Stories @CSI: Purpose Capital puts capital where it matters
By Lisa Ferguson, CSI Reporter
Imagine having the opportunity to help define and build a new type of market. It’s not yet clear who the key players are going to be. You get to create some of the first research, first products and first deals. You get to shape the future.
Assaf Weisz, Norm Tasevski and Karim Harji each had central positions within Canada’s social entrepreneurship community—Assaf as the founder of the Young Social Entrepreneurs of Canada network, Norm as a social entrepreneur-in-residence with Social Innovation Generation (SiG), and Karim as senior manager for partnerships and social impact at Social Capital Partners—and each could see that lack of capital was crippling many social ventures. The three teamed up in 2010 to form Venture Deli, connecting investors and social ventures as part of the emerging impact investment market.
“We did some really original work around where social finance and impact investment are and where they need to go,” Assaf says. But Venture Deli wasn’t going to be satisfied just doing research. “We wanted to be able to act on that, actually get some deals done.” Purpose Capital began with this intention as a subsidiary business line, and eventually grew to encompass the team’s entire business scope.
Sean Holt, the head of US-based merchant banking firm Om Ventures and an expert in negotiating and structuring transactions, had been exploring similar thinking and making similar deals. Deciding to bring the best of their two ventures together, the four joined to co-create Purpose Capital based at CSI Annex with a new vision of re-defining and diversifying the size, stage, risk-level and type of capital that was considered impact investing.
On a day-to-day basis, Purpose Capital works with entrepreneurs, investors and governments with the ambitious goal of channelling as much capital as possible into endeavours that matter to the world. This can range from organization-specific financing to more elaborate initiatives to build the market itself. For example, the team is currently working on an innovative project to infuse social entrepreneurship into the Canadian university system, a strategy meant to increase the pipeline of social ventures available to impact investors.
Assaf is a proponent of innovating in new spaces rather than accepting the limitations of already established systems. “One of the coolest things about waking up and doing this every day,” says Assaf, “is that we get a chance to actually get something right rather than coming along and trying to play a broken game. We get to influence the perspective on how social change happens or how you participate in it.”
Assaf believes impact investment is being constrained by the way it has been conceived. As Assaf explains, “Where it’s been placed so far is as largely early-stage investments, and that is usually the highest-risk part of someone’s portfolio, which means it’s often the smallest part.” As a result, much of the available capital of people who care about investing with purpose remains untapped.
The key to unlocking the rest of that capital, and moving it “from oil and gas to things that matter to the world,” Assaf says, is offering various products to appeal to different risk profiles. To that end, Purpose Capital focuses on diverse issues and opportunities for impact, including: education, to create the next generation of leaders; health innovation, to address what is both an enormous social issue and an enormous economic issue; tech for impact, to meet pressing social needs using emerging technologies; aboriginal prosperity, to create sustainable, resilience-creating economic development opportunities in aboriginal communities; and the bio economy (e.g., sustainable food and agriculture, clean tech and renewable energies), which Assaf says is “about getting our relationship to the environment right, and getting commerce’s relationship to the environment right.”
“I think often people can be self-limiting,” Assaf says. “I think we can afford to be a little more ambitious and a little more risk-taking.”
When it comes to making the world a better place, after all, the cost of failure far outweighs the price of success. Better to invest for people, planet and profit!
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