{"id":9536,"date":"2015-07-06T07:30:35","date_gmt":"2015-07-06T14:30:35","guid":{"rendered":"http:\/\/ietransfer.wpengine.com\/?p=9536"},"modified":"2017-06-30T11:08:39","modified_gmt":"2017-06-30T18:08:39","slug":"who-are-the-impact-investing-venture-capitalists-betting-on","status":"publish","type":"post","link":"https:\/\/inspiredeconomist.com\/articles\/who-are-the-impact-investing-venture-capitalists-betting-on\/","title":{"rendered":"Who Are The Impact Investing Venture Capitalists Betting On?"},"content":{"rendered":"

\"Tesla<\/a><\/p>\n

DBL Partners, an investment fund based in the San Francisco and Palo Alto area, recently announced<\/a> the closure\u00a0of an impact investing fund worth $400 million.\u00a0This fund is the largest so far in the impact investing space and will focus on companies in the sustainable energy, products and services, digital media and imaging, healthcare and IT sectors. DBL has been able to spot successful, social companies in the past (most notably, by investing in Tesla Motors at the early stages), so it will be interesting to see where they spend this money in the future.<\/p>\n

DBL\u2019s Investment Strategy<\/strong><\/h3>\n

The DBL in DBL Partners<\/a> stands for their \u201cDouble Bottom Line\u201d\u00a0investment strategy that focuses on the financial return (\u201cFirst Bottom Line), as well as the social or environmental return (\u201cSecond Bottom Line\u201d). DBL prefers impact investing in early stage start-ups as it considers this to be the easiest phase to set the social tone of the company. While it looks for companies with a social or environmental impact, Nancy\u00a0Pfund and Cynthia Ringo, team members of DBL, stress that CSR practices should be central to the business model to have a positive effect on profit. This is consistent with theory<\/a>.\u00a0As reported by the NY Times<\/a>,<\/p>\n

\u201cIn fact, Ms. Pfund and Ms. Ringo view early-stage investing as an\u00a0opportunity to make socially responsible practices a keystone of corporate\u00a0culture. \u201cThis isn\u2019t like saying, \u2018Let\u2019s have a toy drive,\u2019\u00a0\u201d Ms. Ringo said. \u201cThe\u00a0second bottom line needs to be integral to how the company is doing\u00a0business.\u201d <\/em><\/p>\n

Previous Impact Investing<\/strong><\/h3>\n

The new fund will be managed<\/a>\u00a0by Ira Ehrenpreis and Nancy Pfund who is reported<\/a> to have a long-term perspective on company success.\u00a0Nancy\u2019s lack of emphasis on short-term returns and experience on the policy side may be the reason that \u201c[f]ive of the 18 companies in her first fund, which was started in 2004, have gone public.\u201d Previous success stories include Pandora, SolarCity and Tesla Motors.<\/p>\n

Pandora<\/strong><\/h4>\n

Pandora<\/a> is known for launching the \u201cMusic Genome Project\u201d.\u00a0This project ambitiously aims<\/a> to create a dataset of music based on 250 variables, or \u201cgenes\u201d.\u00a0An algorithm then uses this dataset to recommend music and create stations for listeners based on a root song that the listener inputs. Pandora differs from comparable companies in the industry by employing human beings, or \u201cmusicologists\u201d to listen to each song and record the variables. This runs contrary to the standard practice of using machines and computers to quantify the music. While Pandora founders believe that using human beings improves the quality of the dataset, it can have\u00a0its limitations, such as the size of Pandora\u2019s library relative to its peers.<\/p>\n

In terms of social impact investing, at the time of DBL\u2019s investment, Pandora was focused on developing Oakland<\/a> with new job opportunities\u00a0and music lessons<\/a> in inner city schools. Pandora went public<\/a> on June 14, 2011.<\/p>\n

SolarCity<\/strong><\/h4>\n

\u201cSolarCity<\/a> is the leading provider of solar energy systems that deliver reliable power to homes and businesses.\u201d\u00a0With its clear focus on clean energy development, SolarCity adhered to the DBL principles at the time of initial investment and has since gone public<\/a> on December 13, 2012.\u00a0The company has made headlines recently by expanding its solar reach to provide off-grid solutions in Hawaii<\/a>.\u00a0The offering will include Tesla Motors\u2019 new Powerwall battery that stores solar energy to be used at night.<\/p>\n

Tesla Motors<\/strong><\/h4>\n

Tesla Motors<\/a> \u201cdesigns and sells elec\u00adtric cars that break the com\u00adpro\u00admise between per\u00adfor\u00admance and effi\u00adciency, com\u00adbin\u00ading world-\u200b\u200bclass auto\u00admo\u00adtive design and Sil\u00adi\u00adcon Val\u00adley tech\u00adnol\u00adogy with an inno\u00adv\u00ada\u00adtive sales and sup\u00adport strat\u00adegy\u201d\u00a0While it is no longer a start-up and has been publicly traded since June 29, 2010, it still continues to fulfill the DBL principles \u2013 most notably with\u00a0its recent creation of the Powerwall, as mentioned above. After the release of the Powerwall, Cleantechnica provided a per-kWh lifetime price comparison against\u00a0comparable\u00a0battery options\u00a0and the\u00a0analysis\u00a0is available here<\/a>.<\/p>\n

Entrepreneur and Tesla founder, Elon Musk, acknowledges the value of CSR despite the difficulty observing direct impact<\/a>:<\/p>\n

It\u2019s difficult to quantify, but a focus on the second bottom line ultimately enhances the first bottom line, Mr. Musk said. \u201cWhen a company works on a product or service that is truly useful to society, that increases the probability of a good financial outcome,\u201d he said. At the very least, it helps with recruiting and retaining employees. \u201cSmart and talented people have a lot of options, and it means something if they can make money and have a positive impact on society,\u201d he added.<\/em><\/p>\n

Potential Future Leaders<\/strong><\/h3>\n

So far, the new fund has invested<\/a> in Planet Labs, The Real\/Real, The Muse and Mapbox, as well as another company that remains anonymous.\u00a0Who else will join the ranks? If you think it should be your company, try patrolling the streets of San Francisco in the hopes of bumping into fund manager, Nancy Pfund. This is precisely the way that an ex-Google employee along with his business partner secured funding<\/a> in their latest venture, Farmers Business Network.<\/p>\n

Picture Credit – Raneko from\u00a0https:\/\/www.flickr.com\/photos\/raneko\/14166535198\/<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

DBL Partners, an investment fund based in the San Francisco and Palo Alto area, recently announced the closure\u00a0of an impact investing fund worth $400 million.\u00a0This fund is the largest so far in the impact investing space and will focus on companies in the sustainable energy, products and services, digital media and imaging, healthcare and IT […]<\/p>\n","protected":false},"author":83,"featured_media":9537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[9,15,23,39,47],"tags":[5177,5174,5173,2249,5176,5175,5178,5179,4166,5180],"adace-sponsor":[],"spectra_custom_meta":{"_edit_lock":["1460422901:84"],"_edit_last":["84"],"_yoast_wpseo_focuskw":["impact investing"],"_yoast_wpseo_title":["Who Are The Impact Investing Venture Capitalists Betting On? - InspiredEconomist"],"_yoast_wpseo_metadesc":["DBL Partners recently closed their impact investing fund worth $400 million. 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