New platform seeks to boost seed-stage investing of social enterprises

Friday, 6 September 2013 23:13 GMT

A woman holding an umbrella is silhouetted against a board displaying exchange rates outside a brokerage in Tokyo February 14, 2011. REUTERS/Toru Hanai

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SAN FRANCISCO, Sept 6 (Thomson Reuters Foundation) - Seed stage investing is emerging as a growing need in the impact investment market and a growing opportunity to support social entrepreneurs building businesses to yield social, environmental and financial returns.

To address this need, Impact Assets, a non-profit financial services company working to help solve the world's toughest problems by catalysing investment capital for environmental, social and financial impact, on Friday launched the Seed Ventures Platform.

"Impact Assets is launching its Seed Ventures Platform to fill the market gap in seed stage risk capital for impact entrepreneurs," Fran Seegull, chief investment officer and managing director of Impact Assets told Thomson Reuters Foundation at SOCAP, an annual conference that aims to increase the flow of capital towards social good.

The platform allows clients invested in the Giving Fund, Impact Asset's donor advised fund (DAF), to recommend investments of as little as $2,500 to seed-stage impact enterprises looking for capital to start or grow their businesses.

Impact Assets identifies these ventures through partners Hub Ventures, a start-up accelerator and venture fund, and Village Capital, a global accelerator that uses the power of peer support to boost social entrepreneurship. 

Plans are afoot to add other partners, Seegull said.

Like any early stage investment, seed funding is a risky investment and the impact investing sector, itself an evolving market, is looking for ways to address funding shortfalls and to improve start-ups’ "investment readiness".

Impact Assets defines seed stage investing as putting up $1 million or less in early stage ventures that have never before raised institutional capital. 

DAFs INCREASINGLY POPULAR IN THE US

DAFs, such as Impact Assets Giving Fund, are becoming increasingly popular in the United States. They are charitable giving vehicles administered by a public charity and created for the purpose of managing charitable donations on behalf of an organisation, family or an individual.

DAFs provide a straightforward, low-cost way to make grants to ventures supporting the causes an investor cares most about, and all the earned growth is tax-free.

With investment options in areas such as sustainable agriculture, microcredit, affordable housing, alternative energy and healthcare in the developing world, the Giving Fund channels capital directly towards better outcomes for people and the environment all over the world, Impact Assets said.

 

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