Social  Impact  Ventures  &  Raising  Capital:  B  Corps  and  the  Social  Venture  Connexion  ! By: Joyce Sou!

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Agenda  

  Impact  Inves<ng  and  MaRS  CII  

  Social  Ventures  –  B  Corpora<ons  

  Funds  –  Raising  capital  through  the  SVX  

  Ques<ons  

Background:  Impact  Inves5ng  What  is  impact  inves.ng?  

 An  impact  investment  is  an  investment  in  a  project,  business,  or  financial  vehicle  with  the  explicit  inten<on  to  create  a  posi<ve  impact  and  generate  a  financial  return.        

********      Impact  investors  seek  to  move  beyond  “doing  no  harm,”  and  towards  inten<onally  deploying  capital  in  businesses  and    projects  that  can  provide  solu<ons  to  societal  problems.    

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$5.3B  

$100B  

$400B  -­‐  $1T  $30B  

WORLD  WORLD   CAN  CAN  

2012   2022  

Key  Sectors:  Clean  technology,  sustainable  agriculture,  affordable  housing,  and  barrier-­‐breaking  enterprises.    

Background:  Impact  Inves5ng  

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Background:  MCII  

Community Finance Solutions

Social Impact Bond Incubator

Venture and Capital Programs

Education and Knowledge

Creation

Policy and Development

Research reports, educating and engaging prospective

talent, ventures, and investors, disseminating

knowledge.

Catalyzing funds, connect investors and ventures and

developing capital initiatives.

Advancing recommendations of the Task Force, including

legislative reforms & tax regs, and outcomes-based financing.

Greed  is  good.  

Only  charity  and  government  can  do  good.  

“[T]here is one and only one social responsibility of business - to use it’s resources and engage in activities designed to increase its profits...”

Maximize Shareholder Value

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73% of consumers care about the company, not just the product when making a purchasing decision. <1% of consumers trust

company advertisements or statements on packaging

80% of Millenials expect to work for a company that has a positive social impact

Certified B Corporations are a new type of corporation which uses the power of business to solve social and environmental problems.

What is a B Corporation?!

video

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What is a B Corporation?

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Environment

Workers Governance

Community

Redefining Success

Workers: The lowest paid hourly worker receives 46% above the living wage Community: Contributed >5,000 hours of community service 45% of COGS goes towards investing and supporting small scale suppliers Donated >5% of profits to charity Environment: Offset >50% of emissions with certified carbon offsets

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>990B Corporations 60 Industries 30 Countries >110 Canadian B Corps

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Access to Capital – GIIRS/B Analytics

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Invest for impact.

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Maximize Shareholder Value

We won’t have a new economy without a new type of corporation.

More than just a standard…

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20th Century: Shareholder Capitalism

21st Century: Stakeholder Capitalism

Maximize shareholder value almost exclusively

Create social and shareholder value simultaneously

We hold these truths to be self evident: That we must be the change we seek in the world. That all business ought to be conducted as if people and place mattered. That through their products, practices, and profits, businesses should aspire to do no harm and benefit all.

To do so, requires that we act with the understanding that we are each dependent upon another and thus responsible for each other and future generations.

SVX  is  a  new  impact  inves<ng  plaPorm  connec<ng  impact  ventures,  funds,  investors,  and  service  providers  to  catalyze  debt  and  equity  investments  that  generate  social  and/or  environmental  impact  alongside  the  poten<al  for  financial  return.  

MaRS  VX,  the  parent  company  for  SVX,  is  an  nonprofit  organiza<on,  incorporated  in  Canada.  

  Access  to  capital  and  investors  

  Raising  capital  is  costly  

 

Problem  A  growing  group  of  social  entrepreneurs  and  impact  investors,  but...  

There  is  an  uncoordinated  impact  inves5ng  marketplace.  

  Finding  quality  deals  and  co-­‐investors  

  Due  diligence  is  costly  and  5me  consuming  

Ventures   Investors  

Impact Investing +!A  single  access  point  for  impact  ventures  and  investors  Solu5on  

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Features & Benefits How does SVX work?

Ventures  What  is  the  target  profile  of  SVX  issuers?  

Inclusion  

 Co-­‐ops  

Clean  Technology  

Nonprofits    &  Chari5es  

Community  Infrastructure    

Health  and  Wellness  

For-­‐profit  businesses  

Sustainable  Food  

Educa5on  &  Social  Tech  

Loans    I    Bonds    I    Co-­‐op  and  Common  Shares    I    Limited  Partnerships  

Target Issuers

Impact ventures and funds (<$25M revenues) including nonprofits (including charities), co-operatives (nonprofits and for-profits), and for-profit businesses looking for $25K - $10M.

Who are the target ventures and funds?

Target Issuers

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Who are the target ventures and funds?

Two  Cohorts  of  Issuers  

Investors  What  is  the  target  profile  of  SVX  investors?  

Founda5ons  

Family  Offices  

Financial  Ins5tu5ons  

Angel  Investors  

Venture  Capitalists   HNWIs  

Alterna5ve  Financial  Ins5tu5ons  

Impact  Funds  

Accredited  Investors  

Pla[orm  

  Public  frontend  to  aZract  poten<al  customers  alongside  private,  secure,  password  protected  plaPorm  

  Custom  built  by  The  Working  Group  on  Ruby  on  Rails  with  following  func<ons:    Online  applica5on  and  progress  tracking  with  tool  

<ps  to  answer  customer  ques<ons    Keyword  and  Category  Search  Directory    Private  Deal  Rooms  with  document  sharing  and  

interac<on    Clean  profile  views  with  feature  plugins  including  

YouTube  and  Slideshare    Full  user  management  (Delete/Approve/Create  

users)  and  content  management    Venture  tools  and  templates  (e.g.  term  sheets,  

pro-­‐forma  projec<ons)  

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How  does  the  online  plaAorm  work?  

Access  Requirements  What  is  the  process  for  accessing  the  SVX?  

Governance  &  Management    

•  Ontario  incorporated  •  Strong  governance  structure  •  Evidence  of  relevant  exper<se  within  

management  and/or  directors  •  Disclosure  of  any  current  or  past  legal  ac<ons  

against  management  and/or  directors  

Impact    

•  Ontario-­‐focused  impact  •  Five  (5)  Key  Performance  Indicators  (IRIS-­‐

based  if  possible)  •  GIIRS,  3rd  party  ra<ng  (or  B  Corp),  for  social  

purpose  businesses  •  Impact  narra<ve  

Financials    

•  Revenue-­‐genera<ng  ($50k  -­‐  $25M  annually)  •  No<ce  to  Reader  financial  statements  •  Pro-­‐forma  projec<ons  •  Adequate  current  assets,  fixed  assets,  or  cash  

reserves  •  Ownership  informa<on,  including  past  and  

current  sources  of  capital    

Other    

•  Complete  business  plan  •  External,  professional  references  •  Auditor/reviewer  &  legal  counsel  contact  

informa<on  •  Debt  &/or  equity  capital  need  ($25k-­‐10M  for  

ventures,  $2-­‐50M+  for  funds)  •  IP  &  R&D  informa<on  (if  necessary  should  

venture  not  meet  revenue  requirements)  

Four Stages: Registration, Application, Review and Matching

How  does  SVX  work?  

Process