Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Nathan Parcells
As the universe often has it, one day after writing my post last week on the lack of social entrepreneurship investors, I got to meet a major investor, who is an exception to the rule, and who supports socially responsible companies in a BIG way. (For those who didn’t read my post last week here’s the two sentence summary. 1.) Social entrepreneurship is gaining traction in intellectual circles across the country due to support from players like the Kauffman Foundation, but not from funders, mentors, and critical support channels. 2.) This should change because social entrepreneurship companies offer scalable returns on both money and a social good and therefore better maximize returns for people who like to both invest in tech companies and give to charity. You can read the whole article here).
Kapor Capital and a different investing thesis:
The day after writing last week’s post, I got to attend an event at Kapor Capital, hosted by investor/philanthropist Mitch Kapor, whose investing thesis focuses on funding companies with a social bent. He invests both personally as an angel, and through his foundation as a way to raise additional money and awareness for the foundation. All of the for-profit companies who receive funding are evaluated on their ability to make returns. All the companies who eventually receive funding also go through a filtering process that looks at the social responsibility of the founders and the ethos of the company.
Prior to the event I knew Mitch had a proclivity to invest in education and socially responsible companies, but at the event, after talking to 20 or so portfolio companies it was clear this was a different group of individuals. Ranging from Jessica Jackley, co-founder of Kiva, to Lane Becker of GetSatisfaction, the founders here were some of the best I have ever met, but notably all were in the game for changing the world with more than just money. The energy in the room was unique and everyone clicked.
Even a few degrees social:
In describing the group, Mitch said that he invests not only in socially responsible companies, but also in teams with a great idea that is NOT focused on a cause but that has founders who are skewed just a few degrees towards being socially responsible. In this way Mitch has a very open ecosystem that filters greedy jerks, and gives increased opportunity to founders and companies looking to do good (but not at a sacrifice to returns).
An exception to the rule:
To see an investor at this level, and this dedicated to supporting a community of socially responsible entrepreneurs was incredible. However, Mitch still represents an exception to the rule. There are still hundreds of investors, doing things the old fashioned way: separating money making and supporting the causes and values they care about.
Some new ideas:
While this past week proved to me that VC’s, angels, and foundations can adopt an investing thesis that creates both big returns and social good, connecting the dots for most entrepreneurs is still too hard. Right now we have a number of billionaires pledging their money to charity. This is an incredible thing but is getting rich and giving back really the win win? This still focuses on the idea that the two goals won’t be mutually reinforcing. A different idea is to support a culture of entrepreneurs who are willing to tackle the additional challenge of building high exit companies that go one step beyond google’s do no evil and actually do a little bit of good. A well branded Gates Foundation incubator would be one of a million ways to start.
