investing with purpose practice & experience
DESCRIPTION
Investing with Purpose Practice & Experience. Richard Biggs, D 3 Jubilee April 16 th , 2013. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. Many definitions For Profit / Non-profit. - PowerPoint PPT PresentationTRANSCRIPT
Investing with PurposePractice & Experience
Richard Biggs, D3JubileeApril 16th, 2013
What is a Social Enterprise?
What is a Social Enterprise?
What is a Social Enterprise?
What is a Social Enterprise?
What is a Social Enterprise? Many definitions
For Profit / Non-profit
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global Impact Intrinsic/Extrinsic
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global Impact Intrinsic/Extrinsic
In Common:
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global Impact Intrinsic/Extrinsic
In Common: Seek improvement for the Most Vulnerable
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global Impact Intrinsic/Extrinsic
In Common: Seek improvement for the Most Vulnerable Innovative
What is a Social Enterprise? Many definitions
For Profit / Non-profit Local / Global Impact Intrinsic/Extrinsic
In Common: Seek improvement for the Most Vulnerable Innovative Market-based Solutions
Why is Vulnerability important?
Why is Vulnerability important? Exposure to external shocks
Why is Vulnerability important? Exposure to external shocks
Financial crisis/misfortune Education fees Critical illness Death
Why is Vulnerability important? Exposure to external shocks
Financial crisis/misfortune Education fees Critical illness Death
Environmental crisis Natural Disaster Famine etc
Why is Vulnerability important? Exposure to external shocks
Financial crisis/misfortune Education fees Critical illness Death
Environmental crisis Natural Disaster Famine etc
The BibleIsaiah 58:6-7
Is not this the kind of fasting I have chosen: to loose the chains of injustice and untie the cords of the yoke, to set the oppressed free and break every yoke?
Is it not to share your food with the hungry and to provide the poor wanderer with shelter - when you see the naked, to clothe them, and not to turn away from your own flesh and blood?
Why is Innovation important?
Why is Innovation important? Philanthropy vs Corporations
Corporations Philanthropy
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisation
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want Need
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want NeedAbility to pay Yes No
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want NeedAbility to pay Yes NoBusiness Model For-profit Non-profit
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want NeedAbility to pay Yes NoBusiness Model For-profit Non-profitFunding Capital Markets Foundations, Govt
Why is Innovation important? Philanthropy vs Corporations
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want NeedAbility to pay Yes NoBusiness Model For-profit Non-profitFunding Capital Markets Foundations, GovtGrowth Strategy Demonstrate
revenue & profit generation
Demonstrate need
Why is Innovation important? Philanthropy vs Corporations
Social Entrepreneurs need to find Market-based solutions to situations where Customers may be Unable to Pay, and secure funding from Non-Traditional sources
Corporations PhilanthropyObjective Profit maximisation Impact
maximisationConsumers Want NeedAbility to pay Yes NoBusiness Model For-profit Non-profitFunding Capital Markets Foundations, GovtGrowth Strategy Demonstrate
revenue & profit generation
Demonstrate need
What is a Social Enterprise? A For-profit company that creates social
impact which is intrinsic to the business model
Miracle Company
Profit-focused SE
Soci
al Im
pact
Profit
Impact-focused SE
Financing Social Enterprises
Financing Social Enterprises For companies to grow, they need Capital
IMPACT INVESTING
Financing Social Enterprises For companies to grow, they need Capital
IMPACT INVESTINGImpact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor.
(Monitor Institute)
Financing Social Enterprises For companies to grow, they need Capital
IMPACT INVESTINGImpact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor.
(Monitor Institute)
Impact
Principles of InvestmentWarren Buffett’s rule#1: Don’t lose money.#2: Don’t forget rule #1.
