MyVillage: Why We Invested

By Elizabeth Coston McCluskey and Sam Abbott

Working families face a number of obstacles when seeking child care, with one of the biggest barriers being supply of high-quality providers. According to the Center for American Progress, 42% of children under age 5 in the US live in child care “deserts” — places lacking adequate access to quality child care options. Due to limited availability, families can face waitlists longer than a year to place their child with a high-quality provider. Affordability is also a major factor, as the cost of child care has increased over 70% since 1985. These challenges have led to over 50% of American parents saying they are unsatisfied with their child’s current care.

Solution

MyVillage creates a community of quality home-based child care businesses benefitting both providers and families. The company is the only one of its kind with a solution proven to work across the country — even in rural, Western states. MyVillage makes it easier for providers to establish and operate high-quality child care businesses by offering access to a suite of resources: a platform to connect with local mentors who can help navigate taxes and regulations, a curated teaching curriculum, business software tools, marketing support, and professional development opportunities. Using MyVillage’s platform, families can search for child care options based on price, location, and program type. They can communicate with and pay providers on the platform, and feel assured that the providers are properly trained, insured, and subject to consistent quality standards.

Why We Invested

In addition to the compelling market opportunity, we are excited to be partnering with MyVillage because of the strength of their team, their early momentum, and their potential for impact.

MyVillage’s team has a proven commitment to making a positive social impact. Erica Mackey, co-founder and CEO, has a track record of scaling impactful solutions to challenging social problems. Before MyVillage, Erica co-founded and was the COO of Off Grid Electric — a renewable energy startup based in Tanzania. Elizabeth Szymanski, co-founder and CFO, was previously the CFO for TENA, an innovative Tanzanian recycling company.

MyVillage’s model has resonated with both existing and new in-home child care providers, and has enabled them to establish a foothold in Montana and Colorado. To date they have recruited 25 providers and have 90 children in care.

The model has the potential to reach underserved communities in both rural and urban settings, giving all children the opportunity to receive high-quality care. While access is a problem across the US, rural and Hispanic communities face a disproportionately high shortage of supply, and affordability is often a challenge for high quality care.

Impact

MyVillage seeks to increase the number of children under five receiving quality child care, to improve the accessibility and affordability of quality child care, and to provide economic empowerment for in-home child care providers. Quality early childhood education is crucial for brain development and prepares children for kindergarten. Roughly half of all low-income 5-year-olds in the US are not ready for kindergarten, putting them at a disadvantage from the very start of their formal education. MyVillage will equip more children to succeed as they enter school.

The company also empowers in-home child care providers to earn up to double their current wage, which averages $11.50 per hour, while monetizing their homes through a meaningful career that supports work-life balance. Through MyVillage, providers can also take advantage of professional development opportunities.

PadSplit: Why We Invested

By Elizabeth Coston McCluskey and Sarah McGraw

As more and more people migrate towards urban areas in search of education and economic opportunities, cities and suburbs across America are experiencing a housing crisis. Complicating matters, new housing production has not kept up with demand. Taken together, this imbalance has led to a rapid rise in home prices that has displaced lower income families and workers.

By affordable housing standards, households are considered cost-burdened when they spend more than 30% of their gross income on housing expenses, regardless of income level. Today, 48% of American workers earn less than $30,000 per year. This would leave almost half of American workers with just $750 per month for housing — an impossibility in many U.S. cities. With limited options, too many Americans are faced with an impossible choice — overspend on housing, thus threatening financial security, or move away from city centers, increasing transportation costs and time strains.

Solution

PadSplit is helping address this market inefficiency by expanding the existing housing supply, without requiring government subsidies. PadSplit is a digital housing marketplace that allows private landlords to convert single-family homes into affordable, co-living residences. These residences are fully furnished, renovated up to specific standards, and include private bedrooms alongside a shared kitchen and common space.

Individuals seeking housing are matched with options closest to their place of employment and become members of PadSplit. Once a resident moves in, their membership is paid week-to-week through the platform to match paycheck cycles, and includes all utilities, on-site laundry, parking and internet access. Average costs for PadSplit residences hover around $550 per month and no long-term commitment is required. PadSplit is also launching a savings platform for members.

