1. Investing with Purpose Practice & Experience Richard Biggs, D 3 Jubilee April 16 th, 2013

2. What is a Social Enterprise?

6.  Many definitions  For Profit / Non-profit

7. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global

8. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global  Impact Intrinsic/Extrinsic

9. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global  Impact Intrinsic/Extrinsic  In Common:

10. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global  Impact Intrinsic/Extrinsic  In Common:  Seek improvement for the Most Vulnerable

11. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global  Impact Intrinsic/Extrinsic  In Common:  Seek improvement for the Most Vulnerable  Innovative

12. What is a Social Enterprise?  Many definitions  For Profit / Non-profit  Local / Global  Impact Intrinsic/Extrinsic  In Common:  Seek improvement for the Most Vulnerable  Innovative  Market-based Solutions

13. Why is Vulnerability important?

14.  Exposure to external shocks

15. Why is Vulnerability important?  Exposure to external shocks  Financial crisis/misfortune  Education fees  Critical illness  Death

16. Why is Vulnerability important?  Exposure to external shocks  Financial crisis/misfortune  Education fees  Critical illness  Death  Environmental crisis  Natural Disaster  Famine  etc

17. Why is Vulnerability important?  Exposure to external shocks  Financial crisis/misfortune  Education fees  Critical illness  Death  Environmental crisis  Natural Disaster  Famine  etc The Bible Isaiah 58:6-7 Is not this the kind of fasting I have chosen: to loose the chains of injustice and untie the cords of the yoke, to set the oppressed free and break every yoke? Is it not to share your food with the hungry and to provide the poor wanderer with shelter - when you see the naked, to clothe them, and not to turn away from your own flesh and blood?

18. Why is Innovation important?

19.  Philanthropy vs Corporations CorporationsPhilanthropy

20. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation

21. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed

22. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed Ability to payYesNo

23. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed Ability to payYesNo Business ModelFor-profitNon-profit

24. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed Ability to payYesNo Business ModelFor-profitNon-profit FundingCapital MarketsFoundations, Govt

25. Why is Innovation important?  Philanthropy vs Corporations CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed Ability to payYesNo Business ModelFor-profitNon-profit FundingCapital MarketsFoundations, Govt Growth StrategyDemonstrate revenue & profit generation Demonstrate need

26. Why is Innovation important?  Philanthropy vs Corporations  Social Entrepreneurs need to find Market-based solutions to situations where Customers may be Unable to Pay, and secure funding from Non-Traditional sources CorporationsPhilanthropy ObjectiveProfit maximisationImpact maximisation ConsumersWantNeed Ability to payYesNo Business ModelFor-profitNon-profit FundingCapital MarketsFoundations, Govt Growth StrategyDemonstrate revenue & profit generation Demonstrate need

27. What is a Social Enterprise?  A For-profit company that creates social impact which is intrinsic to the business model Miracle Company Profit- focused SE Social Impact Profit Impact- focused SE

28. Financing Social Enterprises

29.  For companies to grow, they need Capital  IMPACT INVESTING

30. Financing Social Enterprises  For companies to grow, they need Capital  IMPACT INVESTING Impact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor. (Monitor Institute)

31. Financing Social Enterprises  For companies to grow, they need Capital  IMPACT INVESTING Impact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor. (Monitor Institute) Impact Principles of Investment Warren Buffett’s rule #1: Don’t lose money. #2: Don’t forget rule #1.

32. Financing Social Enterprises  For companies to grow, they need Capital  CAPITAL FLOWS

33. Financing Social Enterprises  For companies to grow, they need Capital  CAPITAL FLOWS Investors

34. Financing Social Enterprises  For companies to grow, they need Capital  CAPITAL FLOWS Investors Entrepreneurs

35. Financing Social Enterprises  For companies to grow, they need Capital  CAPITAL FLOWS Investors Entrepreneurs CAPITAL

36. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL

37. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale

38. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale Sophistication

39. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale Sophistication Commitment to Profit

40. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale Sophistication Commitment to Profit Financial Viability

41. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale Sophistication Commitment to Profit Financial Viability Governance

42. Financing Social Enterprises  Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL Scale Sophistication Commitment to Profit Financial Viability Governance Commitment to Impact etc

43. Financing Social Enterprises  Need to Remove Barriers Investors Entrepreneurs CAPITAL Scale Sophistication Commitment to Profit Financial Viability Governance Commitment to Impact etc

44. Financing Social Enterprises  For Impact Investing to become a sustainable channel for funding social enterprises…

45. Financing Social Enterprises  For Impact Investing to become a sustainable channel for funding social enterprises… Barriers to Capital Flows must be removed

46. Financing Social Enterprises  For Impact Investing to become a sustainable channel for funding social enterprises… Barriers to Capital Flows must be removed HOW?

