Slow Money SoCal was thrilled to sponsor the Food Track for the SocEnt Challenge 2016. A gentle and supportive ‘shark tank’ for social enterprise, the Challenge offered several months of customized technical assistance and culminated in a Symposium at the Long Beach Petroleum Club in early May. The Symposium was attended by potential investors, thought leaders and other interested community members. The due diligence process and prize money was designed to catalyze additional investments from individual and institutional “impact investors” who wanted their money to provide financial AND social return on investment.
The SocEnt Challenge is based on a highly successful venture competition model first done in Michigan in 2013. Slow Money member Betsy Densmore, of Academies for Social Entrepreneurship is managing the program, backed by local foundations and businesses who prioritize community development and sustainability. Kyle Scrimgeour of Core Capital Management, and one of our original Slow Money SoCal founders was selected as one of the judges for the SocEnt Challenge Semifinals held at Saddleback College in March.
Slow Money SoCal Director of Investment Programs, Michelle Greenwood, caught up with Kyle at a recent Slow Money event where he was able to answer a few questions about his involvement with the SocEnt Challenge.
- Kyle, what drew you to working with the SocEnt Challenge?
Core Capital Management’s strategy is greatly in line with SocEnt’s mission, to successfully and responsibly create wealth and make the world a better place. I work with likeminded foundations and affluent clients who share a common, mission-driven value set, and are committed to a sustainable investment philosophy. Betsy and SocEnt’s is a great platform to facilitate investing in solution-based businesses.
- Kyle, I know after your initial involvement with Slow Money SoCal you found you needed to take a step back because of the legal and regulatory environments and the work you do as principal for Core Capital Management. That said, as a cofounder for the local Slow Money network, you are deeply familiar with the Slow Money philosophy. Can you talk a little about how you see the SocEnt Challenge moving forward the work of the local economy movement and Slow Money?
Starting up Slow Money SoCal was a lot of fun. At the time, our region had some people interested in the concept, but there wasn’t anything formally organized. I was able to get the organization to a tipping point, and to attract passionate and talented people. Today, Slow Money SoCal, along with other food & capital businesses in our region, are gaining more traction, but there remains a lot more work to do.
The first of Slow Money’s six principles is “We must bring money back down to earth.” It is a principle that has a lot of connotations, including connecting ourselves with our money and investments, as well as finding ways to make our money work more efficiently by being in greater alignment with our values and in the communities in which we live. Considering these kinds of connections does not mean that investing locally or sustainably and achieving a healthy return are exclusive of one another. Any time there is a larger population of enterprises from which to evaluate vetted, solid sustainable opportunities, the healthier the local economy, and the better the potential for successful investing.
Even though Slow Money SoCal and SocEnt are independent of one another, they share similar missions to support social and local challenges through economic means. Slow Money is a bit more focused on local and regional food systems, while SocEnt casts a wider net for social enterprises across most all sectors. Together, they can make for a great partnership in working together to help solve some of society’s most critical problems.
- Kyle, if you were looking to participate and move money into the local economy, can you touch on the value the SocEnt Challenge might bring to you as an individual in a local community?
I do participate in moving money into the local economy on many levels, including as both an investor and a consumer of goods and services.
Small businesses are an extremely important aspect of our society. In the US, businesses with less than 20 workers make up approximately 90% of businesses, account for the majority of net new job creation, and produce nearly half of the private nonfarm payroll GDP.
What’s really interesting, is that relatively speaking, investing in small businesses barely exists for a number of reasons yet there are a lot of exciting new changes taking place that warrant tackling the topic another time.
So, supporting small and businesses is vitally important to a healthy local economy, as are organizations like SocEnt that create showcases and market opportunities for potential participation.
- Why do you see social enterprises needing the SocEnt Challenge?
Small businesses often need access to capital at various stages in their life-cycles, from start-ups to more mature operations, and for different purposes. There are also many types of ways and means to receive different types of capital for a business, including grants, awards, debt, and equity – one size doesn’t fit all. There are also challenges in being “ready” to receive financing. An organization wishing to serve multiple investment purposes – economic and a commitment to the higher purpose of working to solve social and environmental issues – has to be that much better at articulating and executing its economic purpose, because excluding these externalities is much easier for the competition. Working with organizations that understand and support your mission is helpful, and the SocEnt works as a fantastic ancillary organization. That is why social enterprises would be attracted to the challenge.
- Can you give us a peek into what you looked for in the winning entries you reviewed for the semifinals in March?
From our lens, and to borrow from Cary Krosinsky and Nick Roberts, Core Capital Management views the best way to generate superior, risk-adjusted returns in our world today, is by incorporating long-term environmental, social, and economic trends within investment and ownership decision-making. Achieving global sustainability also requires the mobilization and recasting of the world’s capital markets, which is a process that must include providing investment and support to participating organizations locally. I looked for and supported the winning entries that have these kinds of multiple purpose metrics included in their overall plans and presentations.
Michelle Greenwood serves as Director of Investment Programs for Slow Money SoCal and was recently appointed for a six-month position as a Kiva Zip Small Business Advisor. She resides in Dana Point, California and can be reached for questions about Slow Money, LINC, Kiva at email@example.com. Michelle is also available for comment on the ideas and community developing around local investing.