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GoodCap turns three
This document discusses Goodcap, an investment fund that aims to generate both social and financial returns. It summarizes Goodcap's approach of investing in companies at the intersection of money and meaning. Initially, Goodcap faced skepticism from traditional investors but was able to prove its model works by investing in companies like Better World Books and Adina for Life that achieved strong social impacts and financial growth. Goodcap also helped validate the emerging field of social capital markets by launching an annual conference that has grown significantly in attendance each year. Looking ahead, Goodcap plans to focus on further investing in the fast growing fair trade sector and may raise a second fund dedicated to this area.
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GoodCap turns three
- 1. Accelerating the flowof capital to good © 2007 all rights reserved
- 2. Sustainable interventions usingthe market to change the game and help people bridge the gap What Goodcap does background
- 3. © Aquillian InvestmentsLLC, Aquillian.com Tired: Efficient Frontier
- 4. © Aquillian InvestmentsLLC, Aquillian.com Wired: New Efficient Frontier - A new, third dimension where risk and return balance with impact.
- 5. Like microfinance butwith millions invested in each company rather than hundreds of dollars. The efficiency of the market harnessed for good background
- 6. investment | philanthropyNew capital with new power to make change
- 7. The hallway Investmentoffice Foundation house, and investment tower That was three years ago. The initial market reaction was hard. background
- 8. I pitched oneguy when GoodCap started our social enterprise expansion fund. He lives in two worlds. With one hat on, he’s a major investor; runs billions. Been doing it a long time, survived, now doing well again. background
- 9. He said heloved our approach, and could imagine giving us million from his foundation, if we raised a venture philanthropy fund; which is a more sophisticated way to give. But he could not invest a dollar; he just could not think about his money that way. We made his head hurt. background
- 10. We said therewas a Social Capital Market and that we were going to build a fund there, at the intersection of money and meaning, where you could get scalable social impact and a double digit IRR financial returns. background
- 11. That made hishead hurt even more. He said our idea was wrong. Our plan was flawed. We were the wrong guys and we were going to fail. He didn’t want his name associated with us. He left us to pick up the tab for breakfast. background
- 12. That’s the kindof rejection all entrepreneurs face. But to his surprise, in the space between traditional investing and giving, at the intersection of money and meaning, in the Social Capital Market, we are actually making it happen. background
- 13. We did twothings to make people’s head stop hurting First, we invested before the fund closed in two good companies, Better World Books and Adina for life. Seeing our companies, and their combination of social and financial impact and our engagement, we started to make sense to people. But that wasn’t enough; we needed to show people that there was a real market emerging at the intersection of money and meaning. That we were not just lone, hand waving visionaries with a couple of lucky, one-off bets.
- 14. Our portfolio provesour point Better World Books: $18 million revenues online bookseller when we invested in April 2008. Now at $46 million (run rate) with $3m plus ebitda in 2009, and a $2 million line of credit paid off. Growing more than 35 percent year over year. Goodcap helped with founder transition, helped hire a CFO, a VP of marketing, helped create an analytics/yield management operation, worked on SEO, branding, marketing strategy and implementation. Top Genx consultants work cheaper for the meaning premium our companies give them. BWB’s secret sauce: the social mission cuts operating costs; people give us our books. The mission can survive the exit.
- 15. You canmix financial returns and social impact Adina World, a juice company founded by the founder of Odwalla, with management and investors who led Sobe, Izze and Oregon Chai has raised more than $20 million. GoodCap is at the table to make sure fair trade stays real. We have done that, partnering with traditional investors and keeping the mission focus intact through product changes and new investors.
- 16. Then we showedthem it wasn’t just us Next we created Socap, the Social Capital Markets conference. We attracted 650 people from 26 countries in 2008. We grew more than 30 percent this year, with 1050 people from 34 countries. With the top impact investors gathered in one place, people realized realized that the Social Capital Markets was real, that it was big and still growing. With the economy in a deep reset mode, it makes more sense than ever. Socap helps validate the category.
- 17. We may dofour more deals We are excited about the potential of Fair Trade. We have seen that Americans, even in the downturn, are becoming conscious consumers, not just cost conscious consumers. We are the only venture investor in Fair Trade and plan to do several more deals. We are building the market infrastructure to grow supply and increase demand.
- 18. Growing market opportunitiesEst. Annual Growth % 30% 50% Fair Trade $2.2B Organic Apparel $583M Organic Food $15.5B Microfinance $7B 10% 20% 40%
- 19. We are provingour point . In response to investor demand, we are considering raising a second fund, focused on Fair Trade, perhaps linking it to local food. Our idea seems to have been right. Our plan has not been flawed. We seem to be the right guys.
- 20. investment | philanthropyNew capital with new power to make change
- 21. Accelerating the flowof capital to good © 2007 all rights reserved
Editor's Notes
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- #7 1 click animation rground water depletion as input cost in salvadoran pepsi plant
- #8 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #9 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #10 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #11 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #12 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #13 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. He also has a foundation, pretty big one, hundreds of millions of dollars. It does a lot of good stuff. He’s interested in our fund, but he’s trying to find a way think about the money he’d put into it. With his investment hat on he’s all about return, just risk return. How much money comes in how fast. Our fund is helping social purpose businesses expand and grow to scale. But there’s a cost to doing good baked inside each of our deals; he’d make less money while doing good and he can’t put those two things together. But in his the foundation office, he just gives money. He’s pretty traditional; his foundation has never done an investment related to its mission. Take away the billions he has to play with and he’s pretty much like most people. Investing and giving are totally different things. But in the space between those two offices, he wants to be involved with our fund. In the hallway between those two offices, he 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.
- #15 Changed tagline from Accelerating Social Expansion to Impact GoodCap is launching a $30 million investment fund to give the top social enterprises the money they need to grow to scale. Our investment lets the top companies reach both their market and mission impact potential while recycling capital to investors. The best of business meets the best of philanthropy.
- #16 Changed tagline from Accelerating Social Expansion to Impact GoodCap is launching a $30 million investment fund to give the top social enterprises the money they need to grow to scale. Our investment lets the top companies reach both their market and mission impact potential while recycling capital to investors. The best of business meets the best of philanthropy.
- #18 Changed tagline from Accelerating Social Expansion to Impact GoodCap is launching a $30 million investment fund to give the top social enterprises the money they need to grow to scale. Our investment lets the top companies reach both their market and mission impact potential while recycling capital to investors. The best of business meets the best of philanthropy.
- #20 Changed tagline from Accelerating Social Expansion to Impact GoodCap is launching a $30 million investment fund to give the top social enterprises the money they need to grow to scale. Our investment lets the top companies reach both their market and mission impact potential while recycling capital to investors. The best of business meets the best of philanthropy.
- #21 1 click animation rground water depletion as input cost in salvadoran pepsi plant
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