Why We Invested

PadSplit offers a secure and affordable solution for a large, yet underserved, segment of working-class adults who face severe cost burdens when seeking suitable housing. The market is complex, however the team — led by Founder and CEO Atticus LeBlanc — has deep experience across real estate and affordable housing, as well as a thoughtful approach to navigating the legal and regulatory environment. They believe in building partnerships with all stakeholders — including members, property owners, city governments and NGOs — to ensure compliance with local standards and Fair Housing requirements. This has earned them support from Enterprise Community Partners and Urban Land Institute, among others, as well as generated excitement about the model’s potential across the sector.

Impact

By providing affordable housing solutions, PadSplit aims to radically improve the financial lives of working-class Americans while enabling them to live within reasonable commuting distance of their place of employment. To date, the company has secured and placed over 200 individuals, helping them save an average of $460/month between housing and transportation costs. Consider the case of Tiffany Ellis, who moved to Atlanta in the summer of 2017 looking to start over after a series of personal setbacks. After securing a job as an overnight security guard, as well as a PadSplit unit, Tiffany was able to save enough each month to purchase a car and move into her own apartment within 6 months.

By expanding the market, matching individuals with appropriate homes, and facilitating weekly payments to match income flows, PadSplit is enabling more affordable, convenient living for a critical segment of working adults.

Press Highlight

“This cohousing startup wants to help the working class”

Candidly: Why We Invested

By Elizabeth Coston McCluskey and Tasha Seitz

Editor’s note: In 2022, FutureFuel rebranded to Candidly.

Challenge

Student debt has reached a crisis level. Recent estimates show there are 44 million borrowers in the US owing a total of $1.6 trillion in student loan debt, with those figures continuing to grow. The average student in the class of 2016 has $37,172 in student loan debt from 4 to 6 different loans. Beyond those staggering numbers, the student loan industry can be opaque and difficult to navigate, especially for inexperienced borrowers. Meanwhile, employers’ benefits packages skew towards savings and retirement instead of the more pressing issue for many of their employees — debt management and reduction.

Solution

To tackle these problems, FutureFuel.io has developed a platform and suite of services enabling employees to reduce the effective cost of their student debt. The multi-faceted platform includes:

• Roll Up — enabling borrowers to view all their loans and payment schedules in one place. By consolidating loan information in the same place, borrowers can better manage their existing student loans

• Repay — giving employers a platform to contribute directly to the repayment of their employees’ student loan debt

• Refinancing — offering a marketplace where borrowers can find the best deals to refinance their existing loans

• Round Up — providing a tool to accelerate the repayment of student debt by rounding up spare change from transactions to put toward paying down debt

• Read — educating borrowers on how to best manage their student debt

Why We Invested

Student debt poses a major challenge for an entire generation, and we believe FutureFuel.io has high potential to make an impact for several reasons. First, the team — led by Founder and CEO Laurel Taylor — has proven their ability to hustle and learn from the market, adjusting their strategy accordingly. They have strengthened their team by adding a deeply experienced financial services executive to their board. Second, FutureFuel has gained early traction with employer customers and partners including Colonial Life, First Data, and Student Choice. In initial pilots, 60% of employees have refinanced via the platform. Third, the breadth of FutureFuel’s product offerings enables them to upsell within employers and provides an array of tools to combat student debt.

Impact

FutureFuel’s platform gives employees the opportunity to dramatically reduce the overall cost of their student debt. Through refinancing alone, it is estimated that FutureFuel users can save $19,000 and reduce their interest by 1.7%. Employer contributions through Repay and accelerated repayments through Round Up also give employees the chance to more quickly eliminate their debt, while additional resources like Roll Up makes organizing and managing loans easier. Finally, FutureFuel gives employers a platform to align their benefits packages to better meet the needs of their employees.

