ADAP: Reflections on SEED

ADAP (A Different Approach to Poverty) invests in innovative early-stage entrepreneurs who are working to eradicate extreme poverty throughout the developing world. 

In this blog post, they reflect on SEED 2018, the value of the event, and key themes.

Four Reflections from the Inaugural SEED Conference

ADAP was delighted to be an Acceleration Partner for the first-ever SEED Conference on April 19-20 in San Francisco. As I wade through the stack of business cards and try to fulfill promises to my new LinkedIn connections, I want to share some reflections from this conference. From my perspective working in early-stage impact investing for the last decade, four key themes seemed to run throughout the event

 

Continue reading on ADAP’s blog…

Food System 6: Blended Capital

Food System 6 runs a 16-week accelerator program for both for-profit and non-profit entrepreneurs transforming how we grow, produce and distribute food.  With a focus on an integrated and holistic view of the evolution of our food system, FS6 works to align appropriate sources of capital for the unique needs of entrepreneurs who are designing a food system optimized for people, planet and communities.
In this blog, the first in a series, they introduce blended capital and how it can be put to work for entrepreneurs.

Part 1: The Basics of Blended Capital

Building a company from idea into a successful and viable entity is among the most difficult challenges anyone can undertake.  For entrepreneurs attempting to bring solutions into the marketplace that will have a positive and demonstrable impact on the health and sustainability of our food system, the challenges are even greater.  The food system is highly complex, heavily regulated, and incredibly interdependent. In addition, the food system is made up of living elements and people who are subject to changing weather patterns, intricate logistics, evolving consumer preferences, and complex supply chains that are often intentionally designed for opacity.

Spring: Finding Your Best Investor

Spring is using business as a force for good to empower social impact leaders with the know-how, network, and support needed to build a better business. As one of SEED’s Acceleration Partners, they bring a wealth of experience training and supporting entrepreneurs. Check out their advice for entrepreneurs on how to find the right kind of investor.

Seed Stage Impact Investing: Finding Your Best Investor

When you are starting a business, your most burning questions are usually related to money. Specifically, how can you get more of it. Obvious answers include revenue, savings, loans from friends or family, grants, crowdfunding… and of course, selling equity.

Ask any entrepreneur: the hardest part of a business plan is knowing when – and how – to raise capital. And within that question lies another: how do I attract investors from whom to raise capital in the first place? This is even more important for impact entrepreneurs.

Continue reading on Spring’s blog…

A Different Approach to Due Diligence for Early-Stage Deals

By Dan Luscher, Managing Director, ADAP Capital

ADAP (A Different Approach to Poverty) is excited to be a program partner for the first-ever SEED gathering. We believe that early stage impact investing suffers from massive inefficiencies, and we look forward to gathering a diverse group of folks working hard to address these inefficiencies so that we can compare notes and double down on the best ideas.

ADAP will be leading a session at SEED on how to perform thorough, but quick due diligence. We recognize that diligence at the early stage needs to be fundamentally different than traditional investment diligence of later-stage companies. So we have developed and refined our “Four-Hour Due Diligence” progress over the last four years based on the following core beliefs:

  • Early-stage investors who move quickly and decisively will be able to produce better financial returns and create greater impact over time.
  • Many – perhaps even most – funders have an investment process driven by fear. They find reasons to say “no.” Our investment process is driven by confidence, and we look for reasons to say “yes” (even as we ultimately have to say “no” to far more companies than we say “yes” to).
  • Time spent with entrepreneurs post-investment is critical, which is why we developed ADAP Advisory to focus on structured post-investment support of our portfolio companies.

The ADAP blog outlines the specific steps in our rapid yet rigorous diligence process, which is designed to take only four hours of the entrepreneur’s time (hence the name, with a tip of the cap to Tim Ferriss).

Social entrepreneurs have a very small window to make their business a success, and they shouldn’t spend most of that window responding to excessive due diligence requests rather than building their business. As investors seeking to help create financial returns as well as massive social impact, we need to be focusing as much as we can on the business-building process, not getting mired in the due diligence process.

ADAP hosted a Deal Room at SOCAP17 to showcase our rapid due diligence, and two great deals came out of that process. We are looking for opportunities to replicate this action-oriented approach at other events.

We look forward to discussing these concepts at the SEED conference in April and learning about what is working for other early-stage investors and entrepreneurs. Let’s work together to get more good deals done!

 

Dan Luscher is Managing Director of ADAP Capital LLC and ADAP Advisory LLC. ADAP Capital invests in innovative early-stage entrepreneurs who are working to eradicate extreme povertyADAP Advisory Services provides structured advice and support to companies to create the necessary foundation for sustained success.

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Coming Together to Hack the System!

