This post is the first of a series on impact investing.
For our first post, we highlight the work of Dan Levinson, founder of Main Street Resources and chairman and co-founder of New England Impact Capital, a first-of-its-kind fund in New England striving to support companies to create superior returns for both investors and society. Dan is also chairman of the Schumacher Center for a New Economics, on the Board of Directors at Social Enterprise Greenhouse and advises many nonprofits and socially responsible businesses in transition and development.
Q: What is impact investing?
A: Impact investing means investing in businesses that provide a positive social or environmental value to the community alongside generating a strong financial return.
Q: Which established companies in the impact space inspire you?
A: Companies like Seventh Generation, Stonyfield Farm, SolarCity, Whole Foods, and Eileen Fisher inspire me a lot to name a few. These companies were all started by innovative and passionate entrepreneurs who believed that having a good business meant much more than strictly the bottom line, and you see that in each of their company’s mission.
Q: Do Investors always earn less when they invest for impact as well as return?
A: The perception is that there is a tradeoff, but the historical data shows us that impact driven investing performs in line or better than traditional investing.
Q: How can an individual participate in impact investing?
A: The most established options are public vehicles such as Trillium Asset Management and Calvert Investments to name a couple prominent examples. There are some quasi-government options and some individuals participate in angel investing groups, but there really are only a few proactive funds that support growing companies. The main impact funds include Renewal Funds, SJF Ventures and Bridges Ventures and are most similar to the focus and structure of New England Impact Capital.
Q: In what industries do impact companies tend to operate?
A: In the impact space, most companies tend to focus in one of these industries: recycling, sustainable food and water, environmentally friendly consumer and commercial products, business services, health and wellness, alternative energy, and education.
Q: Do you consider impact investing a new development or a preexisting notion?
A: To us, all actions and investments have impact. The point is to be aware and make decisions according to your values. In older times, companies had a positive impact on society when we lived in smaller closer communities, and there was complete transparency. The 20th century brought the industrial revolution and technology boom, which among other things caused the centralization of wealth and power and scale of most companies to far outstrip our abilities to manage them. What we’re seeing now is a movement back, demanded by people, to companies that serve the common good rather than vice versa.
Q: Is the impact space growing?
A: Yes, very strongly. The number of entrepreneurs starting great businesses and the number of sophisticated investors trying to invest in line with their values are all skyrocketing.
Q: What’s your hope for the space?
A: That it becomes mainstream and taken for granted that actions of companies and investors should be for common good as much as for financial returns.
Q: Can you tell us a little about your new impact project?
A: New England Impact Capital (NEIC) is an Impact Investment SBIC Fund formed to generate meaningful financial and social returns. NEIC, led by Jenifer Gorin and me, will use an impact driven investment approach to invest in small growing New England companies to create superior returns for investors and society.
For any further questions or interest, contact Ronny Chatterjee at ronny@mainstreetresources.com
Ronny Chatterjee
Investment Fund Analyst
Ronny Chatterjee received his degree from Brandeis University, where he developed a passion for private equity and venture capital. He has experience as a Research Analyst at GXT Green, a Boston based firm helping the corporate community meet their economic and social sustainability needs, where he is currently consulting on a project to redistribute waste, lower greenhouse gas emissions, and supply jobs in poverty stricken areas. The culmination of his interests in investing and social enterprises led him to Social Enterprise Greenhouse and Main Street Resources as a Project Analyst, where he is leading the effort to launch a social impact focused private equity fund, New England Impact Capital.