Press Highlight

This ex-Googler thinks she’s found the trick to end Millennial job hopping | Business Insider

CancerIQ: Why We Invested

By Elizabeth Coston McCluskey and Tasha Seitz

10% of people have a genetic predisposition to breast, ovarian or colon cancer, and the field of genetic testing to identify those populations is moving very quickly. Understanding an individual’s risk factors through genetic testing can inform a personalized cancer screening and care plan that will increase the odds of early detection and enhance survival rates, yet many individuals whose family histories suggest they are candidates are not being tested. This issue disproportionately affects African American women, who have three times the genetic risk of early onset, aggressive breast and ovarian cancers. Even when individuals do get tested for hereditary cancer risk, they often aren’t receiving care plans that reflect current national recommendations as the field is evolving and there are not enough professional genetic counselors to meet demand.

Solution

CancerIQ’s workflow process automation system — developed for cancer centers, breast centers and OB/GYN practices — collects family history information and automatically identifies patients who qualify for genetic testing, then streamlines the genetic test ordering process and records test results alongside recommendations for care plans based on the test results (whether positive or negative), and helps providers track and manage patient adherence to care plans to ultimately reduce risk over time. By streamlining the upfront process for genetic testing and leveraging technology to connect with current national recommendations, CancerIQ ensures that more individuals have the appropriate, personalized care plans in place to detect cancer early and treat it more successfully — or prevent it from occurring in the first place.

Why We Invested

Each year, over 450,000 Americans are diagnosed with breast, ovarian or colorectal cancer, and CancerIQ’s platform enables patients to take advantage of genetic screening and has the potential to drive early detection and improve survival rates. The company was founded by a strong mother-daughter team with both business and medical credentials. Dr. Funmi Olopade, a founder and board member, is a professor of medicine and human genetics and director of the University of Chicago’s Cancer Risk Clinic and has led important research in the field regarding hereditary cancer risk for specific patient populations. She has been part of a collaboration to create training in genetic counseling to generate more capacity to conduct, interpret and apply genetic risk screening to develop personalized patient care plans. Feyi Olopade Ayodele leads the company as founder and CEO and has a background in private equity and investment banking. Prior to launching CancerIQ, she served as project manager at the University of Chicago’s Center for Clinical Cancer Genetics where she developed a data platform to drive medical research in oncology. Ayodele and her mother — who took a sabbatical from the University of Chicago — joined with analytics specialist Haibo Lu to start CancerIQ.

The company has strong customer traction (30+ multi-year contracts, and renewal revenues and internal expansion across multiple health systems) and a distribution partnership with Myriad, the largest genetic testing provider. This partnership has the potential to accelerate adoption of CancerIQ in the market, and the company is already generating new customer opportunities from that relationship. They are also in late-stage discussions with a second large genetic testing partner and other specialty HIT vendors that will provide them additional reach into the market.

Finally, the field of genetic testing and understanding of hereditary risk factors is advancing quickly, and we believe that CancerIQ’s technology can successfully address the limited supply of professional genetic counselors by automating the process around testing and recommendations.

Traction

CancerIQ has several dozen paying customers, who have have screened over 150,000 patients and ordered more than 6,000 genetic tests. The Myriad relationship has potential to accelerate customer adoption. The value the company has created for Myriad has made it compelling for other genetic testing labs to partner with CancerIQ, and a number of additional potential partnerships are now in their pipeline.

Impact

Earlier diagnosis of patients with high hereditary cancer risk will lead to better health outcomes, and the company conducted a two-year study with OSF HealthCare’s Center for Breast Health to demonstrate their ability to enable early detection. Dr. Olopade’s research suggests that CancerIQ can have a disproportionately higher impact on African and African American populations, given their higher risk for early onset, aggressive cancers. In addition to financial metrics, we expect to track the number of patients screened by ethnicity, geography and customer type, the number of patients implementing personalized care plans based on CancerIQ recommendations, and the number of patients diagnosed early.

Impact Investing in Public Equities: Recap

By Elise O’Malley

The relationship between impact investors and public equity markets began long before the recent boom of traction and media coverage we see today. For decades, institutions and individuals have used public equity strategies to support their personal values or influence corporate behavior. Priya Parrish, Impact Engine’s Managing Partner of Private Equity, spoke to her experience as an institutional investor while moderating our “Impact Investing in Public Equities” panel, hosted by Legal & General Investment Management of America (LGIMA). Joining her was John Hoeppner of LGIMA and Steve Mesirow of Mesirow Financial, both of whom are veterans within the sustainable investment space. The panelists discussed their paths to sustainable investing, strategies, challenges, and expectations for the future.

