Investing in impact startups

info@socialfare.org www.socialfare.org SocialFare @SocialFareCSI

Impact investing

©SocialFare®

Impact investing = social return + financial return

©SocialFare® 3

Investing to develop new models

Public sector

NOT SUFFICIENT for

cuts needed

IMPACT INVESTING

New solutions and

business models

Private sector

It is not a solution

for everyone

©SocialFare® 4

Social value generates financial value

For users

For communities

New models

The recognition of this great value

produced for the community will

also increase the economic value

of our companies.

New jobs Improving

the quality of services

More equitable

distribution of value

among all social actors

Economic growth

SOCIAL

IMPACT…

…CREATE

ECONOMIC

VALUE

©SocialFare® 5

Impact investing = 36Mld$ managed assets in the world

Impact investing Assets under management, by sector, Mld $

Fonte: Global Impact Investing Network, 2016

• $ 36 billion managed according to the philosophy of impact investing in 2015

• Large institutional investors, BlackRock, Goldman Sachs, Bain Capital etc have launched funds or impact investing divisions

• The G8, the UN and also the European Union are promoting the impact invesing under various forms

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Strictly impact investing market in Italy in 2018

Strictly Impact €210,5 milioni

Impact €1,5 miliardi

Almost Impact €6,5 miliardi

210,5

MLN

©SocialFare® 7

Impact investing is also developing in Italy and it is estimated that the potential market for 2020 will be € 2.8 billion

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60+ Impact investors in Italy

• Agenzia per la Coesione Territoriale

• Anonimo

• Avanzi

• Banca Prossima

• Banca Popolare Etica

• Banco BPM

• BCC

• BNL

• Cassa Depositi e Prestiti

• Compagnia di San Paolo

• Equiter s.p.a.

• Etica SGR

• Etimos

• Finde s.p.a

• Finlombarda

• Fondazione Accenture

•Fondazione con il sud

•Fondazione CRC

•Fondazione Cariplo

•Fondazione Lang Italia

•Fondazione per l’Italia Sociale

•Fondazione Social Venture Giordano dell’amore

•Fondazione Sviluppo e Crescita (CRT)

•Fondazione Vodafone

•Garnell

•Genera s.p.a.

•Generali Italia s.p.a.

•Giorgiana Norarbartolo PFC

•Hermes Capital

•lmpact Alliance Fund

•ImpactHub Milano s.r.I.

• Invitalia

• Lendlease

• MainStreet Partners

• Make a cube3

• Oltre venture

• Opes Fund

• Pierri Philantropy Advisory s.r.l.

• Rancilio Cube s.r.l.

• Sefea

• Sella SGR

• SocialFare Seed

• Société Générale

• UBI Banca

• Unicredit

• Unipol Sai Assicurazioni S.p.a.

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Example

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Example: Brunello Cuccinelli

« The constant attention given by Brunello Cucinelli to the territory and to all

the individuals working for the company are the basis of long-term

development. The model of sustainable and polite growth supports and

supports the positioning recognized to the brand in the high end of luxury »

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Social value…

• The company pays its employees twenty percent more than the Italian average of wages in the manufacturing industry

• His employees finish the job at half past five and do not send work emails overtime

• Created the "Scuola dei mestieri", where subjects such as "mending and rowing", "cutting and packaging", "tailoring and masonry" are taught.

• Cuccinelli finances several cultural and restoration projects Construction of various parks

©SocialFare® 12

…Ehnaces financial return

+140%

from IPO

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Measurement of impact investment

International

private equity

report example

©SocialFare® 14

Finance an impact project

©SocialFare®

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How to finance an impact project?

• Grant (foundation and institutionals)

• Donations (private)

• Debt (banche etiche o convenzionali)

• Equity (fondi impact)

• Crowdfunding (equity, debit, donation and reward base)

©SocialFare® 17

Different structures for different projects

• Associazione

• Coop

• Srl impresa sociale

• Srl innovativa ad vocazione sociale

• Srl

• Srl + coop

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How to coose?

• Impact profit vs no profit

• Few founders vs more founders

• High growth vs slow growth

• 20-30+ y/o founders vs 40+

• Search for exit vs build and hold

• New or existing company (eg Coop..)

Class exercise

©SocialFare®

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Exercice: understanding the best structure for you

• Write dow who you are:

• New or existing?

• How many founders?

• How many people involved?

• Search for profit or low/no profit

• What impact?

• Looking to grow turnover double digit every year?

• Full time work or part-time?

• Other significant details?

