The Latest in Social Impact Investing: An Online Matchmaking Platform
High-net worth-individuals interested in impact investing can now make those investments through a new Financial Industry Regulatory Authority-regulated one-stop online platform. Enable Impact essentially functions as a matchmaking service, bringing together accredited investors – those earning $200,000 per year with a net worth exceeding $1 million – with social ventures looking for funding.
The technology “is designed to make it potentially easier, quicker and less expensive for impact investors to find and fund deals [and] social entrepreneurs to raise capital in a more efficient and effective way,” according to the company’s press release.
There is no charge for investors; the ventures pay a 7.5% fee if they succeed in raising funds through the website.
Financial advisors can access some information about deals on the site, but only their clients, if they’re accredited investors, can enter the website’s Deal Room after creating an account and completing a “self-accreditation process.” The minimum investment is $250,000.
In the Deal Room, investors can find due diligence and legal documentation about deals – provided by CrowdCheck, an online disclosure and compliance service for capital formation – then wire funds to close the deal. North Capital serves as the broker-dealer.
“Impact investing is a rapidly evolving area of finance that is well-suited to early and growth-stage deals, and the Enable Impact team brings a level of expertise, focus and purpose that we have not seen before," said North Capital’s founder and managing director, James Dowd, in a statement.
The deals are for Series A growth-stage social ventures, which already have a lead investor, revenues and customers and are looking to scale up with an additional $1 million to $2 million in new funding, according to Enable Impact founder Philip Berber. The deals can be equity- or debt-based, including deals involving convertible debt.
In the past two months, during its rollout, the Enable Impact platform has raised close to $600,000 to fund three ventures: NurturMe, focused on healthy food for children; Agora for Good, a platform to help people with their charitable giving; and PenPal Schools, which connects thousands of people in over 160 countries through curriculum-guided online exchanges. It hopes to raise a lot more funds.
“This is my way of paying it forward to help companies get the capital to grow their businesses that can address global issues in a sustainable way,” Berber told ThinkAdvisor.
The former technology entrepreneur became an active philanthropist after selling his electronic brokerage CyBerCorp to Charles Schwab for $488 million in early 2000, just weeks before the dotcom bubble burst. He went on to found A Glimmer of Hope, a charitable organization focused on helping those living in extreme poverty in Ethiopia through development of water, health, education and microfinance facilities.
“Charity is not the long-term solution,” says Berber. “We need business and partnerships to address those long-term issues.”