Less Than Zero
Beyond addressing significant social and environmental challenges, Gripne advocated against bifurcating resources into “donations” and “investments,” which have the potential for a positive rate of return.
“We invite you to let go of the words ‘investor,’ ‘grant’ and ‘donation’ and start more holistically looking at your resources in terms of financial return, impact, risk and liquidity,” she told conference attendees.
For example, rather than giving a donation, an investor could make a low-interest loan to an impact venture at 1 percent interest. That’s 101 percent better for the investor than the negative 100 percent return on a gift. It could also save the venture a substantial amount of money compared to the cost of a market-rate loan. And even a small positive return for the impact investor, compared to the total loss associated with a gift, could generate more impact in the long run by growing the amount of capital the investor can redeploy into additional impact deals.
Gripne isn’t against grants or donations--indeed CO Impact Days and Initiative relies on grants and donations. She just wants investors to consider restructuring existing loans, lines of credit and mortgages to provide savings for ventures, while increasing financial returns to investors.
Back To The Future
At the pre-conference workshops, investors heard presentations on a variety of topics, such as investing through endowment portfolios, choosing the best legal structure for startups and evaluating term sheets.
During the first day of the conference, attendees participated in one of two sessions on evaluating direct impact investments. Investors received detailed due diligence reports on Silvernest, a for-profit roommate matching service for baby boomers and empty nesters that have, or need, a home to share, and the Emily Griffith Foundation, a nonprofit that’s developing a mixed-use, mixed-income housing project in downtown Denver. The principals pitched their ventures, then left the room while investors discussed the pros and cons of each investment.
The next day, investors could visit booths to speak privately with 60 Colorado impact entrepreneurs chosen from a field of over 280 projects, for-profits, nonprofits and funds that applied to participate. Signup sheets at each booth allowed investors to get introduced directly to the ventures’ principals or to other interested investors with whom they could share due diligence.
Colorado resident Kimbal Musk (brother of Tesla Motors and SpaceX CEO Elon Musk) delivered the keynote presentation on his work building “Learning Gardens” in schools to help students improve their vegetable intake. Kimbal Musk is the co-founder of The Kitchen Community, a group of restaurants that sources directly from local farmers.