Private Funds as Impact Investors - Chicago Impact Investing Showcase Recap

By Lily Wang

The final event in Impact Engine's 10th annual Chicago Impact Investing Showcase took place on April 26th.  Concluding a series that explored various types of impact investors, this session focused on private funds.  It explored the important role funds play in aggregating and deploying capital on behalf of the many actors discussed in prior sessions such as governments, individuals, and foundations.  Jessica Droste Yagan served as moderator and provided introductory remarks, putting into context how funds might define their impact strategy within the 5P Framework.  

The ensuing discussion offered insights from both fund managers and founders, demonstrating the ways in which capital flows through private funds to generate impact.  Tasha Seitz, Partner at Impact Engine, shared how Impact Engine has approached impact investing over the past ten years, across six funds, 68 companies, and $124M in AUM. Tasha explained how Impact Engine invests in companies where financial returns and impact are expected to grow hand-in-hand, and how they seek impact commitments through mechanisms such as board seats, side letters, impact theses, and impact metrics.  She shared examples of such investments across Impact Engine's three primary focus areas:

• Economic Opportunity: BookNook is a virtual literacy and math tutoring platform that has enabled students to record a 1.0 reading level improvement 

• Sustainability: Measurabl is a sustainability performance platform that has provided close to 12M gross sq. footage of commercial real estate with actionable sustainability insights

• Health Equity: Workit Health is an end-to-end virtual solution for addiction treatment with 1.5K customers, of which 95% reported an improvement in quality of life

Tasha then invited two Chicago-based entrepreneurs to share their views on how working with impact funds has enabled them to achieve their intended impact. Feyi Olopade Ayodele, CEO of Cancer IQ, shared an overview of how her company aims to end cancer with early detection and prevention. She explained how Cancer IQ has been able to help patients, health providers and diagnostic partners stay ahead of cancer with their precision prevention platform, demonstrating a 16% increase in early diagnosis.  Feyi shared that working with Impact Engine has been instrumental to realizing her vision of Cancer IQ as a broad network that engages all parts of healthcare.  While traditional VC firms may have pushed Cancer IQ to consider a different path due to the slow regulatory environment of the healthcare industry, working with impact investors allowed Feyi to stay true to her mission.  Cancer IQ is now integrated across 40 health systems, 200 hospitals, and recently closed a Series B round.

Next, Mindi Knebel, founder and CEO of Kaizen Health, shared how working with investors like Impact Engine has enabled her to expand Kaizen Health's impact reach.  The company had its start as a platform connecting healthcare with transportation.  However, the company has since expanded into additional projects by leveraging its platform to increase public transit accessibility, reduce infant mortality through a maternal transportation program, improve food security during the COVID pandemic, and offer up to 7,000 monthly rides for Chicago Public Schools.  Mindi thanked Impact Engine for believing in Kaizen from the start, and for helping expand Kaizen's reach across a broad range of social determinants of health.

Andy Zopp, Managing Partner of CAST US (Cleveland Avenue State Treasurer Urban Success Fund), then took the stage to share more about how CAST US is working to bridge the capital and resource gap impacting Black, Latinx, and female entrepreneurs in Chicago's South and West Side. The $71M portfolio launched last year and has already invested in 12 high-impact companies led by historically underserved founders.  Andy invited two of these entrepreneurs to share how working with CAST US has enabled them to not only access catalytic capital, but also receive support and empowerment from Cleveland Avenue's entrepreneurial development expertise.

Sergio Suarez, CEO of Tackle AI, began with a powerful story of how he looks forward to the day when founders and investors from the Latinx community are common in the VC world.  He expressed appreciation for funds like CAST US for driving towards that vision and supporting diverse founders.  Sergio explained how Tackle AI is transforming the way companies use and manage unstructured data.  Tackle AI enables the redaction and extraction of data in documents at higher speeds, with greater accuracy, and at a fraction of the traditional cost by combining deep learning with core logic engines.  Tackle AI has experienced rapid growth, tripling their valuation in the past 8 months, and anticipating a 4x increase in revenue for this year. 

Lastly, AYO Foods co-founder Perteet Spencer shared how CAST US' support has been instrumental to AYO's success in bringing West African foods to a broader audience.  AYO aims to celebrate the many flavors of the diaspora, while enriching nutritional value through diversified crops and creating lasting economic value through farm partnerships.  Since launching in July 2020, they have tripled their frozen food line from three to nine items, and have expanded their distribution reach 90x, growing from 50 doors with Whole Foods to 4,700 doors across several major retailers. They also built their first farm in Liberia in partnership with Girl Power Africa, offering new economic outcomes for women in the region.

The speakers showcased just a small slice in the diversity of impact that private fund investments make possible. They each emphasized the unique value that impact investors bring to the table, and the ways in which impact-aligned founders can maximize their reach with similarly impact-aligned capital.  Importantly, they demonstrated how there is no need for trade-offs between financial and social returns in today's ecosystem.   Jessica closed out the session by sharing the current landscape of impact investing funds in Chicago, with over 30 firms investing across various asset classes, themes, geographies, and the 5Ps. On behalf of Impact Engine, Jessica expressed appreciation for the continued momentum and growth of this landscape over time, and excitement for what is yet to come for impact investing.

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Find more sessions on the 2022 Chicago Impact Investing Showcase page.

Information presented in this document is intended solely for informational purposes and should not be interpreted as a recommendation or offer of securities or any other financial instrument. Unless otherwise indicated, the information contained herein is current as of the date of publication of this document and is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.