Historical Evolution of Sustainable Investing in Public Equities

Priya began the conversation with an initial introduction to the divestment movement of the 1980s: “Much like a consumer boycott, investors can choose to divest from a company or actively engage with a board about specific business policies, with the theory that the company may change their practices. That’s exactly what happened when asset owners stopped investing in companies operating in South Africa, ultimately driving business out of the country and contributing to the end of the Apartheid.” In the latter half of the same decade, mutual funds began incorporating negative screens into their portfolios, with investors intentionally avoiding products like tobacco, gambling, and firearms manufacturers. Instead of a focus on shifting corporate behavior, asset owners sought to align portfolios and values.

Investors then began asking, “What is the materiality of these social and environmental factors?” The emphasis transitioned from alignment-focused investing to ESG factor integration, which is a more nuanced analysis of the different drivers of profits and revenues. And with this nuanced approach, mainstream asset managers began responding to client demand and creating products that considered these factors.

“As public markets strategies focused more heavily on factor integration, the causal relationship weakened,” Priya said. This is when she personally began gravitating towards impact investing, which entails investing in companies that are deliberately contributing to social issues as part of their business model. Priya noted that impact investing represents $224 billion of AUM today, saying “it’s smaller than the ESG AUM but it seems to have influenced a revival around the initial pillar of seeking to affect corporate behavior with public markets strategies.”

Public Markets Impact Investing Strategies

John Hoeppner, now the Head of US Stewardship and Sustainable Investments at LGIMA, was able to shed light on a few impact strategies he has encountered throughout his tenure:

• Market theory is a style in which asset managers withhold investment, with the expectation they can influence price and consequently send a signal to the public company that they do not endorse their practices.

• Transparency theory involves investors requiring companies to report on their gender pay gaps, environmental impacts, etc. with the expectation that the market will change prices as a result of transparency.

• Rare theory assumes change occurs when an asset manager owns a significant piece of a company and uses that ownership to influence its practices so that they align with the manager’s values. This approach is the most proactive and aggressive, and normally requires that the asset manager owns a large portion of the company.

Steve Mesirow is a third-generation wealth advisor at Mesirow Financial, where his team manages money for high net worth families. Steve recently incorporated impact investing into the 81-year-old firm and uses deeply ingrained business values as a screen: be good to employees, treat the clients’ money as well as your own, and give back to the community. Steve noted that companies who treat their employees well ultimately develop a superior workforce. Additionally, companies who give back to their community and environment are more likely to recover after making a mistake, as they have better relationships with the public and government. “Superior corporate culture is a competitive advantage that’s unseen by the market. These advantages are very real but just overlooked,” Steve said.

Challenges

A major challenge that the panelists, as well as some guests, shared was the pressure for mass customization. Clients sometimes want to select impact objectives so specifically that they become limited in their options. For example, a client may want to only invest in companies that address the challenges of water scarcity or they want to avoid carbon entirely. As a result, they have eliminated so many companies and industries that they have reduced their potential for generating strong returns. Panelists noted that taking an approach of seeking to optimize financial and social returns across a broad portfolio may achieve stronger results.

Panelists also mentioned that a lack of advisors who are knowledgeable about impact investing can present a challenge as well, as many investment advisors will routinely advise clients to just invest regularly and donate to their desired charities.” Additionally, a bias still exists within the investment community that impact funds give up performance.

What We Can Expect

The ESG industry has grown significantly over the last 15 years. Today, 9 out of the 10 largest asset managers have an ESG offering. “Where does it go from here?” Priya asked of the panelists and audience. Both John and Steve emphasized the emergence of effective technology tools. With the introduction of new data software, asset owners will be able to have a much more precise understanding of their impact investments. Asset managers will claim their impact, but the data will be able to confirm their legitimacy. Steve noted, “The data from even the past 3 years is so much better than it was 4 or 5 years ago. It’s easier to make changes. Solutions are coming.”

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