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How Is Mission-Driven Investing Helping Us Tackle Global Challenges
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00:00Hello, and welcome to our session on mission-driven investment.
00:09Some of you may prefer the term sustainability investment,
00:13others might prefer the term responsible investment,
00:16and yet others might prefer impact investment.
00:19But whatever the term, you recognize it as a powerful force in private equity
00:27that is assembling and mobilizing talent and financial resources
00:33to tackle global problems,
00:37global environmental and societal problems.
00:42And our four panelists today, who I'll introduce to you in a moment,
00:46are leaders in this field.
00:49First, I'll introduce myself.
00:52My name is Amiel Cornell.
00:54As you may have already guessed, I'm the moderator for this panel discussion.
00:58I'm founder of VentureCraft Studio, a boutique consultancy based here in Paris.
01:03We help startups and scale-ups to achieve sustainable growth
01:08using improvisation, skillful improvisation.
01:14I'm also adjunct professor of entrepreneurial finance
01:18at ESCP Business School here in Paris.
01:21I'm on the editorial board of an international scientific review
01:26called Speaking of Entrepreneurship and Innovation.
01:29And I am the author of the book
01:32Spinning into Control, Improvising the Sustainable Startup.
01:37Enough about me.
01:39Let me introduce our panelists,
01:41starting with Marie Eklund from 2050.
01:45Marie is really an entrepreneurial financier,
01:49and we'll hear more about the innovations
01:54that Marie has been spearheading at 2050.
01:59We have Ash Puri from Light Rock.
02:02Ash is based in London.
02:04Light Rock, of course, has an international footprint.
02:08Ash also has experience as an operating executive.
02:11He was CEO of a family business in the food tech sector.
02:18And then here we have Nadja Brissou-Megen from Ixange,
02:24where she is focused on impact investing in early stage, seed stage,
02:30and even sometimes later stage companies.
02:34And then we have Machi Jidenma from General Catalyst,
02:43a U.S.-based firm with a global footprint,
02:47which is even growing further in terms of its international reach.
02:53Like Ash, Machi has operating executive chops experience.
02:59Machi was a senior executive at PayPal and also at Facebook.
03:06Oh, excuse me, Meta.
03:08That's great.
03:10Very good.
03:11So let's get into the discussion.
03:13For starters, I think it would be interesting to the audience
03:17to hear how each of you got into impact investing,
03:21this new field of financial services.
03:26Was there a certain trigger, a certain event, an epiphany moment,
03:31or was it more of an organic process
03:34that led you to get into impact investing?
03:38Ash, maybe you can start us off.
03:41Thank you.
03:42Bonjour, everyone.
03:43Very nice to meet you all.
03:46I've been investing in non-impact businesses for quite some time,
03:52and roughly about 18 years of experience.
03:56But I think it was the birth of my daughter.
03:59When I became a father, I realized,
04:02what am I doing to change what the society should look like
04:07for my children and also for the future generations to come?
04:10Now, as an investor, when you're investing into companies,
04:14you're kind of shaping the future a little bit.
04:16So for me, the real transformation was when I became a father,
04:21made me realize that I can do my bit by finding the right kind of companies
04:25which could be financially attractive,
04:27but at the same time, there is a level of impact
04:30which could shape society for the future.
04:32Beautiful.
04:33Marie, how about you?
04:36For me, it's been more an organic process,
04:40but maybe I can think about two very important ingredients
04:44in why I became this mission-driven investor.
04:47The first one is that I'm French.
04:50I was born in Paris,
04:51but I also grew up a little bit in Vancouver, B.C.
04:54And in Canada, when you're in Vancouver, you're super close to nature.
04:57It's a big part of who you are and what you do.
05:00So you have that connection.
05:01And on top of that, the culture, the local culture,
05:04is a lot about First Nations,
05:05indigenous cultures that are putting men within nature.
05:09So you have this culture which is very different than European.
05:13So I had that in me.