47. Financing Social Enterprises 1. Investing is about TRUST

48. Financing Social Enterprises 1. Investing is about TRUST 2. Trust involves RISK

49. Financing Social Enterprises 1. Investing is about TRUST 2. Trust involves RISK 3. Risk is about UNCERTAINTY

50. Financing Social Enterprises 1. Investing is about TRUST 2. Trust involves RISK 3. Risk is about UNCERTAINTY 4. Uncertainty can be overcome with INFORMATION

51. Financing Social Enterprises 1. Investing is about TRUST 2. Trust involves RISK 3. Risk is about UNCERTAINTY 4. Uncertainty can be overcome with INFORMATION Investment Barriers can be removed through PROVISION OF INFORMATION

52. Mainstream Financial Markets

53.  Same problems:  Trust, Risk, Uncertainty, Information

54. Mainstream Financial Markets  Same problems:  Trust, Risk, Uncertainty, Information  Evolved a comprehensive Ecosystem to provide information and mitigate uncertainty

55. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources

56. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup

57. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture

58. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established

59. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established Public

60. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established Public Angel Investors

61. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established Public Angel Investors VC Funds

62. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established Public Angel Investors VC Funds Private Equity

63. Mainstream Financial Markets  Capital Markets Ecosystem 1.Differentiated Funding Sources Risk (Uncertainty) Size Startup Venture Established Public Angel Investors VC Funds Private Equity Mutual Funds, Institutional

64. Mainstream Financial Markets  Capital Markets Ecosystem 2.Accounting / Auditing

65. Mainstream Financial Markets  Capital Markets Ecosystem 2.Accounting / Auditing  Audit of company accounts & financial statements  Generally Accepted Accounting Principles (GAAP)  CPA certification  Big 4 accounting firms

66. Mainstream Financial Markets  Capital Markets Ecosystem 3.Ratings Agencies

67. Mainstream Financial Markets  Capital Markets Ecosystem 3.Ratings Agencies  Research all aspects of an organisation’s finances  Assign a rating to the ability to repay debt  Moody’s, S&P, Fitch etc

68. Mainstream Financial Markets  Capital Markets Ecosystem 4.Regulatory Bodies

69. Mainstream Financial Markets  Capital Markets Ecosystem 4.Regulatory Bodies  Determines the regulatory framework for investment  Organisations are held accountable - enforcement

70. Mainstream Financial Markets  Capital Markets Ecosystem 5.Fiscal Incentives

71. Mainstream Financial Markets  Capital Markets Ecosystem 5.Fiscal Incentives  Tax breaks for some  Tax surcharges for others  Subsidies  Taxes/Subsidies approximate to +ve/-ve externalities

72. Mainstream Financial Markets  Capital Markets Ecosystem 6.Financial Intermediaries

73. Mainstream Financial Markets  Capital Markets Ecosystem 6.Financial Intermediaries  Connect Investors and Entrepreneurs  2 major forms: Buy-side (fund), Sell-side (advisor)  Facilitate capital flows through aggregation  Database Pooling  Specialisation  Best Practice  Initiates capital flows through deal creation

74. Mainstream Financial Markets  Capital Markets Ecosystem InvestorsAccountingRatingsRegulationGovernmentIntermediaries

75. Impact Investment Ecosystem

76.  The Impact Investment Ecosystem  Needs all the players in the Mainstream ecosystem

77. Impact Investment Ecosystem  The Impact Investment Ecosystem  Needs all the players in the Mainstream ecosystem  PLUS:  Impact Assessment  Mentoring/Consultancy

