The future is looking very bright for Australian entrepreneurs that are doing good for society or the environment with a recently announced $100 million impact investment fund, a very welcome and much needed development for the tight Australian venture capital space.
Impact investing came to life not far back, in 2007 to be exact when the phrase was coined at a convening at The Rockefeller Foundation and has since grown explosively – it is expected to grow to $500 billion in assets by 2019, from $50 billion in 2009.
The Impact Investment Fund, one of the biggest of its kind in Australia where the concept is just picking up speed, is the brainchild of Sydney-based social investor Geoff Gourley (pictured above), entrepreneur Julio De Laffitte and Southbank Capital, a Melbourne-based investment advisory firm.
The funds raised will be invested based on the impact investment principals of promoting positive social and environmental values while also delivering excellent financial returns.
A consortium of five prominent business people is already seeking to finalise the fund’s initial capital raise of AU$100 million, targeting an official launch around mid-July 2015.
Besides Geoff who is also a Board Director of United Nations Association of Australia (VIC) and Julio who also founded the entrepreneur group, Unstoppables, the other backers are company chairman, Francis Galbally, who also heads up Southbank Capital as well as Tim Langdon and Karl O’Shaughnessy, both widely experienced in the financial markets.
What is the motivation behind this fund?
About how they got together to work on this, Geoff told Anthill, “It was really a meeting of minds, expertise and passion, we deeply care about leaving a legacy and felt the best way we can achieve that is through investing in businesses, start-ups and ventures that will also make a difference.”
“By investing in a socially just and positive environmental future we can create a secure financial future while influencing a better world,” he explained.
Julio explained why more has to be done immediately to ensure Australia does not fall permanently behind the rest of the world pointing out that there are some genuinely talented tech entrepreneurs here who should be funded from within the country, but instead investors from Silicon Valley and Singapore are the ones coming to the rescue of our local start-ups and reaping the benefits.
“I believe Australia’s investment eco-system needs to be more favourable to tech start-ups,” he stated. There needs to be greater government support and entrepreneurs need to formulate their proposals so they are more attractive to investors.”
The opportunity to invest in the Impact Investment Fund is restricted to wholesale clients such as pension funds, super funds, asset managers, sovereign wealth funds, family offices, corporations and high net worth individuals.
It operates as a “Fund of Funds” (FOF) and will invest in a broad mix of single manager hedge funds and sustainable and ethical enterprises. The FOF market exposures will include the traditional assets classes mixed with the alternative and sustainable sectors.
How can you get capital from this fund?
Julio said the Impact Investment Fund is looking for young Aussie entrepreneurs like Dave Jackson whose app called Car Crowd uses car-pooling to reduce carbon emissions.
Dave is a founding member of Unstoppables and is already being courted by many Australian investors as well as receiving top flight guidance from within Australia.
“People like Dave now need to go to the next level, and we want that to take place in Australia. Not only can these innovations create Australian jobs, revenues will benefit the Australian economy.”
Geoff, who has a personal portfolio of more than a dozen companies, built his first start-up at the age of 19 and has over the last 22 years operated in the design, property, environmental, energy and tech industries, developing, commercialising and managing numerous businesses.
He said they are finalising a number of targets and are inviting expressions of interest from social enterprise and start-ups, they can complete a short EOI form on the website to be considered.
On what advice he has for entrepreneurs out there that would like to access funding from Impact Investment Fund in the future, he told Anthill that besides being able to demonstrate how they deliver positive social or environmental outcomes, they should also know their business back to front, know their numbers in detail and can clearly articulate strength in the following three key areas.
- Who is the founder? Do they have a solid and reputable management and advisory team behind them, as well as the drive, passion and expertise to go the distance?
- Does the business already have traction? Who are its partners and clients? What revenue and profit is it raking in? Remember we are seeking double digit performance for the fund investors.
- Is there a large local or global market for their products or services and solutions? Do they have a USP? How are they different/better than the competition? Do they demonstrate a conservative approach to forecasting their projections?
“We also have a strong leaning and are passionate about supporting women entrepreneurs, there are strong stats that demonstrate ventures run or founded by women deliver better returns.”