Financing Social Enterprises For companies to grow, they need Capital
CAPITAL FLOWS
Financing Social Enterprises For companies to grow, they need Capital
CAPITAL FLOWS
Investors
Financing Social Enterprises For companies to grow, they need Capital
CAPITAL FLOWS
Investors
Entrepreneurs
Financing Social Enterprises For companies to grow, they need Capital
CAPITAL FLOWS
Investors
Entrepreneurs
CAPITAL
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Commitment to Profit
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Commitment to Profit
Financial Viability
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Commitment to Profit
Financial Viability
Governance
Financing Social Enterprises Many Barriers to Capital Flow
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Commitment to Profit
Financial Viability
Governance
Commitment to Impact
etc
Financing Social Enterprises Need to Remove Barriers
Investors
Entrepreneurs
CAPITAL
Scale Sophistication
Commitment to Profit
Financial Viability
Governance
Commitment to Impact
etc
Financing Social Enterprises For Impact Investing to become a sustainable
channel for funding social enterprises…
Financing Social Enterprises For Impact Investing to become a sustainable
channel for funding social enterprises…
Barriers to Capital Flows must be removed
Financing Social Enterprises For Impact Investing to become a sustainable
channel for funding social enterprises…
Barriers to Capital Flows must be removed
HOW?
Financing Social Enterprises1. Investing is about TRUST
Financing Social Enterprises1. Investing is about TRUST2. Trust involves RISK
Financing Social Enterprises1. Investing is about TRUST2. Trust involves RISK3. Risk is about UNCERTAINTY
Financing Social Enterprises1. Investing is about TRUST2. Trust involves RISK3. Risk is about UNCERTAINTY4. Uncertainty can be overcome with
INFORMATION
Financing Social Enterprises1. Investing is about TRUST2. Trust involves RISK3. Risk is about UNCERTAINTY4. Uncertainty can be overcome with
INFORMATION
Investment Barriers can be removed through
PROVISION OF INFORMATION
Mainstream Financial Markets
Mainstream Financial Markets Same problems:
Trust, Risk, Uncertainty, Information
Mainstream Financial Markets Same problems:
Trust, Risk, Uncertainty, Information
Evolved a comprehensive Ecosystem to provide information and mitigate uncertainty
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding Sources
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Public
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Public
Angel Investors
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Public
Angel Investors
VC Funds
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Public
Angel Investors
VC Funds
Private Equity
Mainstream Financial Markets Capital Markets Ecosystem
1. Differentiated Funding SourcesRi
sk (
Unc
erta
inty
)
Size
Startup
Venture
Established
Public
Angel Investors
VC Funds
Private Equity
Mutual Funds, Institutional
Mainstream Financial Markets Capital Markets Ecosystem
2. Accounting / Auditing
Mainstream Financial Markets Capital Markets Ecosystem
2. Accounting / Auditing Audit of company accounts & financial statements Generally Accepted Accounting Principles (GAAP) CPA certification Big 4 accounting firms
Mainstream Financial Markets Capital Markets Ecosystem
3. Ratings Agencies
Mainstream Financial Markets Capital Markets Ecosystem
3. Ratings Agencies Research all aspects of an organisation’s finances Assign a rating to the ability to repay debt Moody’s, S&P, Fitch etc
Mainstream Financial Markets Capital Markets Ecosystem
4. Regulatory Bodies
Mainstream Financial Markets Capital Markets Ecosystem
4. Regulatory Bodies Determines the regulatory framework for investment Organisations are held accountable - enforcement
Mainstream Financial Markets Capital Markets Ecosystem
5. Fiscal Incentives
Mainstream Financial Markets Capital Markets Ecosystem
5. Fiscal Incentives Tax breaks for some Tax surcharges for others Subsidies Taxes/Subsidies approximate to +ve/-ve externalities
Mainstream Financial Markets Capital Markets Ecosystem
6. Financial Intermediaries
Mainstream Financial Markets Capital Markets Ecosystem
6. Financial Intermediaries Connect Investors and Entrepreneurs 2 major forms: Buy-side (fund), Sell-side (advisor) Facilitate capital flows through aggregation
Database Pooling Specialisation Best Practice