Foundations as Impact Investors - Chicago Impact Investing Showcase Recap

By Ander Iruretagoyena

On Tuesday, April 19th Jessica Droste Yagan moderated the third session of Impact Engine’s 10th annual Chicago Impact Investing Showcase. Throughout this four part series we explored the different types of impact investors (Governments, Individuals, Foundations, and Private Funds); but in this session we highlighted the role of foundations as impact investors, through both endowment and grant or donor advised fund pools of capital.

Following opening remarks by Jessica, the session opened with Debra Schwarz of the MacArthur Foundation. Debra explained how the Foundation defines impact investing and introduced one of the Foundation’s investees, Leon Walker from DL3 Realty Advisors, to talk about his work using responsible real estate development as an engine for economic opportunity (a theme very close to home for IE and most directly advanced by our investment into PadSplit). Laura Kernaghan shared how the Chicago Community Trust (CCT) engages in impact investing, and introduced Leah Missbach Day to talk about her experience in impact investing through her donor advised fund at the CCT, World Bicycle Relief. Lastly the conversation was concluded by Robert Tucker who spoke about the inspiring work of the Chicago Community Loan Fund (CCLF) which can also be invested in via the various donor advised funds of the CCT. All the speakers are real life examples of the good that is created when foundations reach investees through impact investing.

Debra noted that MacArthur Foundation, as an organization that has been around since 1983, manages $8B+ in AUM, and has made over 200+ investments throughout Chicago and the globe, they know there is a spectrum to impact investing. On one side of the spectrum falls conventional investing, and as one moves to the other side they encounter Responsible Investing (Screening), Sustainable Investing (Prioritizing ESG Factors), before finally arriving at Impact Investing which they divide into Finance 1st and Impact 1st. (At IE we think slightly differently and see us having financial returns because we lead with impact but regardless the overall point is valid.) Although not all of MacArthur’s assets are invested with an impact first mindset (~$400M are distributed across Benefit Chicago, Catalytic Capital Consortium, CDFIs, Housing, Chicago, and Climate Solutions), they are making strides throughout the whole portfolio and making sure that everything they do ties back to 3 pillars: providing mission driven innovation, being equitable and inclusive, and lastly being sustainable.

As an investee of the Foundation, Leon said DL3 Advisors has helped create over 3,000 jobs in the Chicago area by doing things that no one was willing to do like building a WholeFoods complex in Englewood. Despite being one of the most heavily trafficked parts of the city, Engelwood was continuously overlooked by developers and fell victim to the wide disparities evident in the city which extend beyond economic terms and even demonstrate up to a 15 year gap in life expectancy vs. some other areas in the North of the city. By working closely with the community, DL3 avoided unchecked proliferation and understood that “revitalization” does not have to mean gentrification. They follow a SEED framework: Shape needs into actionable projects, Empower local developers/ contractors, Expand with non-profit partners, and Direct contracts and opportunities. DL3 also adds special emphasis to the last letter by partnering with efforts like CEMDI. DL3 is just getting started and is currently raising $50M in impact equity to pursue large scale placemaking strategies in Jackson Park, Englewood, South Shore, and Grand Boulevard.

Laura noted that CCT is a public charity with the mission of facilitating philanthropy by pooling donations to local nonprofits. They have over $4B AUM and manage ~100 different portfolios that prioritize impact above all else. To help in this mission, CCT has pioneered a platform for various different impact investing opportunities in order to help donors align their charitable assets with their personal values and amplify the charitable assets and philanthropy of the trust. The platform has worked to ensure that several of the available options focus on disrupting the structural issues with the allocation of capital to individuals and communities. As a user of the platform, Leah reminded us of the powerful words of Rev Dr Martin Luther King Jr:

“Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.”

Lastly we heard from Robert about the offerings of the CCLF. This CDFI has had as its mission the economic development of the Chicagoland community since its founding back in 1991. Originally established with a $200K investment now worth ~$140M, this CDFI has helped dozens of projects and institutions all while maintaining an AA-*** & Policy Plus rating from AERIS. Some of its recent fundings include the XS tennis center, Ignite Technology, and the Chicago Neighborhood Rebuild program.

In this session we heard both from a large private foundation and a large public foundation (as well as some of their investees and donor advisors), however the topics discussed here are not exclusive to these behemoth organizations. Jessica concluded the session by sharing a personal story of her experience as a trustee of a small family foundation and provided some examples of how they have been able to embed impact into the allocation strategy of the endowment without sacrificing any financial returns, as well as amplifying impact in their program-oriented investments. If you find yourself in a similar situation we urge you to question your DAF fiduciary or foundation advisors and to please count on Impact Engine as a resource to help advance you in your impact journey.

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Find more sessions on the 2022 Chicago Impact Investing Showcase page.

Information presented in this document is intended solely for informational purposes and should not be interpreted as a recommendation or offer of securities or any other financial instrument. Unless otherwise indicated, the information contained herein is current as of the date of publication of this document and is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.

Individuals as Impact Investors - Chicago Impact Investing Showcase Recap

By Chris Wu

The second event in our Chicago Impact Investing Showcase series took place on Tuesday, April 12th. The focus of this session was the role of individuals as impact investors. Jessica Droste Yagan served as the moderator and made some opening remarks to help frame the discussion. She began by defining some commonly used terms such as socially responsible investing, ESG, and impact investing. Jessica also gave a primer on the 5P Framework, which is a helpful framework for understanding the impact in impact investing.