Impact venture capital

©SocialFare®

Why venture capital and impact investing together?

In recent years new venture capital funds were

born, investing in start-ups or in young

companies that are economically sustainable

and which face the goal of creating a positive

social impact

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Oltre Venture

• In 2006 born Oltre venture, the first Social Venture Capital in Italy

• Over I has raised € 8m from 21 rich investors and has in 17 companies in different sectors: Microfinance, Temporary Social Housing, Healthcare...

• In 2015, Oltre II was established with € 23m with investments for families, the elderly, young people and children

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Centro Medico Santagostino

• Offer quality health services at affordable prices

• Founded at the end of 2009, the CMS is a chain of clinics that provide the main medical services

• 8 open medical centers (7 in Milan and 1 in Bologna); +120,000 patients served since 2009 to date

• It achieved economic sustainability at the end of 2014

©SocialFare® 24

Centro Medico Santagostino

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Permicro

• In 2007, PerMicro was founded, the first microcredit company in Italy

• It provides loans to non-bankable people allowing them to become bankable

• From 2007 to today + € 82 million disbursed, 4,000 jobs created

• It achieved economic sustainability at the end of 2014 and is considered a successful business model in Europe

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Toniic: the first global community of impact investors

It was founded in 2010 in San Francisco and is a community that collects:

• Individuals, family offices, foundations, funds

• 160 members representing more than 360 investors in 22 countries

• www.toniic.com

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T100-2016 Launch Report

• Report on 51 impact investing portfolio

• Three different types of investors (HNWI, Family Office, Foundation) with portfolios from 1 million to +100 million dollars

• Portfolios dedicated to different themes Impact: Education, Health, Community Development, Sustainable Agriculture, Environment, Cross Sectoral, Poverty, Financial System, Other

• Investor's domicile: 61% US, 24% EU, 10% Africa, 5% Asia

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The survey shows that impact investing has profitable returns

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Example: Kim Jordan founded New Belgium Brewery

• Kim Jordan founded New Belgium Brewery

• Society: environmental protection and creation of a work environment that respects and protects workers as much as

possible

• The company was sold to company employees thanks to a stock

option program. Kim wanted to share the company's success with

his employees

• Part of the profits were used to create a 15 M $ impact investing

foundation

• Kim has today an estimated assets of 225 M $

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Our VC - SocialFare Seed

©SocialFare®

In 2013 the first center of private social innovation in Italy was established

In 2016 SocialFare enhances its acceleration program

Three ways to

accelerate a startup

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2018: launch of SocialFare Seed fund

• SocialFare launched SocialFare Seed at the end of 2017

• First seed impact venture capital in Italy

• 100K€/startup average seed

• 6 private private investors

• SocialFare seed is not only capital but also a big network to open new sales channels for the starutps

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What are we looking for?

Strongly

motivated and

dedicated full-

time teams

Innovative and

scalable

business

impact models

Start-ups able

to grow

nationally and

internationally

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What we offer?

Up to 100K€ in

cash seed funding

4 month full-time

acceleration

Network 50+

investor & mentor

Free desk at

Rinascimenti Sociali

©SocialFare® 36

Where we invest in

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SocialFare acceleration programme

Selection 2-3 weeks

Call 2 months

Acceleration 4 months

Investor Day 1 day

ste

ps

Monitoring & Evaluation

©SocialFare® 38

Our portfolio

©SocialFare®

Our investments

Public administration

trasparency

Women

safety

Culture

& art

Quality

of work

Ethical fashion Cultural heritage Services to families

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A Social Impact

Fashion and Lifestyle

Accessories Company

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Social Challenges

Dependance on Aid

Clinical Depression

68.5 Million

Forcibly displaced

people worldwide

25.4 Million Refugees

Source: UNHCR

The Social Problem

#lifestylecollection

The Products Luxury Fashion and Lifestyle Accessories

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The Products Luxury Fashion and Lifestyle Accessories

#resortcollection

Brand awareness - Influencers

Paris

Gstaad

Geneva

Gallipoli

Oman

London

Qatar

Bethlehem

Saint Tropez

Dubai

Distribution Offl ine

Exercise

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©SocialFare® 54

How to finance an impact project?

• Grant (fondazioni)

• Donations (private e istituzioni)

• Debt (banche etiche o convenzionali)

• Equity (fondi impact)

• Crowdfunding (equity, debit, donation and reward base)

Investing in impact startups

info@socialfare.org www.socialfare.org SocialFare @SocialFareCSI