As crowdfunding continues to mature into a platform for raising investment capital, investors may feel that that they need more information to be sure they’re making prudent decisions. Crowdcheck works with companies seeking funding to compile due diligence and disclosure reports that may put your mind at ease. Their blog is a great place for entrepreneurs to stay current on the latest regulatory rulings and interpretations, and their list of crowdfunding platform partners is a valuable starting point for both investors and entrepreneurs.
Posts Tagged ‘impact investing’
The Global Impact Investing Rating System (GIIRS, pronounced “gears”) is a system used to assess the social and environmental impact of companies and funds in developed and emerging markets. It uses a ratings and analytics approach similar to Morningstar’s investment ratings and Capital IQ’s financial analytics. Run by B Lab, GIIRS provides a series of tools that impact investors can use to aid them in making intelligent impact investing decisions. B Analytics, a tool launched in late 2014, is a customizable platform used to measure, benchmark and report on impact. Visit website.
A growing number of funds, brokers, and clearinghouses are directing investor capital into socially- and environmentally-oriented projects around the world. At this time, most of the investments are shares of funds, open just to accredited investors. However, some of these projects have opportunities for other investors, including limited crowdfunding, and Direct Public Offerings open to all. This is a very partial list of these sorts of opportunities.
About impact offerings
This chart from Cutting Edge Capital is a good introduction to four different types of offerings (DPO, donation-based crowdfunding, current accredited-only 506c offerings, and soon-to-be-available non-accredited crowdfunded investing opportunities under new SEC rules).
Clearinghouse of mostly-established consumer product companies looking for additional investment. At present, accredited investors only, but once SEC rulemaking is complete, plans to open crowdfunding opportunities for smaller investors.
CuttingEdgeX is a clearinghouse that lists a variety of Direct Public Offerings, in which investors purchase shares of a fund that pays annual dividends, with the principle being redeemed after a specified period. Open to non-accredited investors.
By pooling investors’ capital, Greenbacker acquires a diversified portfolio of income-producing renewable energy power plants, energy efficiency projects, and other sustainable development investments. Their net-worth and income thresholds are significantly lower than typical accredited investor limits (about 25% of the norm).
Mission Markets is a broker/dealer for impact investments of many kinds (funds, project finance, structured debt products and later stage private and public companies). Accredited and institutional investors only.
Oakland-based Mosaic uses crowdfunding campaigns and larger investments by accredited investors to fund clean energy projects. A new platform on Mosaic’s site focuses on growing renewable energy by giving people an opportunity to finance solar arrays on other people’s homes. NOTE: unless you live in California, Colorado, Oregon, Nevada, or New York, you may only invest on the Mosaic platform if you are an accredited investor.
This recent and relatively in-depth article (January 2015) offers a great look at the promise and excitement of impact investing: “Bannick says that if you picture a graph of the capital invested every year in the United States, it would look like a lopsided barbell: on one end, tens of trillions of dollars seeking the highest return possible; on the other, nearly $45 billion of philanthropic money seeking no return whatsoever. In the middle, very little. ‘We need to fill in that capital curve,’”he says. One potentially viable pool: high net-worth individuals. The 127 people to date who have signed the Gates-Buffett Giving Pledge, promising half of their money to philanthropic causes, have a net worth of around $600 billion. The Forbes listing of the richest 400 Americans alone totaled just over $2 trillion in 2013. ‘The pools of capital are absolutely massive,” says Bannick. “And while some may still be looking to maximize their investments, a lot of these folks would be willing to invest and get a more modest return, perhaps, while having a fabulous social impact.” Read the article.
Peter Diamandis is the driving force behind the innovation-fueling X-Prize and Singularity University, and a leading writer and speaker on the potential for exponential and unexpected technological and socially/environmentally-beneficial breakthroughs in the years to come. We could easily have included him alongside his oft-colleague Ray Kurzweil as a Driver, but the breadth of his vision, especially in the book Abundance, tips him toward Dreamer-hood.
Book: Abundance: The Future is Better Than You Think
Abundance is a whirlwind tour through several interacting forces that Diamandis sees as driving widespread and largely unexpected innovations in the coming years.
Video: Abundance is Our Future
Video: Nine-minute montage of Diamandis media interviews; a good introduction to his primary themes.
Two recent Diamandis initiatives are designed for entrepreneurs and impact investors looking to make positive change in the world:
Book: Bold: How to Go Big, Create Wealth and Impact the World
Book review of Bold: The review’s opening sentences capture the gist of Diamandis’ breakthrough dreams: “Just as an asteroid wiped out the dinosaurs that ruled the Earth and made way for small furry mammals, a new wave of planetary disruptions is about to occur. The new asteroid is called ‘exponential technology.’ It is going to wipe out industries in a similar manner to the rock which fell on Earth during the Cretaceous Period.”
This article describes how peer to peer lending (or micro-lending) works, and compares several of the leading lending sites: Lending Club, Prosper, and Kiva. All these platforms allow investors to lend money to groups or individuals. Kiva loans are interest-free; principle only is returned. The other two require credit checks from investors and return interest as well as principle. Read the article.
An overview of impact investing exchanges in countries around the world. Read more.
Ecotrust is a Portland-based organization that has been a leader in rethinking finance for nearly a quarter century. Its regionally-focused initiatives have attracted investors from around the country and created innovative models for others to replicate elsewhere. Visit the website.
This blog post by a long-time impact investor is a good quick introduction to the thinking behind this leading-edge approach to directing capital toward places where it can do the most good. Read the post.
Investors’ Circle is a pioneer of the early-state impact investing world. Their members are accredited investors, though they also accept donations in support of their work. Visit website.
The Invest With Values website includes a wide-ranging, easy-to-use directory with investment opportunities in the following areas: local banking, community investing, sustainable and responsible investing, and impact investing.
The website also contains numerous tools to help you on a path toward investing with your values. Visit website.
SOCAP is a long-running conference series focused on increasing the flow of capital directed toward social good. The conferences bring together impact investors and social entrepreneurs along with many other sectors. Visit website.