Impact Investing

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Great Pitch! Can We See the Product?

By Roger Liew

After a positive initial pitch to Impact Engine, the next step typically involves asking for a product demo, because we love seeing the vision in your presentation come to life. You should put as much thought and preparation into the demo as you did into the pitch deck. Think of it as a continuation of that compelling story about your product and company that hooked us during the initial pitch.

During your demo, I’m interested in the features that deliver the product’s key value drivers, and form the basis of your company’s competitive advantage. Ideally, we walk out of the demo with a clear understanding of your secret sauce, and how your product solves a big social or environmental challenge. Be prepared for lots of questions during the demo process. We love to engage deeply with our companies, and the starting point for us is always to ask lots and lots of questions.

Begin the demo by setting the stage for what we’re about to see. Call out the most critical components of your product, explain why they are important and focus on showing those features to us. However, begin the demo by typing in the URL for the system we will see. Starting right from the beginning with something as simple as login demonstrates care and thoroughness and a complete product. I prefer to see the experience from the perspective of a user rather than an admin, and regular users tend to receive a more refined experience.

Let’s explore a specific […]

By |July 2, 2018|

Mind the Gaps: What’s Missing in Impact Investing Markets?

By Priya Parrish

When my former colleagues at the environment, social and governance (ESG) research pioneer, KLD Research & Analytics, launched the bellwether Domini Social Index in 1990, one purpose was to measure what socially responsible investing was going to cost an investor in terms of financial returns. The index, along with numerous academic studies, proved that ESG factor integration does not have to negatively impact financial performance. The evidence drove client demand and product proliferation across every asset class, sector, geography, and investment strategy. During this time, I led the effort to catalyze the creation of Northern Trust’s ESG fund offerings and witnessed nearly every other major asset manager roll out ESG strategies. Today, over 20% of professionally managed assets in the U.S. incorporates ESG factors in investment decision-making.

Impact investing, which has an explicit intention of generating a measurable social and financial return, is going through a similar transformation right now. Early evidence suggests the same conclusion: that all else being equal, impact investors do not give up returns. While impact investing can apply to a wide range of asset classes and investment strategies, its most common product offering (by number of products) is venture capital funds. As it gains traction among all investor types, the need for impact investment products across every asset class and strategy will be essential to meeting the growing demand.

My vantage point comes from the roles I have played as a family office Chief Investment Officer and personal impact investor. Having managed a multi-asset class portfolio across global private and public markets, […]

By |June 1, 2018|

Why We’re Thankful for Our Investors

By Jessica Droste Yagan

November is a month of reflection and giving thanks. At Impact Engine, we are especially grateful for our incredible investors. We launched our first accelerator in 2012 and our first venture fund in 2015 thanks to a dedicated group of experienced entrepreneurs and angel investors, philanthropists, and senior executives who believe in investing for both financial return as well as social impact. Many of them have also put their time with their money, supporting us and our portfolio with their expertise and networks. But we’re also incredibly proud of our investors for the work they do outside of Impact Engine, helping to lead the way for more impact. Below we’ve profiled just a few of our many investors who are linking business and social good in their own work.

The Entrepreneurs

Nicole Chavas

Nicole Chavas is CEO and Co-Founder of Fresh Coast Capital, an urban revitalization firm that develops green stormwater infrastructure as a vehicle to deliver social, environmental, and economic impact to the communities that need the most support toward achieving equitable climate resiliency. Since inception, Fresh Coast, a certified B-Corp, has raised over $3M in capital from across the impact investment spectrum, including equity, convertible debt and grant capital, from investors and funders such as the Kresge Foundation and the USDA Natural Resources Conservation Service.

Mike Evans

Founder of GrubHub, Mike Evans, started Fixer to get stuff fixed, easily, on his own schedule. Fixer is a same-day and scheduled handyperson app that makes it easy for clients to schedule a prompt, competent professional to fix stuff around the house. “Fixers” are full time employees with benefits who are given extensive […]

By |November 30, 2017|

Impact Engine’s 2017 Holiday Reading List

By Elizabeth Coston McCluskey

It’s time for Impact Engine’s third annual Holiday Reading List. For 2017, we decided to tackle the who-where-why-and-how of impact investing over the course of the year. We hope that during the holiday season, you are able to spend time with family and friends, and to reflect on the ways in which you’ve had impact this year. We encourage you to click through to the reports we’ve included in this list, as we hope that they inspire you to make new resolutions for impact in 2018.