After the opening remarks each of the panelists made some introductory remarks, beginning with Noelle Laing, the CIO of Impact Investing at Builders Asset Management. Builders Asset Management is part of Builders Vision, the impact platform for Lukas Walton. The goal of Builders Vision is to build a more humane and healthy planet through four impact focus areas: Oceans, Climate & Energy, Food/Ag, and Community. The organization takes an integrated approach to driving system-level change; they use a combination of grants, impact-first investments, market-rate investments, advocacy, and coalition building as a means to achieve that goal. The Builders platform is organized into three strategies:

• Builders Asset Management - The asset management team invests strategic, patient capital responsibly across an ambitious, diverse portfolio. The team generates returns that are reinvested to drive long-term impact.

• Builders Private Capital - The direct investing team provides capital, mentorship, and value-added resources to entrepreneurs innovating to build a better future. S2G Ventures is part of the direct investment team, they back entrepreneurs across the supply chain from soil to shelf.

• Builders Initiative - The philanthropic team seeks to accelerate and catalyze change through grant-making and impact investing in people and organizations on the frontlines of change. They have a special focus on Chicago and the Midwest.

Noelle explained that you need multiple tools at your disposal in order to solve the complex challenges facing our planet. Their platform allows them to take an “Issue First - Tool Second” approach. Builders Vision starts first with the issue that needs to be solved, then sets out to go find the best tool in their toolkit that they have to help solve it. Noelle gave some examples of some of the endowment investments they have made recently. They had invested in an access fund focused on low-to-moderate income (LMI) communities. Chicago place-based bonds is another specific focus area. They have funded an affordable housing unit in Englewood, and also invested in intergenerational housing for seniors that take care of you and for youth that are aging out of foster care. These investments are particularly meaningful to them because those closest to the problem are best equipped to solve it. Some of these opportunities are offered through mutual funds, so folks have access to it even if they’re not a high net worth individual (HNWI).

Noelle then invited Kate Danaher, Managing Director of S2G Ventures Ocean and Seafood to talk about the work they’re doing to make our oceans more sustainable. Kate has spent her career in impact investing. She is also passionate about giving unaccredited investors a chance to become impact investors. Kate joined S2G because the Builders Vision is an incredibly powerful tool for change. Kate gave an example of one of their impact investments, profiling a company called Aquatic Protein based in Beardstown, Illinois. The company is addressing two critical issues: 1) the proliferation of invasive asian river carp in the river basin there, and 2) the need for low cost fish meal for pet food and other land animals. There is a big need to replace wild catch with a sustainable low cost solution. The government spends millions of dollars to try and get rid of the invasive carp. Aquatic Protein creates a business case for the restoration work by actively fishing the carp. Aquatic Protein holds a proprietary zero waste process for producing the fish meal. They focus on remediation and partner with local fishers and give incentives, and have been removing more carp than anyone else in the area. The company’s technology is highly scalable, and can be applied to other invasive species outbreaks in waterways and other regions beyond the midwest. It has been a strong investment for S2G’s venture capital arm because the impact that is enabled by the growth of the business (similar to product-based impact as described in the 5P Framework). If this company is successful, the core of its business could have a meaningful impact on the health of the IL river basin.

Next, Jane Direnzo Pigott, Managing Director of R3 Group, spoke about her personal journey as an impact investor. At R3, Jane specializes in providing leadership, change, and talent consulting to organizations. Prior to R3, Jane practiced law for over 20 years, most recently at Winston & Strawn where she served as chair of the global Environmental Law practice group. Jane became an impact investor because it allows her to align her investments with her personal values. Jane actively invests both directly in companies as well as in funds, with a focus on opportunities where she can utilize her expertise and resources to support enterprises with women and BIPOC founders and leaders. While her personal impact investment thesis centers on improving equity and access, she utilizes the 5P Framework to identify where there might be compelling opportunities. Jane believes that equity has an impact on every single investment, whether it’s a climate change or health investment, and that diverse teams outperform. When assessing opportunities, she looks to define the impact, quantify the level of risk, set a minimum ROI, and to back disruptive technologies. Jane initially looked towards traditional institutions to source investment opportunities and measure impact, but learned that she had to take a more active, hands-on approach. She works with a group of others to help source and diligence deals, and she takes more personal responsibility for looking at exactly what she will measure for impact and be willing to walk away from opportunities that don’t fit her criteria. If she is presented with a strong investment opportunity that does not have diverse teams or at least have a strong plan for addressing DEI, it would not meet her criteria.

Jane highlighted First Women’s Bank as one of her impact investments and introduced Melissa Widen, the bank’s CAO and General Counsel. Melissa discussed how the women’s economy lacks access to capital they need to grow. Women own 42% of all businesses in the US. 50% of those are owned by women of color. This represents 13 million businesses, it’s an intersectional issue. The women’s economy (women-owned and women-led) together needs capital to grow and thrive. Gender disparity is holding women back. Only 16% of all commercial loans go to the women’s economy, that represents just 4% of the total dollars lent. The First Women’s Bank addresses this, it aims to level the playing field to promote financial inclusion across the board, empower women economically. The path to forming First Women’s Bank was challenging, they were viewed as a group of women with no track record, fundraising in the middle of a pandemic within a highly regulated industry. Despite all those challenges, they were successfully able to raise $32.6M in capital.They received their charter from the state of IL last year, arranged FDIC insurance, and had a grand opening in the fall of 2021. Their unique banking practices are now disrupting traditional banking. First Women’s Bank offers a different way to think about your banking relationship. Banking clients are increasingly asking questions like: How diverse is this bank’s board? What are they using my money for? What does the bank stand for, what are their values? Does it align with mine, what is their stance on DEI? In terms of approach, First Women’s Bank leans heavily into SBA lending, which is ideally suited for the small business economy and a great fit for the women’s economy, which tends to be service related businesses.

