ImpactPHL Ventures just threw $15M into Philly's impact investing ecosystem - Generocity Philly

Funding

Jul. 20, 2017 12:14 pm

ImpactPHL Ventures just threw $15M into Philly’s impact investing ecosystem

The initiative is overseen by Ben Franklin Technology Partners and aims to encourage more funders to invest in social enterprises: "It's not that these dollars alone are going to fill the need."

Ben Franklin's Margaret Bradley at Wednesday's RAIN Conference.

(Photo via Twitter/BFTP)

Editor's note: The estimated size of investments by the fund has been added, as well as description of Investors' Circle's 2016 investments. (7/20, 4:42 p.m.) The language describing Margaret Bradley's views of the nonprofit sector has been updated to be more accurate. (7/25, 10:55 a.m.)
Margaret Bradley is audibly jazzed when describing the significance of impact investing in the Philadelphia region.

“My whole professional life is about this,” said the director of investment partnerships and lead for social impact investments at Ben Franklin Technology Partners of Southeastern Pennsylvania, the state-backed seed and early stage capital provider for local tech startups and social enterprises. (Refugee aid platform NeedsList just went through the organization’s fintech accelerator, through which it won a $25,000 investment.)

As she sees it, investing in socially conscious startups can fill in the gaps of solving social ills where government and nonprofits can’t solve problems alone: “It’s in the gray area that really cool stuff happens.”

ImpactPHL is a year old, and in that time, the impact investing advocacy collective made up of local venture capitalists, business leaders, nonprofits and others, including Ben Franklin, has been working to further Philadelphia as a city where impact investing can thrive. So far, that’s happened primarily through its training workshops, Best for PHL.

But its latest initiative, ImpactPHL Ventures, is jumpstarting the group’s work by putting an extra $15 million into the local impact investing ecosystem for startups promising social, environmental and health returns as well as financial ones.

Ben Franklin, which is overseeing the funding initiative, was born as a double-bottom-line investor, Bradley said. So, this work isn’t necessarily new — but the amount of money pledged and the partners that have signed on are.

ImpactPHL Ventures’ funding partners include:

  • Sprint Point Partners
  • Investors’ Circle
  • Drexel University
  • Temple University
  • Safeguard Scientifics
  • Independence Health Group
  • Bucks County Retirement Board

The amount contributed by each partner was not released. The average investment is expected to be roughly $300,000, “dependent on how many of the investors are drawn to any particular deal,” Bradley said.

This is the largest funding initiative Ben franklin has organized to date. For context, Investors’ Circle invested $11 million in 25 companies nationally in 2016.

“What’s significant about these partners is that they are each turning to Ben Franklin to add efficiency to the kind of investments they want to do with these kinds of early stage companies,” Bradley said.

In other words: Startups don’t need to knock on five doors to try to solicit funding from five investors; they can knock on just one — Ben Franklin’s — to be hooked up with those same five investors. Similarly, the funders benefit from Ben Franklin’s network of startups.

But don’t call it a fund: The funded companies don’t all need to have the same demographic or programmatic interests beyond focusing on social, environmental and health problems in some way, and the funders have the final say in where their money goes. Each co-investor will be offered the opportunity to opt in or out of each proposed investment.

“It is both about efficiency and about communicating that Philadelphia is the place to be” for impact investing, she said.

There’s a call to action here for other potential impact investors: Get involved, because there are more worthy ventures to fund than there is funding available.

“It’s not that these dollars alone are going to fill the need,” Bradley said. “Fifteen million is a good starting point, but there is plenty of appetite beyond that.”

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