David Brooks of the New York Times bestows his blessing on impact investing, ending with "Right now social capitalism is a more creative and dynamic place to spend a life."
Saker Nusseibeh asks, in The Guardian, "what is the purpose of investment?", then goes on to suggest "that in employing our resources we hope for some personal gain but also some wider societal benefit. The purpose of investment then must be to act as a pipe that links a nation’s savings (personal savings, pensions savings, insurance monies and so on) to its future economic growth and wellbeing."
Serial entrepreneur, angel investor, podcaster, and writer Jason Calacanis writes in his blog on the importance of regular and often investor updates from companies:
"If your startup isn’t sending you monthly updates it’s going out of business. I know this because with two of my investments I found out that they were out of business because I emailed them over and over asking for an update. When the update finally came it was, “can we talk?” When someone says “can we talk?” it’s over. Today I keep a spreadsheet. The columns are the months of the year and the rows are the startups I’ve invested in. We check off the date in the month that we got the last update. When we look at this spreadsheet — and we look weekly — we know instantly who is in trouble and who is rocking. If someone misses their second month I instantly call them on the phone — so I can help!"
Editor's note: apparently there is an Austin company outsourcing help with this called AngelSpan.
"Family Offices" are private investment companies that steward the financial resources of wealthy individuals and their families. According to Family Wealth Alliance, single and multi-family offices represent roughly $1.6 trillion in assets under advisement in North America. A 2013 Financial Times survey found that family offices allocated 17 percent of their assets under management to impact investments.
Yet according to a 2013 CFA institute study, 66 percent of financial advisors said that they were unaware of impact investing.
Here's the full article from Stanford Social Innovation Review.
FoodTechConnect confirms that AFI is in the midst of a bonafide trend: food investing! The list ranges from small angel groups to biggies like Investco.
News, Forums, How-To's, a Directory, and more, all focused on enabling local investors, at a new website called Local-Investing.com.
They write: "We believe that all investors, not just wealthy ones, should have opportunities to discover, evaluate, and make local investments. Businesses should be able to reach out to their fellow citizens for financing, and not be limited to costly conventional sources of money. Communities should promote local investing to better manage their growth and development. Local investing is all about people connecting and building relationships with each other, the way investing used to be."
Ryan Feit, of SeedInvest, explains in Inc. magazine why it can be better for a company's owners, at the time of their business' sale, for the business to be an LLC... despite what Venture Capitalists will normally advise. What he doesn't mention is that the LLC form can also be advantageous to early investors if the company is pre-profitability.
Also, here's a informative guide to choosing a corporate structure from a long-time securities attorney specializing in start-ups and crowd funding.
"WASHINGTON, Jan. 12, 2015 - USDA is making $18 million available to assist in the education and development of the next generation of farmers.The funds are provided through the 2014 farm bill under the Beginning Farmer and Rancher Development Program (BFRDP) and will be administered by USDA's National Institute for Food and Agriculture (NIFA)."
Joel Salatin is a niche celebrity to the Slow Money crowd by taking a commonsense approach to sustainable farming. In this Mother Earth News story, he continues a long-time thread about using low-cost, or no-cost, infrastructure and growing by internally generating cash flow.
He writes: "The eggmobile model was profitable as a tiny backyard prototype because the infrastructure cost next to nothing. The scheme could scale up with cash flow from the enterprise because the subsequently larger eggmobiles were also cheap and could be added as demand grew. We didn’t need to build the whole fleet in a day; we could add more of our movable coops as our skills and the market expanded.
Contrast this model with that of industrial agriculture. If I wanted to raise eggs for the commodity market, getting started would require roughly a million-dollar investment for a confinement facility. Even if we set aside for a moment the odors, effluent, animal-welfare issues or any other such considerations, the industrial model carries an enormous entry-level price tag, which prohibits most people from entering the business, and requires farmers to take on debt. That model does not scale down — you can’t start small."
The City of Austin's Small Business Development Program has a nifty website for discovering the many locally-owned small businesses in our area, including the ability to add your business.
Three of our favorite Austin food entrepreneurs won Good Food Awards January 8 at a ceremony in San Francisco hosted by foodie royalty Alice Waters, Ruth Reichl, Nell Newman, and Mark Bittman.
Jester King won for their Atrial Rubicite & Montmorency vs. Balaton; Pogue Mahone for their Texas Sweet Heat Pickles; and Confituras for their Wild Plum Jam. Congrats to all!
The Charities Aid Foundation recently released a report called "Philanthropy: A gift or investment" which shows 79% of wealthy under 40s have an element of their portfolio allocated to socially conscious investments, those with some degree of social impact, compared to 57% of the over 40s.
Silicon Hills Lawyer is an informational website run by attorney Jose Ancer of the firm Miller, Egan, Molter & Nelson in Austin. Mr Ancer writes: "The purpose of this blog, particularly the Learn the Essentials section, is to provide Texas-based founders a curated resource for educating themselves on core startup law & finance concepts, without wasting money or equity on lawyers or advisors."
His articles are excellent, and a great resource for both entrepreneurs and angel investors coming up to speed - and staying current - with start-up finance topics.
Here is a great overview of the local and regional food systems from the Sustainable Table website of the Grace Communications Foundation.
Cool network map of social entrepreneurs and support organizations in Austin courtesy of UnLtd USA. Hey! We need to get on here!
Sonen Capital is a impact investment management firm headquartered in San Francisco.
They have published research reports that require one to register for their website, but are worth that small effort, including "Evolution of an Impact Portfolio", "2013 Annual Impact Report",
UT Cockrell School of Engineering Entrepreneur-in-Residence Ben Dyer writes on his blog TechDrawl about all the reasons that traditional, GAAP accounting may not portray the actual condition of a company. He's referring to tech firms, where SaaS pricing plans and freemium strategies aren't necessarily indicative of the real momentum of the business, and differences between cash, accrual, and tax reporting may yield different conclusions to different observers.
What if the same types of arguments could be made about impact companies? What if traditional, GAAP accounting not only has difficulty with high flying apps but also with firms that consciously decide to pay decent wages and provide great benefits (both which hit the statements as "expenses", hurting profit and valuation...), or whose farming methods enhance the soil continually (at further expense) but the benefit of that (healthy foods later) won't be realized for years?
From NPR, story of young farmers, raised in the digital age, turning to farmers' markets, craft beer, and artisal cheese. And farming.
The Economist reports that traditional investors, like pension funds and sovereign wealth funds, are eyeing farmland as potentially fertile investments: "Farm gates have traditionally been closed to capital markets: nine in ten farms are held by families. But demography is forcing a shift: the average age of farmers in Europe, America and New Zealand is now in the late fifties. They often have no successor, because offspring do not want to farm or cannot afford to buy out family members. In addition, adopting new technologies and farming at ever-greater scale require the sort of capital few farmers have, even after years of bumper crop prices."
News from AFI; Links to stories on business-for-good, private-company investing, fundraising, & sustainable food.