up demand for growth capital exists from undercapitalized social enterprises.
    • The industry is at an inflection point and needs a leading institutional player to fulfill its potential.
    • Social enterprise needs impassioned investors who want to align their dollars with their values.
  • No interest in social impact or the cost of doing good Donors -Grants Debt (Nonprofit, ComDev, most PRIs) Expansion: Equity & Equity-like CDVCs/ SVCs Traditional Capital Market Purpose Maximize social return Balances SROI within business Balances SROI within traditional business ROI for expansion Maximize financial return within social or community development context Maximize financial return Risk/ Return High Risk No Return (tax break) Med/Low Risk Low Return Med/High Risk Med/Low Return High Risk Med/High Return Market rate risk/return Why they don’t plug the gap Limited scale Often lacks business case Demands collateral Lower risk profile doesn’t fund expansion Fills the growth gap, its what we are creating No appetite for the cost of doing good Fiduciary responsibility to get a market rate return Examples Foundations Calvert Foundation Partners for a Common Good NP Finance Fund Some Venture Philanthropy & Foundations No inst. Pac Com Ventures SJF Ventures Investors Circle Banks and Private Equity Social Return Financial Return The new space we fill…