Impact Investing

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Can Financial Advisors Embrace Impact?

Impact Engine has been fortunate to work with a lot of first-time impact investors. While we may be their first introduction to impact investing, we very much want to support them in doing more, and often share content or host events meant to introduce them to the range of possibilities across asset classes and impacts.

Unfortunately, because impact investing is not (yet) broadly embraced, investors can find it challenging to get started by working with their financial advisors. While some advisors are strong advocates for impact investing and very knowledgeable, many are not jumping up and down to help, either because they don’t know what to do or don’t want to do it, or both. If you’re not one of the lucky few who has great support from your advisor, here are three approaches that we’ve seen work.

Convince your advisor to learn.

While not all financial advisors understand or offer impact investing options, some of them will put in the effort to learn if you push hard enough. If they are willing to make the effort, you may want to be patient and be a partner in exploring with them: you could learn together and perhaps create even more impact by supporting the development of expertise and products that could then be offered to other clients, thus moving even more assets in the direction of positive impact. If you want to go this route, try showing them why it’s in their interest or that it’s been around long enough to demonstrate competitive financial returns. Once they’ve indicated they might try, you could share articles like “How Wealth Advisors Can Facilitate Impact Investments” […]

By |February 28, 2017|
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The Future of Term Sheets

For those of you less familiar with the venture capital world, a term sheet is a document detailing agreed-upon terms under which an individual or firm will invest in a startup. Traditionally, this document describes the economics of the deal, control provisions, information rights and provisions for investor liquidity. Today, as investors and entrepreneurs are increasingly interested in the social and environmental impacts of their businesses, we are seeing the term sheet evolve in parallel. In particular, we are starting to see investors requiring alignment of values or commitment to specific impacts.

In January, Obvious Ventures announced its “World Positive Term Sheet”, a concerted effort to help entrepreneurs articulate their values so entrepreneurs and investors are aligned and those values can drive business decisions. This term sheet challenges entrepreneurs to describe their companies’ policies in four main categories: core values; diversity, equity & inclusion; sustainability; and pledging & giving. While each term sheet will be tailored to the individual company, Obvious Ventures emphasizes the need for companies to outline specific statements for each category. For example, will your company create an equitable corporate structure or become a B Corp? Can your product or service be manufactured more sustainably? What are your company’s policies on recruiting for diversity or equitable benefits for maternity/paternity leave? The World Positive Term Sheet is an important anchor for companies, and a way to root business practices in values and ethics that can serve as a litmus test for both entrepreneurs and investors down the road.

A year ago, Kapor Capital launched the Founder’s Commitment, a “road map for startups to create a culture of diversity and inclusion […]

By |February 27, 2017|
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State of the Art: Impact Investing’s Evolution & Future

State of the Art: Impact Investing’s Evolution & Future

Fireside Chat with The Case Foundation’s Jean Case & Impact Engine’s Jessica Droste Yagan

On Tuesday, November 15th, the University of Chicago Polsky Center, Social Enterprise Initiative and Impact Engine hosted Jean Case, CEO of the Case Foundation, for a lunchtime discussion on the evolution and future of impact investing with Impact Engine CEO, Jessica Droste Yagan. Together they discussed philanthropy’s role as a catalyst for social change, how millennials will shape the sector moving forward, and the Case Foundation’s new impact investing visualization tool that provides both investors and entrepreneurs with more knowledge on this growing marketplace. Each attendee received the Case Foundation’s concise and informative A Short Guide to Impact Investing, which outlines impact investing for both new and seasoned investors.  You can check out a video of the entire session or read below for some key takeaways.

The Importance of Impact Investing

Jean Case and her husband Steve founded the Case Foundation in 1997 to reflect their family’s commitment to giving back. The foundation is committed to creating programs and investing in people and organizations that use entrepreneurship, innovation, technology and collaboration to have an exponential social impact. While all investment has an impact, the Case Foundation believes impact investments should be intentional, transparent, measurable and used as a tool to align capital investment with one’s values. The Case Foundation has become a national leader of the impact investing movement, creating pathways to impact investing through “educating, inspiring and activating” current investors to think critically about their investments. For those new to the field, Jean challenged investors to analyze the impact of […]

By |November 29, 2016|
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Newest Players in the Chicago Impact Scene

In past blog posts, we’ve written about the next generation of social entrepreneurs in Chicago and why impact entrepreneurship is thriving in Chicago. We’re excited to highlight a few of the newest players in the field; we couldn’t be more excited to be a part of the growing community of Chicago impact entrepreneurs, mentors, investors, and champions of impact!