78. Impact Investment Ecosystem InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

79. Impact Investment Ecosystem  Some Players 1.Investors

80. Impact Investment Ecosystem  Some Players 1.Investors 2.Ratings/Assessment

81. Impact Investment Ecosystem  Some Players 1.Investors 2.Ratings/Assessment 3.Accounting/Taxonomy

82. Impact Investment Ecosystem  Some Players 1.Investors 2.Ratings/Assessment 3.Accounting/Taxonomy 4.Government/Regulation

83. Impact Investment Ecosystem  Some Players 1.Investors 2.Ratings/Assessment 3.Accounting/Taxonomy 4.Government/Regulation 5.Intermediaries/Accelerators

84. BREAK

85. Impact Investment in Korea

86. InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

87. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

88. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

89. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

90. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

91. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

92. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

93. Impact Investment in Korea InvestorsAccountingRatingsRegulationGovernmentIntermediaries Mentoring/ Consulting Impact Assessment Social Enterprises Accelerators

94. Impact Investment in Korea  A Long way to go

95. Impact Investment in Korea  A Long way to go  But we have also come a long way

96. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs

97. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE

98. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more

99. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more Investors

100. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more Investors Government

101. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more Investors Government Foundations

102. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more Investors Government Foundations Corporates

103. Impact Investment in Korea  A Long way to go  But we have also come a long way Entrepreneurs 700+ govt certified SE + hundreds more Investors Government Foundations Corporates HNW Individuals

104. Impact Investment in Korea  A Long way to go  But we have also come a long way  NEED to get the Capital Flowing!! Entrepreneurs 700+ govt certified SE + hundreds more Investors Government Foundations Corporates HNW Individuals CAPITAL

105. D3Jubilee Practice & Experience

106. D3Jubilee MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond

107. D3Jubilee  Two-pronged approach MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond

108. D3Jubilee  Two-pronged approach 1.Build up Entrepreneurs MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond

109. D3Jubilee  Two-pronged approach 1.Build up Entrepreneurs 2.Build up Investors MISSION: To foster the growth of Social Entrepreneurship in Korea and beyond

110. D3Jubilee  Building up Entrepreneurs

111. D3Jubilee  Building up Entrepreneurs  Corporate Advisory Services  Essentially comes down to raising capital

112. D3Jubilee  Building up Entrepreneurs  Corporate Advisory Services  Essentially comes down to raising capital  Research Reports  Necessary for potential investors

113. D3Jubilee  Building up Entrepreneurs  Corporate Advisory Services  Essentially comes down to raising capital  Research Reports  Necessary for potential investors

114. D3Jubilee  Building up Entrepreneurs  Corporate Advisory Services  Essentially comes down to raising capital  Research Reports  Necessary for potential investors  Financial Consulting  Speak the language of Investment

115. D3Jubilee  Building up Entrepreneurs  Corporate Advisory Services  Essentially comes down to raising capital  Research Reports  Necessary for potential investors  Financial Consulting  Speak the language of Investment  Business Mentoring  Many SE come from NPO backgrounds  Some are very young

116. D3Jubilee  Building up Investors

117. D3Jubilee  Building up Investors  Creating an Angel Investor Community for Impact

118. D3Jubilee  Building up Investors  Creating an Angel Investor Community for Impact  DIIN Roundtable

119. D3Jubilee  Building up Investors  Creating an Angel Investor Community for Impact  DIIN Roundtable The D3 Impact Investor Network Held every 3 months 10 Entrepreneurs Presented Over 150 guests 14 Impact Investors created 5 SEs invested USD 2.5 million raised

120. D3Jubilee  D3Jubilee Impact Companies

121. D3Jubilee  D3Jubilee Impact Companies

122. D3Jubilee  D3Jubilee Impact Companies

123. D3Jubilee  D3Jubilee Impact Companies D3 Cleantech Fund (US)

124. D3Jubilee  DIIN Investor Profile  Mostly High Net Worth Individuals  Experienced Investors  Keen to see Impact

125. D3Jubilee  Long-term Objectives  To support the creation of a sustainable ecosystem for impact investment  To raise “Superstar” social enterprises  To build a stable base of committed impact investors  Investing Locally and Overseas

126. Thank You!