The session wrapped up with a Q&A session discussing how to balance due diligence between impact and financial return. The panelists also shared resources on how people can begin to dip their toe into the water of impact investing. The list of resources include: 

• CNote

• Honeycomb Credit

• RSF Social Finance

• Calvert Impact Capital

• Invest for Better

• Toniic

• The ImPact

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Find more sessions on the 2022 Chicago Impact Investing Showcase page.

Information presented in this document is intended solely for informational purposes and should not be interpreted as a recommendation or offer of securities or any other financial instrument. Unless otherwise indicated, the information contained herein is current as of the date of publication of this document and is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.

Governments as Impact Investors - Chicago Impact Investing Showcase Recap

By Sophia Friedman

2022 is an exciting year as this marks Impact Engine’s 10th annual Chicago Impact Investing Showcase! This year’s showcase explores the roles of four key impact investor types: government, individuals, foundations and private funds. Our first event on April 5th focused on on government. Jessica Droste Yagan moderated a discussion with Melissa Conyears-Ervin (Treasurer, City of Chicago), Michael Frerichs (Treasurer, State of Illinois), Bryan Echols (Director of Impact Investments, Illinois State Treasurer), and Brad McConnell (CEO, Allies for Community Business).

The event kicked off with opening remarks from Jessica around how we think of terminology around impact. She explained the various types of investing: socially responsible investing (SRI), environmental, social and governance (ESG) investing, and Impact Investing. As Jessica explained, SRI includes screening investments in or out based on whether or not they align with a specific mission or set of values; ESG includes investing in companies based on performance in three areas: environment, social, and governance (particularly in terms of how a company is run); and impact investing as intentionally investing to create a specific social or environmental impact. Impact Engine follows the impact investment approach and Jessica walked through the five main ways that investors can intentionally create impact via the 5P Framework. The 5Ps include: Product, Place, People, Process and Paradigm, and investors can invest with one or more of these in mind at any time.

Following the introductory remarks, the four speakers provided real world examples of the role the government plays in investing for impact.  Brian Echols, the Director of Impact Investments for the Illinois State Treasurer, brought up key questions that his team is focused on addressing: How do we create opportunities in low to moderate income communities? What role does the banking sector play in how we address systemic racism? He touched on these questions and more throughout his remarks.

City Treasurer Conyears-Erving explained that as Treasurer, she does not believe that it is enough to simply earn money for taxpayers. Instead, her team plays an active role in making people’s lives better. She explained that the government has to hold itself to a higher standard and aim for better outcomes beyond only focusing on the greatest possible financial return. Treasurer Conyears-Ervin explained that in 2020, she joined together with Illinois State Treasurer Michael Frerichs to create the Advancing Equity and Banking Commission (AEBC), a network of prominent banking institutions anchored in Illinois and committed to advancing equity and eliminating systemic racism in the banking industry though equitable hiring and lending and investment in Black neighborhoods.

State Treasurer Frerichs also explained that in his view, the key to growing our economy is to support local innovation and to do so equitably. He explained that his team has a job to invest while also having a responsibility to maintain the long term fiscal health of the state, while tending to the wellbeing of communities he represents, which includes economic security of millions of workers in the state of Illinois. Treasurer Frerichs explained that his team is laser-focused on innovating and adapting programs to meet the needs of local constituents while fulfilling their fiduciary responsibilities. He explained that his office integrates material ESG factors across all investment processes, from evaluation of individual issuers to the selection of fund managers. Both State Treasurer Frerichs and City Treasurer Conyears-Ervin stressed that they are focused on growing and investing in underserved communities as they believe there are great investment opportunities and opportunities to create jobs, grow businesses, and foster long term economic prosperity.

Brad McConnell, CEO of Allies for Community Business (A4CB), explained how his organization supports small businesses and thereby strengthens communities.  A4CB’s mission is to provide the capital, coaching, and connections that entrepreneurs need to grow great businesses, create jobs, and wealth in their communities. He explained that their team believes that investing in small businesses and working with entrepreneurs who are already embedded in their own communities is the most consistent and efficient way to create jobs and therefore opportunity and wealth in underserved communities.

Brian Echols explained that when his team thinks about the 5P framework, they invest in people, place and programs. Ultimately, their focus on these areas can often lead to a paradigm shift. Brian explained that in serving the various diverse metropolitan areas within Illinois, he recognizes that there are communities in each that lack investment. When thinking about place within the 5P Framework, it is important to recognize that resources flow differently in different parts of the state and his team must listen to what each individual community needs. Then, it is important for the government to leverage state resources to bring equity in how they invest, and to make investments that will improve individuals’ quality of life. Brian feels that his team’s responsibility as a governmental entity is to be the first to step out and support these communities in the hopes that private sector and philanthropy will follow suit and add to the investment into these communities.

The speakers brought to life the role that cities and governments play in investing in our communities. They explained the various different ways that impact investing can work but all stressed the importance of following through on our commitments, tracking the capital to understand where it ends up, measuring impact and ultimately being able to communicate that impact outcomes back to the community. 

