Northwest Social Venture Fund: Impact Capital: New Frontiers for Investors, March 2015

Impact Capital: New Frontiers for Investors

Northwest Social Venture FundOur mission is to alleviate global suffering through scalable social

entrepreneurship & impact investing

-We are a Series A Venture Capital Fund, part of the White House Grand

Challenges initiative, like Gates Foundation, to tackle ambitious & achievable

goals to address & resolve global problems

-Our work has been featured by Forbes, GeekWire, Wall Street Journal,

Sustainable Business Oregon, KATU, Portland Business Journal. We grew out

of a thinktank for social impact, the Social Venture Society.

-In 2012 we participated in the White House Business Council for American

Economic Competitiveness, and in 2013 the SBA and TechStars' Global

Accelerator Network recognized us as one of the top 16 accelerators in the US.

Key Industry Trends

Each month we evaluate 40-80 companies, and connect with

colleagues and partner organizations. Here are some main

trends we are seeing:

-Nonprofits with scalable tech are converting to for-profit model and raising private capital

-Forprofits with strong impact are rebranding as impact companies and raising impact capital

-LPs, philanthropists & angels have a strong desire to do impact deals, but there is a lot of fear & "wait & see" to overcome

Leap of Faith vs Jump off Ledge

• Every time you do a business deal, you have to take a leap of faith:

• What is the likelihood of success? Is it substantially more than the likelihood of failure?

• How do the #'s stack up? Is there bad data, no data, or good trending data?

• Do I trust the key players? Are there any serious red flags? Have I taken the time to do enough due diligence?

• Can I afford to lose if things go south, and am I ready and excited to win, if things go well?

• Risk begets reward - no risk, no reward. You have to have a personal vision for the reward outcomes, financially + impact, to take next steps as an impact capitalist.

Industry Data

• Stanford Social Innovation Review: Case Foundation Research• 2014 Year of Impact Predictions: Capital will 2-3x by 2017• State of CA, OR, MA Treasurers, Calverts Foundation, Capricorn,

Meyer Memorial Trust, Seattle Impact Investing Group, Mercy Corps• YCombinator, TenX, PIE accepts nonprofit teams• Accelerators & Competitions focused on Impact: Fledge, Social

Venture Partner's Fast Pitch - Seattle, Los Angelos, Portland• HIP, GIIRS, B Labs, Nonprofit Finance Fund providing metrics

frameworks to measure, track, report on impact • B Labs: New Seasons grocery bag has B Corp label, law firm Immix

is a B Corp, benefit corp legislation in Oregon started 2014 with 29+ new benefit companies in Portland

• Hub Network: Seattle, San Francisco, Los Angeles, Boulder

eNABLE: 3D Printed Prosthetics

eNABLE: Business Case

-640 Volunteer Engineers + 50 new/week

-Can provide better functionality and drop price

point from $20K-$40K to $50 COGs + donated

labor + give product away

-Capturing innovation wave of commercially available 3D printing marketspace

Nonprofit model: have to raise $1.75MM from donors in order to distribute 1,000 and employ 6 people

Forprofit model: Can distribute 10,000 and employ 10 people by generating $1MM in revenues

SVFund Capacity Model Metrics for Pre-$1MM Teams

Dependency Model: MVP through Series B

Self Sustaining Model: MVP through Series B

InStove: NP - FP Conversion

International Princess Project

Growth Indicators

Landscape of Impact Funds

Ecotrust - Natural resource, asset-based impact fundRogue Ventures - VC, Oregon basedRevenue Capital Management - rev-based financing, not impact-orientedReference Capital - NW-based, environmentalOregon Angel Fund - smaller amounts ($250K-$750K), not impact targeted. Portland Seed Fund - seed capital ($18K-$25K), not impact targetedEquilibrium Capital - OR based, asset-based impact fund focused on clean tech/sustainabilityWomen's Venture Fund - OR/CA based, focus on funding women-led startupsUniversity Impact Fund - in another market (SLC)Unitus Impact - Base of pyramid livelihood development overseas (India, Indonesia)Grameen Ventures - Overseas, BOP focus (SEA/DC based)Moksa Ventures - not social, game based; in another market (Denver/Boulder/SLC)Mercy Corps Seed Fund - in another market (overseas - Egypt)Mercy Corps Social Venture Fund - grant-based R&D funding for internal ventures

Gaps in Impact Landscape: (Our To Do List)

• Impact CEOs able to raise private capital• Private investors ready to do impact deals• Foundations ready to invest in imp funds• Technologists with Impact + Capital Skills• Fund Managers ready to run imp VC and seed

funds to syndicate deals• University, govt, & NGO partners to help scale

impact products & services

Impact Capital + You

How can you individually and as a network,

take that leap of faith to leverage capital for impact?

carolynn@nwsvf.org

@SVSociety

www.nwsvf.org