Ekistic Ventures

In September, David Spielfogel and Brett Goldstein announced the launch of Ekistic Ventures, a VC firm that plans to invest in startups that make cities more equitable and efficient. Spielfogel is one of Mayor Rahm Emanuel’s former top advisors and Goldstein the ex-chief data officer for the city of Chicago. While working for the city, they noticed that young entrepreneurs building technology often lacked the urban strategy knowledge to turn their small scale ideas into big picture solutions. Ekistic Ventures has launched a $15 million fund that will invest in seed-stage companies bringing new solutions to critical urban problems. Ekistic takes a holistic approach to problem-solving, partnering with research institutions, big businesses, mayors, city government officials and entrepreneurs to tackle the most significant urban challenges.

INVEST Chicago

Launched in 2016 by Good City, INVEST Chicago is an initiative aimed at mobilizing individuals to give their time, talents and finances to social entrepreneurs and nonprofits making a difference in Chicago. They provide philanthropic grants and impact investment opportunities to nonprofits and social entrepreneurs to support strategic and sustainable ideas with strong leadership. INVEST Chicago works with foundations, corporate partners and the city of Chicago to identify and invest in projects serving the most under-resourced communities in Chicago. Their first portfolio, the Women’s Innovation Fund, […]

By |October 28, 2016|
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Investing in Better Health Panel & Showcase

Chicago is a hotbed of innovation in the healthcare industry, yet many healthcare startups lack access to investment capital at the seed stage. This intersection of healthcare and impact investing was the focus of the Investing in Better Health Panel & Showcase on Thursday, October 6th. Impact Engine co-hosted the discussion with MATTER and Furthur Fund, bringing together members of the healthcare and impact investing communities for an afternoon of discussion and demonstration.

The event began with remarks from Steve Collens, CEO of MATTER, and a panel over lunch with Jessica Droste Yagan (CEO, Impact Engine), Tasha Seitz (CIO, Impact Engine), Jordan Dolin (Co-Founder, Emmi Solutions), and David Cohn (CEO, Regroup Therapy). The panel focused on trends in healthcare and impact investing, and strategies for making a great return on investment while improving the healthcare system. Below are key takeaways from the panel.

Macro Trends in Healthcare

Jordan began by giving an overview of the macro-level trends seen in today’s healthcare industry. Money is a big motivator and a growing trend has been the transition from fee-for-service models to fee-for-value service models. The US healthcare system is globally ranked as one of the most expensive service models, spending nearly $10,000/person each year. And yet the system still suffers from the “Innovation Gap”, which means there is a growing need for fast, quality care and a large market, yet an increasing number of barriers to innovation. The system struggles to balance making money and creating a product that fixes modern issues at a reasonable cost.

Macro Trends in Impact Investing

Impact investing is a fast-growing practice in Chicago and beyond. Investors want to align their […]

By |October 14, 2016|
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Impact Investing Bootcamp

This month, Impact Engine, Arabella Advisors, and Forefront hosted an Impact Investing Bootcamp to educate and equip people to begin impact investing in their or their clients’ portfolios. Participants ranged from family offices and foundations to philanthropic and wealth advisers. They came with varying degrees of experience in impact investing, but all shared a common interest and commitment to action.

The day began with Tasha Seitz, Chief Investment Office of Impact Engine, and Julia Sze, Managing Director of Impact Investing at Arabella, running the group through an overview of impact investing and a discussion around the investment spectrum. They highlighted how each part of the spectrum might be relevant for different types of investor, and a debate unfolded around maximizing returns versus maximizing impact and where there are opportunities to have both. They shared the example of the KL Felicitas Foundation, which made a pledge to transform its portfolio into an impact portfolio a number of years ago. Since then, the foundation has reported on its track record and its specific investments and has demonstrated that a portfolio that considers impact can deliver market rate returns.  

Tasha and Julia also outlined three potential approaches to implementing an impact investing strategy in one’s own portfolio. The “Learn By Doing” approach entails making early stage direct investments and “seeing what sticks.” It is a good approach for those who are comfortable with risk, enjoy being up close and personal when working with entrepreneurs, and want to learn by doing and getting personally engaged. The “Assess and Upgrade” approach encourages investors to take stock of their public equity and debt portfolio, and to […]

By |September 30, 2016|
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Impact Engine Reflects on SOCAP16

SOCAP (Social Capital Markets), the world’s largest conference on social enterprise and impact investing, took place at the Fort Mason Center in San Francisco, California this week. Jessica Droste Yagan and Tasha Seitz of Impact Engine both attended #SOCAP16 to speak on a few panels and connect with others in the impact investing field. Earlier this month, Tasha and Jessica wrote an article on the SOCAP blog, sharing Impact Engine’s model and their thoughts on the state of impact investing in Chicago and beyond. Below, they’ve shared a recap and their thoughts on this year’s conference.

It was so great to attend SOCAP16 in San Francisco, surrounded by the energy and excitement of the SOCAP community. As veteran attendees (this is Jessica’s third and Tasha’s fifth conference), we are always energized to be around smart people who are passionate about the potential of the intersection of impact and markets. We even crossed paths with two of our own portfolio companies (Develop Link and Sokowatch).