In the Q&A, viewers asked what ordinary citizens can do to get involved in the government’s actions around impact investing. The panel’s recommendations included visiting 350.org which facilitates opportunities for residents to be involved with community organizations that are making a difference, or visiting Allies for Community Business at A4CB.org which offers various opportunities for individuals to support small business owners via coaching, skills development or providing grants or loans. Lastly, the Treasurers suggest reaching out to your elected officials with any ideas or recommendations to be more involved in this space.

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Find more sessions on the 2022 Chicago Impact Investing Showcase page.

Information presented in this document is intended solely for informational purposes and should not be interpreted as a recommendation or offer of securities or any other financial instrument. Unless otherwise indicated, the information contained herein is current as of the date of publication of this document and is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.

A Recap: Session #3, Investing in Health Equity

By Chris Wu

The third and final session of Impact Engine’s 9th annual Chicago Impact Investing Showcase wrapped up our series with a great discussion on health equity in Chicago, moderated by Elizabeth McCluskey. In reference to our 5P Framework, this session focused on Product-based impact where the product or service a company is providing will directly create impact and connect growth and revenues with positive social and environmental impact. Joining Elizabeth for the event were panelists Justine Mitchell (SVP of AtHome at Array Behavioral Care), Nate Pelzer (the CEO and Co-Founder of Clinify Health), and Will Boeglin (the CEO and Co-Founder of TimeDoc Health). 

To frame the day’s discussion, Elizabeth referenced a study on life expectancy published by the NYU School of Medicine. According to their findings, Chicagoans who live in Streeterville have a life expectancy of 90 years, while 9 miles to the south in Englewood the average life expectancy plummets to just 60 years. The researchers studied life expectancy in America's 500 largest cities, and that 30 year gap represented the nation’s largest disparity. Clearly there are acute problems around both health care delivery and health equity when people only a train ride away are living 30 fewer years. More recently, the Black and Latinx populations in Chicago were disproportionately affected by COVID-19. During the fall, majority Latinx zip codes in Chicago were experiencing the highest rates of infection and Black residents were experiencing death rates 2x that of White residents. Here are some highlights from the discussion:

Q: What is driving disparities in health and why is values-based care so important for serving underserved for providers to facilitate their care?

Nate Pelzer: The simple answer is it’s historically systemic racism at its core. Over the last few centuries through things like redlining, busing, Jim Crow, you have had disinvestment in certain geographic areas in the country. And as these areas have had less investment in health care and fewer employment opportunities, the result is that people have less access to primary and preventive care. Over time, those things that were once just social factors begin to impact their health outcomes. Moving to values-based care is important in Medicaid because it shifts the focus from patients coming in when they need something acute in nature to instead putting the onus on physicians to be more aware of what the population health needs of their patients are in general. 

Q: What are you seeing in terms of disparities in conditions that patients are suffering from and ways you’re finding to intervene?

Will Boeglin: We see a high incidence of both chronic medical conditions and behavioral health conditions in the dual eligible population (people that qualify for both Medicare and Medicaid). But even more so than clinical intervention, often what is needed is social work to address social determinants of health. In this patient population, 40% don’t have a smartphone and 25% don’t have access to WiFi. When you think about the transition to telemedicine that the pandemic has necessitated, that creates some really serious barriers to receiving care. A significant percentage of the dual eligible population don’t have a caregiver at home, they live alone. That means no one is advocating for them, encouraging them to stay on track, reminding them to pick up their prescriptions, or helping them get scheduled for vaccines. In one instance, one of our care managers was speaking with a patient that was homeless and currently living in their car. They didn’t have the paperwork or authorizations from the health center to get admitted to a local shelter. So the care manager worked with the health center to make sure they completed all the correct forms, shared that with the patient and the shelter, and was able to get the patient admitted. There are lots of examples like that of our care manager engaging to help ensure positive interventions, whether it’s connecting someone to Meals on Wheels, trying to find discounts on medication to make their meds more affordable, or referring patients to resources the local community centers on aging. 

Q: What have you seen in terms of mental health throughout the pandemic? What populations have seen an increase in need?

Justine Mitchell: It’s well documented that there is a widespread increase in need for mental health services because of COVID. Social isolation, anxiety, lack of control, job loss, disruption in the home and grieving over loss of loved ones have really driven people to need and utilize behavioral health services more. From a forced adoption point of view, at CMS (Centers for Medicare & Medicaid Services) a lot of federal regulations have been relaxed this year around telehealth and licensure across state lines. Also, hospitals and health systems who may have had some utilization of telehealth, and comfort with it, have been forced to move to telehealth and accept it as a standard of care. We’ve been seeing an increase across multiple business lines. On the direct-to-consumer (D2C) side, utilization has grown month-over-month sometimes as much as 18%. It reflects an increase in need for behavioral health services which is a negative, but on the other hand it’s good that people have access to the behavioral care they need via telehealth – it’s broken down some of the old barriers. In behavioral health there is a supply/demand problem, there simply aren’t enough licensed clinicians to meet the needs of the patient population. Given that, telehealth and video bridges that gap and increases access to care for patients in underserved areas, both urban and rural, even in their home in a more effective way. Combining a D2C product plus more access in clinical settings has been the way to take a bite out of behavioral health deserts.

The entire Impact Engine team is grateful to Justine, Nate, and Will for taking the time to share their perspectives on these important issues that affect all of us. We’re glad that the talented teams at Array Behavioral Care, Clinify Health, and TimeDoc Health are all so passionate about health equity and working hard to develop solutions that address these disparities in health. We’d also like to thank the MacArthur Foundation for their continued support of this annual Chicago showcase event. See you next year!