05:14And the second thing,
05:16which I believe kind of triggered that all the way through,
05:20was that when I got pregnant for my first child,
05:24and you see nature at work in your own body,
05:28in your flesh and blood,
05:29and then you finish and you're feeding your child, right?
05:33And this is so, so beautiful, this trust in nature.
05:36But then when you have to leave,
05:38when I had to leave my baby to go to work,
05:40because I really thought that was the rational,
05:42important thing to do both for him and for me,
05:45it's completely counter-natural.
05:47Interesting.
05:48So for both of you, it's deeply personal.
05:50It's deeply.
05:51And so therefore, the thing is,
05:54when you have that, and it's counter-nature,
05:56the level of demand that you have on the job
05:59and on the time spent to do something else,
06:01it has to be bigger than you,
06:03it has to be bigger than him,
06:04it has to be bigger than us.
06:07So then I became way more engaged
06:09into making my time at work
06:11so much more useful and impactful.
06:14One understands better why it's called
06:16mission-driven investing.
06:19How about you, Nadia?
06:20Nadia, excuse me.
06:21Yes, thanks.
06:23Myself, I come from a family of doctors in Ireland,
06:27French-Irish.
06:28I was raised in France,
06:30but with extended family in Ireland, in Dublin,
06:33most of which doctors,
06:34and I wanted to be a doctor myself when I was younger,
06:38but I decided not to go to medical school
06:40and to go to business school.
06:43And while I was doing this business degree,
06:46I set up an NGO.
06:48I went to Africa, to Ghana, Mali,
06:50and it was pretty obvious to me
06:52that I was not an NGO person,
06:55but I wanted to be in business,
06:57and I tried to find a way to, let's say,
07:00bring business towards, let's say,
07:03mission-driven purposes
07:04or build something that is bigger than us.
07:09I think I'm aligned with Marie there totally,
07:13and then I started working in renewables,
07:15very attracted to innovation
07:17in the energy sector at the time,
07:19and then from there,
07:21I just built the rest of my career,
07:23and very happy now to be Alexandre,
07:27to bring this new impact dimension
07:29to an originally generous fund.
07:34It's interesting.
07:35Already I'm picking up on another theme here
07:37from the two of you
07:38where having an international experience
07:40or an international perspective
07:42has somehow influenced your move
07:44from traditional investing
07:46to impact investing.
07:48I know you also have a degree
07:50in environmental studies.
07:52Did that come after you decided
07:54to make a commitment to impact investing,
07:55or was that something that preceded it?
07:58Yeah, I think it was just at the time
07:59when I was trying to find a space
08:01where I could work in the professional world
08:04without being a doctor
08:05and find a space for myself.
08:08So, yeah, I went to London.
08:09I did a degree in environmental studies,
08:11and that's how I got into renewables.
08:13Ah, okay.
08:14And Machi, how about you?
08:16Yeah, I'd like to answer this question
08:18actually in two parts.
08:19So, first on the personal side,
08:22but also providing color
08:24on General Catalyst's journey
08:26around mission-driven investing.
08:28So, on the personal side,
08:29a number of years ago,
08:31I did some personal work on my side
08:33to figure out, like,
08:34what is my life's purpose?
08:36And what I came up with at the time
08:38was to drive transformational impact
08:40and help bend the arc of human progress.
08:43And I still have the notepad
08:45where I wrote that down.
08:46And I think having that clarity
08:48was what led me to WhatsApp, for example,
08:51where I was for a number of years
08:52because I saw the impact it had
08:54around the world.
08:56But when I was thinking long-term
08:58about what I wanted to do in venture
09:00and the sorts of firms
09:01where I could do work
09:03that was aligned with my personal purpose,
09:05that's what then led me to General Catalyst.
09:08Our mission as a firm
09:09is to invest in positive,
09:11powerful change that endures.
09:13The way we got there
09:14was actually similar
09:15to the way I got to my own clarity.
09:18So a number of years ago,
09:20Ken Chenault,
09:21the former CEO of American Express,
09:24joined us as our chairman.
09:26And one of the key things
09:28that he had us do
09:29was to come up with our mission statement
09:31for the first time.