One of the highlights of the conference was hearing from the many entrepreneurs building solutions to important problems. Tasha had the opportunity to speak with the 2016 SOCAP Scholarship Recipients, close to 150 entrepreneurs from 35+ countries, about how to get the most out of their conference experience. A key piece of advice — which applies to all entrepreneurs at all times — was to always be ready with a set of “asks” related to business support and introductions, and focus on building and nurturing existing relationships as well as making valuable new connections.

This year we also noticed a growing interest in direct investing among the investor community. […]

By |September 27, 2016|
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Impact Investing Evangelists

On the blog this week, we feature a guest post from Andrew Segal, a rising senior at Bates College who recently wrapped up a summer internship with Impact Engine. Andrew, a religious studies major, shares his thoughts on the intersection between religion and impact investing.

People and institutions choose to make impact investments for many reasons. Most often, impact investors understand the value that a safer, cleaner, and more egalitarian world will have on society, and they believe that they have an individual moral responsibility to help build a more perfect society. Today, an increasing number of religious institutions have been introducing their members to the concept of impact investing. Pope Francis himself recognizes the power that technology has in empowering the undeveloped world through social impact. By understanding the historical values and actions of these groups, it’s easy to see why these institutions have been championing a movement that is just beginning to gain widespread recognition.

Religious groups were some of the first organizations to think about the social impact of their investments. In 1758 at the Quaker Philadelphia Yearly Meeting, members of the Religious Society of Friends were prohibited from participating in the slave trade because they believed that buying and selling humans was morally wrong. The Quakers considered both the financial return and social impact of their capital expenditures to be moral imperatives rooted in their personal religious beliefs.

An early adopter and advocate of socially responsible investing (SRI) was John Wesley (1703–1791), one of the founders of Methodism. Wesley’s sermon “The Use of Money” outlined his basic tenets of social investing: not to harm your neighbor through your business […]

By |August 31, 2016|
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Why Priya Parrish Started Impact Investing

Priya Parrish is an investor in Impact Engine IV and an active impact investor. She has been involved with impact investing both personally and professionally. She currently serves as the Chief Investment Officer for the Schwartz Capital Group, a Chicago family office. Priya also sits on the investment committee for Social Venture Partners Chicago. Read more about Priya’s journey into impact investing and what she looks for in her investments.

You have spent your career in traditional asset management and wealth management. How did you learn about impact investing and become an active impact investor? How is it similar or different to traditional investing?

I began my career at a firm that provided ESG research to investors. At the time, I was fascinated with the connection between financial performance and social impact, but over time grew discouraged by the lack of impact that screen-based investment strategies in public markets could produce. As my career evolved into hedge funds and asset management more broadly, I noticed the growth in impact investing in private markets. It seemed to offer the direct impact that initially attracted me to the field, while also providing the opportunity to earn solid investment returns.

As an investor in Impact Engine’s portfolio companies, can you tell us about the strategies you use when evaluating investments? What are some of the key qualities you look for in the companies you invest in?

Evaluating impact investments is similar to evaluating traditional investments. I try to assess the team, product or service offering, business model, and industry dynamic to determine whether the company will be successful in generating strong financial and non-financial returns. Many of […]

By |August 30, 2016|
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How Prana is Changing Diabetes Prevention & Management

Prana Diabetes provides HabitNu, a scalable, evidence-based diabetes prevention and management program combining education, peer support and state of the art mobile technology. The program enables simple phone-based monitoring and recording of key health parameters while also leveraging a patient’s personal support network. Prana Diabetes graduated from Impact Engine’s former accelerator program in 2015. We caught up with Sindhu Rajan, founder and CEO of Prana Diabetes, to hear more about HabitNu and the future of the organization.

Tell us about HabitNu and the benefits of a support community when managing Type II Diabetes.

We know that Diabetes Self Management Education and Support (DSMES) programs are successful, and that 83% of those with access attend.  However, according to the American Diabetes Association (ADA), only 7% of the 30 million people with diabetes actually have access. Classroom-based programs are simply not scalable and they don’t fit the needs of a working population. HabitNu is a 16-week diabetes prevention or management program that is based closely on CDC’s successful classroom based Diabetes Prevention Program (DPP), but delivered to smartphones and tablets. It includes a comprehensive program with a toolbox for managing diet and exercise, weekly 5-minute interactive videos and text messages, and a system that allows you to link in your support network. Peer support is an integral component of successful chronic disease management. Research studies demonstrate that people with diabetes want support from an empathetic source. HabitNu has a private social network platform for participants where they are encouraged to talk about successes, challenges and failures.

You were recently one of six companies recognized by the ADA for your efforts to stop diabetes. Why do […]

By |August 24, 2016|

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