Initiates capital flows through deal creation
Mainstream Financial Markets Capital Markets Ecosystem
Investors
Accounting
Ratings
Regulation
Government
Intermediaries
Impact Investment Ecosystem
Impact Investment Ecosystem The Impact Investment Ecosystem
Needs all the players in the Mainstream ecosystem
Impact Investment Ecosystem The Impact Investment Ecosystem
Needs all the players in the Mainstream ecosystem
PLUS: Impact Assessment Mentoring/Consultancy
Impact Investment EcosystemInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment Ecosystem Some Players
1. Investors
Impact Investment Ecosystem Some Players
1. Investors
2. Ratings/Assessment
Impact Investment Ecosystem Some Players
1. Investors
2. Ratings/Assessment
3. Accounting/Taxonomy
Impact Investment Ecosystem Some Players
1. Investors
2. Ratings/Assessment
3. Accounting/Taxonomy
4. Government/Regulation
Impact Investment Ecosystem Some Players
1. Investors
2. Ratings/Assessment
3. Accounting/Taxonomy
4. Government/Regulation
5. Intermediaries/Accelerators
BREAK
Impact Investment in Korea
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in KoreaInvestors
Accounting
Ratings
Regulation
Government
Intermediaries
Mentoring/Consulting
Impact Assessment
SocialEnterprise
s
Accelerators
Impact Investment in Korea A Long way to go
Impact Investment in Korea A Long way to go
But we have also come a long way
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
Government
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
GovernmentFoundations
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
GovernmentFoundationsCorporates
Impact Investment in Korea A Long way to go
But we have also come a long way
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
GovernmentFoundationsCorporates
HNW Individuals
Impact Investment in Korea A Long way to go
But we have also come a long way NEED to get the Capital Flowing!!
Entrepreneurs
700+ govt certified SE+ hundreds more
Investors
GovernmentFoundationsCorporates
HNW Individuals
CAPITAL
D3JubileePractice & Experience
D3JubileeMISSION: To foster the growth of Social Entrepreneurship in Korea and beyond
D3Jubilee
Two-pronged approach
MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond
D3Jubilee
Two-pronged approach1. Build up Entrepreneurs
MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond
D3Jubilee
Two-pronged approach1. Build up Entrepreneurs2. Build up Investors
MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond
D3Jubilee Building up Entrepreneurs
D3Jubilee Building up Entrepreneurs
Corporate Advisory Services Essentially comes down to raising capital
D3Jubilee Building up Entrepreneurs
Corporate Advisory Services Essentially comes down to raising capital
Research Reports Necessary for potential investors
D3Jubilee Building up Entrepreneurs
Corporate Advisory Services Essentially comes down to raising capital
Research Reports Necessary for potential investors
D3Jubilee Building up Entrepreneurs
Corporate Advisory Services Essentially comes down to raising capital
Research Reports Necessary for potential investors
Financial Consulting Speak the language of Investment
D3Jubilee Building up Entrepreneurs
Corporate Advisory Services Essentially comes down to raising capital
Research Reports Necessary for potential investors
Financial Consulting Speak the language of Investment
Business Mentoring Many SE come from NPO backgrounds Some are very young
D3Jubilee Building up Investors
D3Jubilee Building up Investors
Creating an Angel Investor Community for Impact
D3Jubilee Building up Investors
Creating an Angel Investor Community for Impact DIIN Roundtable
D3Jubilee Building up Investors
Creating an Angel Investor Community for Impact DIIN Roundtable
The D3 Impact Investor NetworkHeld every 3 months
10 Entrepreneurs PresentedOver 150 guests
14 Impact Investors created5 SEs invested
USD 2.5 million raised
D3Jubilee D3Jubilee Impact Companies
D3Jubilee D3Jubilee Impact Companies
D3Jubilee D3Jubilee Impact Companies
D3Jubilee D3Jubilee Impact Companies
D3 Cleantech Fund (US)
D3Jubilee DIIN Investor Profile
Mostly High Net Worth Individuals Experienced Investors Keen to see Impact
D3Jubilee Long-term Objectives
To support the creation of a sustainable ecosystem for impact investment
To raise “Superstar” social enterprises To build a stable base of committed impact
investors Investing Locally and Overseas
Thank You!