09:32So we've actually been around
09:33for over 20 years.
09:34But it was in the last couple of years
09:36that we actually did that work.
09:37And that's how we came up
09:38with our mission.
09:39and one of the trends
09:41that we noticed
09:42was that initially
09:43when we were investing
09:44in technology innovation,
09:46they mostly drove efficiencies.
09:49But what we found
09:50was that as a lot
09:51of these technology platforms
09:52became more and more influential,
09:54they're actually transforming society
09:56and having more of an influence
09:58and impact in the world.
10:00And so for us,
10:01being mission-driven is critical
10:02because it helps attract
10:04the right founders.
10:05The right founders
10:06are usually the folks
10:06who are mission-driven
10:07and have a long-term view
10:09as to how they drive innovation
10:11and the impact
10:12that they want to have
10:12in the world.
10:13And so for us,
10:14that philosophy
10:15is very foundational
10:15because it's aligned
10:17with our mission statement
10:18as a firm,
10:19but it's also aligned
10:20with the types of founders
10:21and the types of problems
10:22that we want to solve
10:23in the world.
10:23We want to solve
10:24the hardest problems
10:25and that often needs
10:26patient capital,
10:28mission-driven founders
10:29and a long-term view
10:30towards solving these issues.
10:33Well, I know that
10:34at General Catalyst,
10:35also you've been very innovative
10:36in this space.
10:37You've had a long-standing commitment
10:40to impact investing
10:42and you've continued
10:44to continuously innovate
10:46and I look forward
10:47to hearing a little later
10:48as I know the audience will
10:50about some of the new funds
10:51like the creation fund
10:53that you created.
10:55So I'd like to shift gears
10:57a little bit
10:57and talk about
10:58some of the challenges
11:00of being an impact investor.
11:02Yes, it helps tap into
11:07a tremendous amount
11:08of energy and life mission,
11:11but it's not easy work,
11:12is it?
11:13One of the things
11:14that is typically definitional
11:17in how we think
11:19about impact investing
11:20is that it's meant
11:21to deliver rich financial returns
11:24as well as high impact.
11:27Now, tell us the truth.
11:29Is that absolutely necessary?
11:32And if yes,
11:34how do you accomplish that?
11:37Machu, you want to start us off
11:39on that?
11:39I'm happy to start us off.
11:41So this is actually something
11:42we think very carefully about.
11:44I know we've been talking
11:45about impact investing.
11:47When we were doing
11:49the foundational work
11:50I just talked about
11:50a few minutes ago.
11:52One of the core
11:53company building principles
11:54that we actually
11:55pulled together
11:56was what we call
11:57responsible innovation.
11:59And for us,
12:00responsible innovation
12:00is a philosophy around
12:02one, tackling the
12:03most challenging
12:06problems
12:07that are facing
12:07humanity today.
12:09And two,
12:10also focusing on
12:11tackling those problems
12:12in a way
12:13that doesn't lead
12:14to unintended consequences.
12:16So I am based
12:18in San Francisco.
12:18I've worked in Silicon Valley
12:20for over 10 years.
12:21And I remember
12:22I was also at Meta
12:23as you mentioned
12:24and there was a phase
12:25in Silicon Valley
12:26where the mantra
12:28and the mission
12:28around building a company
12:29was to move fast
12:30and break things.
12:32And that was very inspiring
12:33to a lot of founders
12:34in Silicon Valley
12:35and around the world.
12:36But what we found
12:37as we researched
12:39kind of the evolution
12:39of technology is
12:40as technology becomes
12:42more and more influential
12:43you can have that mindset
12:45when you're tackling
12:46challenges like healthcare
12:47or you're looking
12:48at climate change
12:49or defense or energy
12:50it's important
12:51to be more intentional
12:52strategic
12:54and more collaborative
12:55like you know
12:56the industry elevates
12:58disruption for example.
12:59But what we found
13:01is that in places
13:01like healthcare
13:02it's more important
13:03to be collaborative
13:04with the health systems
13:06and the key stakeholders
13:07in the industry
13:08that have been there
13:09for a long time
13:09and already have
13:10the distribution
13:11and the access
13:11to customers.