The rationale

When we meet with entrepreneurs, we are interested in their solutions and whether they are innovative and scalable. However, a crucial part of our process is evaluating whether they have a deep understanding of the problem they are addressing. So while there is much to be celebrated in terms of progress this year, it is important to start with understanding why impact investing is so critical today. The issues our society faces are broad and deep. CFSI’s report on employee financial health outlines just how financially stressed people are these days. Earlier this year, the RAND Corporation detailed the rising prevalence and cost of chronic health conditions and the toll they take on individuals and society. And Stanford published a report on the state of racial and ethnic inequalities in education, housing, wealth, and a number of other arenas.

The players

The good news is that the list of people who are focusing on these issues and investing in solutions to address them is growing broader. 2017 saw everyone from tech companies to celebrities entering the impact investing fold. Salesforce announced the […]

By |November 20, 2017|

Impact Tech Opportunity Series (Pt. 4): Health

By Tasha Seitz and Chris Wu

As active impact investors, we’ve had the privilege of meeting hundreds of entrepreneurs doing incredible work across each of our four areas of focus: education, health, economic empowerment and resource efficiency. We’ve learned a lot about what opportunities exist to leverage technology for good and how various companies are solving these problems. As we celebrate our five year anniversary, we thought it would be valuable to share some of our observations with the broader impact investing field.

Part four in the series is an overview of what we’ve seen in the world of digital health. US healthcare spending overall represents 18% of GDP, and improving healthcare utilization by disadvantaged communities is an enormous opportunity to reduce costs and improve patient outcomes. The trend towards accountable care is driving investment in technology innovation, and we see many attractive and impactful investment opportunities in this space. We have observed four broad themes in the health sector.

Accessibility

The timely use of health services plays an important role in achieving the best patient outcomes. However, patients face many barriers to accessing services, including high costs, lack of insurance coverage, and lack of available services. Inadequate access to care can result in unmet physical and mental health needs, increased financial burdens, and preventable hospitalizations. Unfortunately, disparities in access persist along race and ethnicity, socioeconomic status, and geographic lines.

One of our portfolio companies, ConsejoSano, is deeply committed to breaking down barriers to adequate preventative and primary healthcare services for the 41 million native Spanish speakers in […]

By |October 26, 2017|

5 Questions You Need to Ask Before You Start Hiring

By Lindsay Verstegen

Last month at Impact Engine, we celebrated our five-year anniversary with a celebration and showcase event with our investors, mentors, and portfolio companies. The following day, we continued the celebration with a gathering of our portfolio company CEOs. We were grateful to have Lindsay Verstegen, VP of Talent at ShopRunner, speak to our CEOs about recruiting and hiring, including the five questions to ask before hiring, below.

Hiring is a highly personal process, one that should be very specific to you and your company. It’s important to approach the hiring process with enough of a game plan that you’re organized, but also with agility that allows for feedback to shape the process as it plays out. I’ve outlined five key questions that get at guidelines to the hiring process that every organization should consider when expanding their team. (Keep in mind, these are not hard-and-fast rules, but rather tips that should guide you!)

1. Who are you?

Before you begin the hiring process, it is important to go inward and answer some crucial questions to understand who you are as a company. This is a time for self-reflection. Ask yourself who you are and what you value. Remember that Sigmund Freud once said: “Being entirely honest with oneself is a good exercise.” It’s an especially good exercise when hiring. You should also ask customers and existing employees how they see you, and synthesize that information to determine your “true north.” If you’re not headed in the direction you want to be, this is the […]

By |October 26, 2017|

Impact Tech Opportunity Series (Pt. 3): Education

By Tasha Seitz and Brandon Boros

As active impact investors, we’ve had the privilege of meeting hundreds of entrepreneurs doing incredible work across each of our four areas of focus: education, health, economic empowerment and resource efficiency. We’ve learned a lot about what opportunities exist to leverage technology for good and how various companies are solving these problems. As we celebrate our five year anniversary, we thought it would be valuable to share some of our observations with the broader impact investing field.

Part 3 of this series provides insights into current trends we’ve seen in the education sector, the main drivers of those trends, and opportunities we see for impact.