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Missed this session or want to revisit the full discussion? Visit here for a full recording.

A Recap: Session #2, Any Company Can Be an Impact Company

By Roger Liew

This session was moderated by Jessica Droste Yagan, Impact Engine’s CEO, and the intention was to demonstrate how any company, through being intentional and positive in their business practices, can be impactful. Jessica’s own career has focused on the overlaps between making money and social good, and she used this experience to explore how three different organizations of very different scales apply process-based impact. The discussion illustrated that no matter the product or service of the organization, processes can be modified to produce benefits for society or the planet. 

The basic question posed was “how do you find the win-wins where what’s better for the planet or better for society can be better for the bottom line?”. Our goal was to inspire, educate, and offer ideas anyone can apply in their workplace.

The three panelists were: 

Steven Dyme, Co-Founder & CEO, Flowers for Dreams

The company, based in Chicago, offers floral bouquets where a portion of proceeds are donated. Thus far, $750k has been donated to 130 causes in the communities that they serve. An additional positive impact is introducing Flowers for Dreams customers to the beneficiaries, ultimately growing the following of their non-profit beneficiaries by 1.5x.

Jenny Farver, Co-CEO, 8th Light

8th Light is a consultancy which helps companies build software. Known for high quality work, the way they’ve built their workforce is by hiring primarily through an apprenticeship program. This hiring technique has produced a much more diverse workforce than is typical in the technology industry.

Jenny McColloch, Corporate Vice President of Sustainability, McDonald's Corporation

McDonald’s operates 40k restaurants across 140 countries, with a focus on feeding and fostering communities while maintaining both local and global perspectives. The sustainable sourcing team is most proud of their climate work, as McDonald’s is one of the first companies that set science-based targets to reduce greenhouse gas emissions. Their global scale has created a focus on the resiliency and strength of the global food supply chain.

Some key impact examples from our panelists included:

• A focus on carbon management for grazing cattle has yielded improvements in the efficiency of raising beef.

• Climate thinking is inherently long term, which has prepared the company to manage supply chain disruption.

• Lower cost per hire via apprenticeship programs.

• Diverse teams build better software because the users of software are diverse.

• Differentiating between a “buy to give” model that’s tacked on versus integrating the giving program into the core product offering.

Other questions addressed included:

• How do you deal with tensions between a social or environmental pressure and financial returns?

• How do you engage your employees in the process of evaluating the company’s performance towards their impact goals?

• How do you communicate your impact to customers?

• How do you address the tensions between types of social impact, such as paying your employees more or lowering your prices?

The session closed by addressing the question of “can you be an impact company if your product or service is not solving a societal problem?,” which included concrete suggestions from the panelists:

• Be authentic.

• Iterate work in progress. 

• Be intentional and prioritize; don’t spread yourself thin.

Lastly, two book recommendations surfaced during this session:

Small Giants by Bo Burlingham, which is about companies that choose to be great by staying small. 

Six New Rules of Business by Judy Samuelson, which includes ways to think about business holistically.

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Missed this session or want to revisit the full discussion? Visit here for a full recording.

A Recap: Session #1, Investing in People and Place to Close the Racial Wealth Gap in Chicago

By Ander Iruretagoyena

On Wednesday, February 10th, Priya Parrish kicked off Impact Engine’s 9th annual Chicago Impact Investing Showcase. In this session, we explored the various forms of racial wealth disparity in Chicago and how different types of investment capital and approaches are intentionally creating more equity. Specifically, the session focused on the People and Place P’s of our 5P Framework. Through opening remarks by Debra Schwartz (MacArthur Foundation) and a moderated conversation with Dr. Helene Gayle (The Chicago Community Trust) and local business leaders Jim Casselberry (4S Bay Partners), Julian Posada (LiftUp Enterprises), and Don Thompson (Cleveland Avenue), participants listened in on how businesses with underrepresented founders and operations that create opportunity for people historically underserved lead to powerful and lasting change for individuals and their communities. The speakers are real life examples of businesses that purposely base their operations/investments in areas with little upward mobility and who inspire each of us to act. Impact can be optimized by focusing on the root cause of so many of the problems (lack of access to high quality education, health disparities, violence, etc.) that plague this country. We cannot expect the country to move forward when we are holding close to ⅔ (the Latinx and Black communities) of it back. In spite of its virtual format, the session maintained the high energy spirit and rallying call to action that has come to be expected at Impact Engine’s showcase events.

Notwithstanding all of the increased attention, closing the racial wealth gap is not a new issue. Institutions like the MacArthur Foundation have been working to close the racial wealth gap and make financial systems more inclusive for over 35 years. Chicago has been a key battlefield in this war, with innovations like Community Development Financial Institutions (CDFIs), programs like Benefit Chicago ($100M in capital to support impact enterprises throughout the Chicago region looking to enhance job readiness, create jobs, or build wealth) and studies like Next Street’s (for Black and Latinx entrepreneurs in Chicago, 80% of their equity capital needs go unmet and that there is a gap of at least $146M between the supply and demand for equity capital for these communities). It's a case study for the power of combining traditional grants, donations, and public-private partnerships, with impact investing across all the P’s. 

During the session, we heard from Cleveland Avenue and their efforts to bridge the gap for underrepresented entrepreneurs in the food and beverage space by giving them the support to overcome perceptions attached to them. Key to these efforts is utilizing structures that are aligned with the interests of those founders. Creative structures like convertible debt or bridge loans help avoid unnecessary dilution. Equity should only be used when there is a reason for it and to create alignment for long term success; it should not be the de facto structure. 

