One minute in Jamaica you can’t get backing for your startup; and now, The Leap Company are promoting a US$30m fund that doesn’t just invest in potentially profitable ventures, but those who can have a positive social impact.
Jamaica is now ready for social impact investment, reckons Leap’s Saffrey Brown. Having spent more than 10 years running the JN Foundation and championing social enterprises, while her business partner Suzanne Shaw chalked up energy and environmental projects for the likes of the European Union (EU), World Bank and Inter-American Development Bank (IADB); they are confident that now is the right time.
Confident that: A. there are enough good ideas to invest in; B. the local venture capital climate can actually support them; and of course C., that they have the combined skills to make a difference.
Businesses in four areas can apply
All told they’re looking for businesses in four strategic areas, chosen for greatest potential social impact: renewable energy & energy efficiency; agriculture; circular economy; and sustainable infrastructure. Separate funds could be established for other areas such as health or education.
While the Leap Company, run by Suzanne in partnership with JN Fund Managers, will be providing the funding, its non-profit arm Leap Forward run by Saffrey will provide incubation and acceleration services, so even if you don’t feel your social impact business idea is 100% ready, they still want to hear from you. Apply!
“If you think you’re creating some kind of impact but you have no idea how to measure it then you can still contact us, because that’s our area – to help you come up with your metrics. Though there is a difference between impact businesses and CSR. Social impact businesses are those whose purpose in life is to balance profit and impact – Leap is here to invest in and support that particular way of creating value in society.” explains Saffrey.
An ever evolving area, impact investment provides shared value for investors and society alike. @EIB @the_IDB @Caribank @DBJ_VCC @villagecapital @suzanne_m_shaw @SaffreyB @jngroup #impactinvesting #socent #theleapco pic.twitter.com/q3SebaSmAp
— #TheLeapCo (@TheLeapCo) June 20, 2018
Spreading across the Caribbean
For now the partners are in a whirlwind stage of nailing down investors; finding the businesses to invest in (they already have one in each area); and visiting other Caribbean islands to expand their reach. Trinidad and Barbados would likely be first, but then also Dominica, where the brutal experience of the last hurricane season means that redevelopment and investment is more sensitive to social impact.
“We want to foster similar mindsets across the Caribbean and have a multiplier effect,” says Suzanne. “If we can show that this can be done in small economies with small businesses it will be really meaningful in showing that you can make a difference at all levels. Typically investment of this nature tends to go to a lot larger companies because the economies of scale are there. So it’s a little trickier operating in the Caribbean but we know that we can make it successfully happen and I think this will be a good example for others to follow our lead.”
It all sounds like a big – sorry for the cheesy pun – leap to believe that the business world can make this shift but then they make a similar point about crowdfunding. It would have scarcely believable before but an appetite for it has sustained countless projects worldwide, even if our local market might not been large enough to replicate (Saffrey launched isupportjamaica.com while at JN Foundation).
Crowdfunding showed the way
“Crowdfunding is micro-investments by huge volumes of people so that has really shown that there is a huge propensity for people to want to do good with their money. What followed from that is the shift from these small individual investors to institutional investors who recognize that their money can also be used to create the kind of impact you want. We’d be talking to companies that invest with different fund managers and we tell them about the fund and they’d say this is great I can put a certain percentage of our portfolio with you guys and therefore we can report on your metrics – the social impact achieved with that investment,” says Saffrey.
Investors might soon therefore choose to invest in the likes of Deaf Can Coffee, written about on this blog before, as part of the Social Enterprise Boost Initiative (SEBI), which Saffrey started at JN Foundation. Deaf Can of course sells you a great cup of coffee while providing skills training and employment for deaf youths you might not otherwise find work elsewhere.
Me, I’d invest in and drink their product.
Why go social impact?
By nature social impact businesses place a higher value on sustainability, which while this entails more work, creates additional value:
Lower risk of interference by regulators or litigation over negative social impact.