Teacher Empowerment & Personalized Learning

Not long ago, a common solution to the problem of having a class with students’ proficiencies at different grade levels was simple, but ineffective. If a third of the class is performing above grade level, a third at grade level and a third below grade level, the most measured approach was to teach to the middle. While striking a seemingly fair balance, it effectively eliminated the attention of two-thirds of the class who thought it was moving either too quickly or too slowly, resulting in only one third of the class growing and learning. As technology has proliferated in classrooms across the country (almost half of classrooms use a digital device every day), teachers now have the increased ability to meet each student at current level of learning and help them grow from there. At the same time, there is increasing […]

By |September 29, 2017|

Impact Tech Opportunity Series (Pt. 2): Resource Efficiency

By Tasha Seitz and Alex Frederick

As active impact investors, we’ve had the privilege of meeting hundreds of entrepreneurs doing incredible work across each of our four areas of focus: education, health, economic empowerment and resource efficiency. We’ve learned a lot about what opportunities exist to leverage technology for good and how various companies are solving these problems. As we approach our five year anniversary, we thought it would be valuable to share some of our observations with the broader impact investing field.

Part two in the series is an overview of what we’ve seen in the world of resource efficiency. Because Impact Engine is focused on software and data-driven companies, it can be challenging for us to find companies that are a fit, but we have made two investments over the past year and hope to make many more in years to come. Below, we’ve identified three broad themes we’re seeing.

Water

Regional droughts and water shortages, as well as aging infrastructure in places like Flint, MI, have cast a spotlight on clean water access and increased the urgency for farms and government agencies to find more efficient solutions. There is also a growing need for more innovative sewer system and stormwater management tools. To put things in perspective, the annual revenue for products and services in the water industry exceeds $600 billion. In this sector, we’ve found that water-focused startups have one of three major end goals: conservation, improvement of water quality (either for drinking or for wild sources like rivers, lakes, oceans) or improvement of […]

By |July 31, 2017|

Foundation Impact Investing: Progress and Opportunity

By Jessica Droste Yagan

Last month, I attended the Mission Investing Institute (MII) at the Kresge Foundation in Troy, Michigan. Hosted by the Mission Investors Exchange, the MII is a “boot camp” of sorts for foundation leaders who are in the process of building or activating impact investing strategies. (Their annual conference will be coming to Chicago in 2018!)

To me, it’s a no-brainer that ALL capital designated for charitable purpose should be optimized to create public good (not just the grant dollars). I have been heartened to see more and more foundations dipping their toes in this space. At the conference, I saw great progress in two areas in particular: mission-related investments (MRIs) and place-based program-related investments (PRIs).

On the endowment side (MRIs), foundations are becoming more aware of the impacts of the investments in their endowment and how those impacts align (or not) with the foundation’s mission. Many are also intentionally investing in companies, funds or financial instruments that screen out negative impacts (socially-responsible investing) or drive positive impacts. Now, it’s easier than ever to learn from and follow leading foundations in this area. Foundations like the MacArthur Foundation are making impact investments and sharing their lessons learned. There are also a plethora of strategies and advisors who can help foundations with MRIs.

On the disbursement side (PRIs, as a complement to grants), foundations are being more flexible with the type of capital that will create impact. Most foundations actively investing in PRIs are doing so through place-based strategies, meaning they are making investments for the development of jobs or infrastructure in a very specific location. It helps that a well-established […]

By |July 21, 2017|

How to Get Involved in the Impact Investing Sector, Part 2

By Elizabeth Coston and Alex Frederick

Last month, we teamed up with Net Impact to publish “How to Get Involved in the Impact Investing Sector.” The blog post explains paths to exploring careers in impact investing and links to Net Impact’s recently launched Impact Investing Portal, which includes an Impact Investing Career Guide, additional articles and resources on the sector, and an impact investing jobs board. At Impact Engine, we get lots of inquiries about where to look for and apply to impact investing jobs and always direct people to our Social Impact Jobs Board and our most recent blog post “Looking for Jobs with Social Impact?” We also have an internship program for MBA students, where interns get a hands-on role on our deal team identifying potential portfolio companies, mapping out the investment landscape in our four social impact focus areas, and much more. One of our current interns, Alex Frederick, and our senior associate, Elizabeth Coston, share their experiences working directly in the impact investing fund space and offer advice to those looking to get involved in the field.

Elizabeth Coston, Senior Associate

What is the experience like being an associate at Impact Engine?

I spend most of my time doing due diligence on prospective investments. During a diligence process, we are trying to understand the the value proposition of a given company’s solution, the size of the market opportunity, and the potential for both financial returns and impact. We also care about who the team is, their backgrounds, motivations, strengths and weaknesses. In order to come up with a well-rounded assessment of a company, […]

By |July 14, 2017|

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