LiftUp Enterprises explained how implementing best-in-class diversity and inclusion practices can be a source of competitive advantage. Furthermore, they shared some of their recent operational improvements like establishing weekly payroll and setting up a company sponsored emergency funding lender so workers do not have to go to payday lenders. These practices are not only solving liquidity issues for workers but become the foundation for paradigm-based impact by ensuring the creation of wealth at all worker levels (senior, middle, and entry). 

Lastly, we heard from 4S Bay Partners, which strives to eliminate prejudice and inequities by helping create useful, wholesome economic opportunities for marginalized communities and amplifying their stories through private capital investments. As a single family office, 4S has the flexibility to engage in multiple different funding strategies like opportunity zones or setting up vehicles like Chi-Town Impact to drive wealth creation, which in their view is not a zero sum game. 

The summer of 2020 was a rollercoaster for the city of Chicago, and not exactly the fun kind. Amidst a pandemic, election uncertainty, and racial equity marches, the city fluctuated from desolate streets to packed ones to desolate again in a matter of days. As a fellow Chicagoan, it was shocking to see empty streets due to numerous store and small business closings, packed streets filled with peaceful protesters, and again empty ones with the exception of National Guard patrols demanding to see identification. No amount of snow will make us forget the events that transpired this past summer in Chicago. Now more than ever, we know that systemic racism is unrelenting in our country. The events of the past months have crystallized how frustrated, saddened, and angry we all are. Despite some progress, we know that the stories of George Floyd, Ahmaud Arbery, Christian Cooper, and Breonna Taylor won’t be the last. With spring just a couple of days away, it is time to come out of hibernation, join Chicago’s vibrant impact community, and support efforts aimed at closing the racial wealth gap. Be loud, be bold, think outside the box, be impactful, listen to those who you are trying to impact, take the time to collect feedback, and above all: 

“Just open your eyes, your paradigms, your perspectives, and increase the possibility to folks that are black, brown and women in this field...don’t make us overprove ourselves.” 

— Don Thompson, CEO & Founder, Cleveland Avenue

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Missed this session or want to revisit the full discussion? Visit here for a full recording.

11 Tips for Driving Sales: Overheard at the Impact Engine Portfolio Summit

By Chris Wu

Impact Engine convened a group of industry-leading CEOs and sales experts at our 2019 Portfolio Summit and they offered up their pro tips on how to kick your sales into hyperdrive. Our portfolio companies were treated to a master class with some of the best in the business on a wide variety of sales-related topics. Below is a recap of the Portfolio Summit’s key takeaways.

Sales Hiring

During his career at LinkedIn, Mike Gamson (now the CEO of Relativity) had the rare opportunity to build a sales team from zero up to full maturation, which in the case of LinkedIn meant over 6,000 sales employees. Along the way, he learned a lot about how to develop an effective process for hiring salespeople while also creating the right company culture in an organization that began to experience rocket-like growth trajectory.

• Setting the right culture

One of the first things he did after he started running sales at LinkedIn was to put together a list of traits or values that he wanted the first sales team to embody. The list included things like: bring humility to work, no jerks, and be intellectually curious. It’s important to stay true to these core values. Mike referred to one instance where he had hired someone who was productive and brought in deals, but proved to be a poor fit for the team culture. The individual didn’t uphold the team values, and had already violated some of their guidelines. Mike had to make an important decision — was he prepared to hire and fire people for the sake of culture? Ultimately, he decided to put culture first and bet that the big stuff matters, even if it meant he had to take on short-term professional risk in order to fix things. While the company’s short-term production took a hit when that person was fired, the long-term gain in production from that story set the tone for the rest of the team that over time, far surpassed the initial trough in productivity.

• Diversity & Inclusion

When asked to reflect back on his biggest failure during this high-growth phase at LinkedIn, Mike pointed to the topic of diversity and inclusion. He felt that the organization could have recognized the lack of diversity sooner, which would have allowed them to address it earlier on. LinkedIn would go on to spend thousands of hours to make improvements and with the help of a group of senior women at the firm, they successfully devised and implemented a strategic change plan. Now LinkedIn has 50/50 women parity including senior positions. But looking back, Mike said it would have been far less work if he had the correct process in place from the beginning instead of having to fix it later on.

• Be honest with what you have

From a product perspective, Mike believes there are two types of companies: those with differentiated products and those with commoditized products. The type of product you have will dictate the type of salespeople you should be hiring. When you have a differentiated product, you should actively seek out salespeople who are intellectually curious. They need to believe in your product and have a passion for the benefit that accrues for their customers. With a commodity product, it’s a race to the bottom on price. A salesperson better suited to selling differentiated products will not only cost more, but they will also find selling commoditized products uninspiring.

• SaaS: Salesperson as a Scientist

Mike’s background prior to sales was as a product marketer, which may play a role in how he wants his salespeople to operate. He prefers that they take a scientific and thesis-driven approach to their interactions with the customer. Mike refers to this as Salesperson as a Scientist. He encourages them to constantly observe and record data on the customer’s experience with the product and use that information to develop a hypothesis about what changes they should make to the product rather than running to tell the product team every time a customer asks for a new feature.

• Where to hunt for talent

Mike constantly looks at other organizations to try and identify companies that: a) have established a work culture that he admires, b) provide training to new hires that are extremely applicable at his company, and c) produces inquisitive people who ask great questions. Once he identifies these organizations, he systematically farms new hires from them.