By Marie Haller, Content Producer, www.seedconf.com

The agenda of SEED is coming together in really interesting ways, and I can’t believe how the partner list has exploded. These incredible practitioners are bringing senior managers and some of their best entrepreneurs to the conference; Village Capital, Echoing Green, ImpactAssets, Better Ventures, Impact Hub SF, Food System 6, ADAP Capital, Points of Light Civic Accelerator, GSBI / Miller Center (Santa Clara U), SV2, Closed Loop Partners and Spring.

All told, we will feature more than 60 speakers and 30 entrepreneurs across the two days. I am excited about the level of intimacy, the ‘do-tank’ mode that is going to be in play, and the sophistication of the folks that are signing up to be in deep together. We are coming together not just to share common practices but to get things done and attack at a systems level.

One piece of mainstage content I’m particularly excited about is on Thursday afternoon, when we will be discussing the opportunity for corporations to tackle seed stage acceleration in ways that push the envelope and leverage their secret sauce, employees, and brand. We’ve already confirmed an awesome lineup for this discussion with Erika Balbuena, Twilio.org, Tim Freundlich, ImpactAssets, Jean Shia, Autodesk Foundation, Ayesha Khanna, Points of Light Civic Accelerator, Dr Oliver Keown, GE Ventures and Doug Galen, RippleWorks (plus a couple more invites still out). Also, we are going to ask Doug to share some highlights of their research with Stanford Graduate School of Business on using blockchain technology for social impact (that will just be completed). These folks are working on cutting edge concepts that can help us all rethink the way that corporate entities engage with the social enterprise ecosystem.

Stay tuned for more  agenda announcements in the coming days! We have an oxford style debate, an impact hack and an ‘Angel Tank’ planned. And with ‘unscripted’ content, aka open space to co-design what we want to brainstorm in smaller, interactive groups …every attendee is going to be in the core conversation. Early bird tickets are on sale now.

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Seeding Donor Advised Funds for Impact Deals!

By Timothy Freundlich, President, ImpactAssets

It was 2014 when we realized seed stage impact investing was going to be a key part of ImpactAssets. That spurred Lindsay Smalling (now the Producer of SOCAP), Jed Emerson (ImpactAsset’s Senior Fellow), and me to write Seeding the Future, an issue brief that examined the landscape of seed stage investing through the eyes of entrepreneurs, accelerator leaders, seed stage funders, and foundations within the seed stage ecosystem of impact investing. Our goal in writing the brief was to provide greater clarity within the field in order to reveal previously unseen opportunities and gaps.

ImpactAssets was also propelled to offer a test selection of 10 VilCap and Better Ventures seed stage deals to our clients. We had started that year with just over $100 million in total assets. Since then we have built a portfolio of more than 250 early stage deals invested as part of a fast growing $440 million donor advised fund with almost 1,000 clients. What is even more amazing to me is that we averaged more than one early stage deal each week in 2017, and we see that accelerating.

Begin Preparing for The Next Wave of Impact Investors

It’s not so much a vision we have of seed stage as part of our future work, it’s more of an actuality careening at us. This is at the heart of what is compelling to the next wave of impact investors, and you build for it, lean into it, or it is going to either swamp you or go around you if you’re a donor advised fund that wants to cater to the next generation.  

Because donor advised funds (DAFs) aggregate among multiple accounts, they can drive down minimums by grouping investments. Additionally, since individuals receive a tax deduction when they open a DAF (since it is in fact a charitable donation), one might view the tax benefit as an initial “return” of sorts at the point of investment. Individuals understanding this tax deduction nuance may catalyze more support for patience over the long term that these early-stage investments demand. And, by utilizing seed funds and accelerators, DAFs can further diversify to get more clients in at more manageable levels.

Take This Work to the Next Level at SEED 2018!

ImpactAssets is coming in force to the inaugural SEED conference, bringing entrepreneurs from our portfolio, and inviting clients and key wealth advisors, because we feel we need to take what we have prototyped to the next level. We want to make our platform excellent, compelling, and scalable as this client hunger heats up! We want to leverage this work for others that wish to fast follow us or partner, so we’re hoping that the donor advised fund market shows up in force to compare notes and figure out how to leverage common infrastructure and capabilities, syndicate deals across client bases, and build for the $100 billion donor advised fund segment.

And, we’re coming because we want to be in at the ground floor of what needs to be a happening and isn’t (until now, that is)…a gathering of the ecosystem players for seed stage impact investing and entrepreneur acceleration.

Tim Freundlich is a long-time innovator in new financial instruments in the social enterprise sector, which he applies as President and Co-founder of ImpactAssets, the boutique donor advised fund focused on impact investing. He also co-founded and serves as Managing Partner for Good Capital, was a co-founder of the SOCAP conferences and Impact Hub San Francisco, and previously was with Calvert Impact Capital for 12yrs. He lives in San Francisco.

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