CategoryInvesting

A quick explainer on Impact Investing

What is impact investing?  It’s a question that gets asked a lot, even in the crowd that calls itself impact investors.  I explained the general idea on-stage at The Nature-Accelerator in just three and a half minutes:

Somebody’s Gotta Get Rich [SSIR]

Kevin Starr of the Mulago Foundation wrote a nice explanation of the need for and sweet spot of impact investing, Somebody’s Gotta Get Rich. Impact at problem-solving levels of scale doesn’t come from one-off businesses. “Levels of scale” as in making a noticeable difference in the world, rather than simply telling a good story imagining a world different from how it is today. Kevin...

The future you want, rather than the future that might otherwise be

One of the challenges of being an “impact investor” is explaining to others what you mean by “impact” as the definition varies from person to person.  The best explanation I’ve ever heard came from Ted Levinson of Beneficial Returns on a panel at a recent SOCAP 365 event in San Francisco (which I heard on the “Unusual Investments” episode of the new Money...

Don’t go chasing unicorns [Guest post]

Venture capital should never have become the standard way for us to fund new businesses. As an asset class, it’s uniquely designed to fund disruptive innovations. It does this by funding ventures that are likely to fail, but — if successful — can result in outsized outcomes. In other words, it’s a ‘home run’ based model. For a venture capitalist, seeing 6 or 7 out of 10 portfolio companies fail...

The 99 Investor Problem’s Solution

Thanks to the Angel Capital Association the so-called “99 investor problem” is sufficiently solved for small seed funds.  Specifically, S.2155 was passed by Congress and signed into law, which amongst a series of changes to financial regulations included: (Sec. 504) The bill amends the Investment Company Act of 1940 to exempt from the definition of an “investment company,”...

A new, impact Cathedral and Bazaar

It was 21 years ago that Eric Raymond wrote an essay about a cathedral and a bazaar, explaining to the world why the messy, open, chaotic format of a bazaar would be the better way to develop software vs. the centrally designed and organized form of cathedral building.  He was more right than wrong, as even the centralized cathedrals of Google and Amazon are based on and contributors to the Open...

Breaking the paradigm of startup investment

I’ve been writing and talking for years about how “California Capitalism” is the wrong answer for 99.9% of all startups.  I expect I’ll be talking about this for at least another decade, maybe two, before the investment world comes around to see what they are doing wrong. I don’t blame investors.  They are simply stuck in a paradigm, and if you go back and learn what...

Startups are the journey, not the exit

Two weeks ago I was in Boston, speaking at the Angel Capital Association, surrounded by many hundreds of fellow startup investors.  As is usually the case in such gatherings, the most common word in the room was “exit” as that is the obsession of the modern startup investor. My talk included that word as well, but only in contrast, as it’s title was “Investing without...

Organizing investors in groups, e.g. The Seattle Impact Investing Group

Investing is hard.  It’s yet-another topic that isn’t taught in school, and rarely taught by family either.  Here in the 21st Century, where a lot of wealth in America is self-made, the newly minted wealthy need help learning how to invest. For startup investing, the biggest challenges for investors are finding investable companies (a.k.a. dealflow) and doing enough due diligence on...

Growing the tent for impact investing

With all the buzz about impact investing (see BlackRock’s letter), it’s no surprise that Social Capital Markets’ new SOCAP 365 impact investing conference in Seattle was sold out. Investors, venture capitalists, family foundations and more joined to network, learn and make commitments in furthering the growth of the impact investing field. The day was filled with the realities of the impact...

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