How CEO’s can help their Head of Sales

Sam Yagan has been CEO of a slew of extremely successful D2C tech companies including SparkNotes, OKCupid, and the Match Group. But he had no experience with enterprise sales when he became the CEO of ShopRunner. It was a struggle at first to find the right fit for their Head of Sales. He went through multiple people early on that didn’t work out and their headhunter was constantly trying to force him to settle for candidates that didn’t check off all the boxes or weren’t a fit. For example, one candidate had a great rolodex of key players in the industry but was better suited to selling a mature product, which wasn’t ShopRunner’s world. Eventually he was able to land Chris Ladd, who has spent over 20 years working his way up the ranks at various retail companies. He had managed up to $1.4B P&L’s and as many as 4,000 employees. Chris turned out to be a perfect complement to Sam’s strengths and together they have developed a great multi-pronged approach to closing big enterprise deals.

• Multi-threading through the organization is key

At ShopRunner, Chris and Sam are constantly chasing after large deals that have long sales cycles. Their game plan is to take a multi-pronged approach to developing and eventually closing new deals. They refer to this joint approach as multi-threading. Sam’s role is to share the vision, Chris brings the industry knowledge and retailer perspective, while the rep actually has to work out the details with their counterpart to get the deal done. By engaging the customer at multiple points along the org chart in a complementary fashion, they are able to build in redundancy to the sales process and get to a “yes” in a more efficient, effective manner. Multi-threading allows you to keep the deal alive and on track. It also allows the sales teams to leverage the CEO as a facilitator or unlock deals that are stuck. It isn’t necessarily about closing today — it’s about relationship building. It’s the entrepreneur’s responsibility to build trust with the most senior person you can find on the client side, which takes time. As a result, Chris will often coach his sales team to manage expectations around the sales cycle.

• Scarcity is your friend

If you’re selling ahead of a new product, scarcity can be an effective tactic. If I can’t have you, I want you more. Behavioral science backs this up. When you chase after a sale, people become defensive so you need to defuse that tendency. Holding back can oftentimes create demand. Offering only a limited number of slots for the launch can become an advantage and will help manage the timing of onboarding clients.

Sales Tactics

As the CEO of Jellyvision, Amanda Lannert has been at the helm of one of Chicago’s fastest growing tech companies. The company has added about 100 employees a year while remaining cash flow positive during a recent period of rapid expansion. During this growth period, Jellyvision won numerous awards for its outstanding culture. More than 1,500 companies and 18 million employees in total now use Jellyvision’s software, ALEX, to choose the best benefit plan for their needs.

User experience design is the linchpin to everything Jellyvision does. Their journey has led them to believe that there are three fundamental truths of selling: a) everything is marketing, b) show that you listen and care, and c) we are all human.

• Everything is Marketing

Every customer touch point is an opportunity to make an impression and build your brand. Amanda’s email auto-response to me as we were hammering out the details for her presentation at our Portfolio Summit is a wonderful example of making the most of any and every engagement to show off your brand. See the screenshot below:

• Show That You Listen and Care

Build a culture around capturing all the finer details about a client, which Amanda refers to as instances of humanity, and calling on that. Run towards fires and solve problems because they will feel cared for and as a result will become your biggest evangelist. Jellyvision will often perform what Amanda calls “wild acts of romance”. For example, the account management team sends out hand-woven friendship bracelets for customers to thank them for their trust after they send over sensitive employee information. They also deliver Open-Enrollment Survival Kits to clients acknowledging the busiest time of their client’s year.

• We Are All Human

Companies don’t buy from companies, people buy from people. Don’t get hamstrung on titles; you’re selling to risk takers or innovative buyers regardless of rank. Don’t be boring! Amanda cautions against underestimating how bored people are in their everyday lives. Jellyvision often uses humor to break down what can be a pretty stressful topic for their end use. But humor isn’t the only approach that works. The opposite of being boring is not to be funny — it’s to be interesting. Be interesting and you’ll be surprised out how that draws people out. How can you out-teach, out-joke…out-whatever your competition?

• Lessons Learned about Startup Sales

Jellyvision’s best account reps have been the ones that are highly coachable, intrinsically motivated, and detail-oriented. Before you begin ramping up AE’s, Amanda recommends that you prepare first by defining the ideal customer profile, the buyer personas, and the key problems that they are expected to solve. A sales messaging cheat sheet is another great tool to provide. This all requires a relentless focus on process, because persistence pays off. Their data suggests that 80% of deals require at least 5 touches in order to close.

Sales Pitch and Messaging

Craig Wortmann wears many hats, but the common thread that runs through all of them is sales. As the CEO and Founder of Sales Engine, Craig helps companies improve their sales results. Craig Wortmann is a Clinical Professor of Innovation & Entrepreneurship in the Kellogg Innovation and Entrepreneurship Initiative (KIEI) and founder and executive director of the Kellogg Sales Institute. Craig is also an Operating Partner at Pritzker Group Venture Capital, where he advises portfolio companies on sales. Craig gave some expert guidance on how to message effectively and also offered some ways you can step up your networking game.

Our team is very grateful to have a network of subject matter experts who are committed to supporting Impact Engine’s entrepreneurs and their growing companies. We want to thank Craig Wortmann, Mike Gamson, Sam Yagan, Chris Ladd, and Amanda Lannert for generously contributing their time to our Portfolio Summit, and enabling us to share learnings with the greater Impact Engine community.

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