13:13So a key part
13:14of responsible innovation
13:15and you know
13:16the way we do business
13:16as an investment platform
13:18is being collaborative
13:19with stakeholders
13:20working very closely
13:21with the government
13:22but also working
13:23very closely
13:23with founders
13:24who have a long term
13:25orientation
13:25and then the last piece
13:27I wanted to emphasize
13:27is we actually believe
13:29that that orientation
13:31would lead
13:32to the largest financial
13:33and societal returns.
13:35We don't believe
13:36we think it's a false
13:37construct
13:37to think you either
13:39do good
13:39or do well
13:41in business.
13:41We think it actually
13:42belongs on the same platform.
13:44You can do good
13:45and do well
13:46and so that's
13:47the bet we're making
13:48over the next 10 to 20 years
13:49that the best businesses
13:50are businesses
13:51that do both.
13:52And Machi,
13:52does that go beyond
13:53being a value,
13:55a core value
13:56of the firm?
13:56Is it something
13:57that you have
13:58broken the code on?
14:00Are you able
14:01to deliver
14:01high returns
14:03that your LPs
14:04are expecting
14:05and also
14:06achieve the missions
14:07that your entrepreneurs
14:08are coming to you
14:09to partner on?
14:10So I like to give
14:11two examples.
14:12We actually have examples
14:13in our portfolio.
14:14So one of the companies
14:16that we've partnered
14:17very closely with
14:17over the past
14:1810 plus years
14:20is Stripe.
14:21So our current CEO,
14:23Hemantin Adria,
14:24was an investor
14:24in the seed round
14:25of Stripe.
14:26It was called
14:26Dev Payments
14:27at the time.
14:28But one of the things
14:29that you'll find
14:30if you spend time
14:31with Patrick Collison,
14:32the CEO of Stripe,
14:33is that he's very
14:33mission-driven.
14:34So they're in the 14th
14:36or 15th year
14:36of building that business.
14:37So this has been
14:38a long-term bet
14:39for them, right?
14:40They're worth
14:41over $50 billion
14:42at this point.
14:43And their mission
14:44is to increase
14:45the GDP of the internet.
14:47Right?
14:47It's not a
14:48messianary goal.
14:49They really think
14:50about what they're doing
14:51as uplifting entrepreneurs
14:54and literally expanding
14:56the GDP of the internet.
14:57So we believe Patrick
14:58is a great example
14:59of a mission-driven founder
15:01who over the past
15:0210 decades,
15:03sorry,
15:03over the past 10 years
15:04and in many years
15:06to come,
15:06will keep compounding
15:07his business
15:08because the foundation
15:09around how he's thought
15:11about what he wants
15:11to solve is right.
15:13And so that helps him
15:14attract talent,
15:15attract capital
15:16from the right people
15:17like General Catalyst.
15:18And he also has permission
15:20to continue to build
15:21his business.
15:21What we found is
15:22businesses who are
15:23not mission-driven,
15:24after a while,
15:25they run into issues
15:26with the government
15:27because what they're building
15:29is in conflict
15:29with the betterment
15:31of society.
15:32And at some point,
15:32people want to tear
15:33that down.
15:34So that's one key example.
15:35And then very quickly,
15:36the other key example
15:37is this company
15:38called Livongo.
15:39So I know you mentioned
15:39our creation fund.
15:41The creation fund
15:42is a fund where
15:43we bet on people.
15:44So instead of waiting
15:45for an entrepreneur
15:46to come pitch us an idea,
15:47we partner with a person
15:48that we really strongly
15:49believe in to ideate
15:51on what the future
15:52could look like.
15:53So there's a CEO
15:54in our network
15:55called Glenn Tolman
15:56who was a long-time
15:57repeat founder in healthcare
15:58who our CEO,
16:00Hemantin Aja,
16:01spend time with,
16:02literally ideating,
16:03thinking through
16:04how can we read
16:05imagine chronic condition
16:06and diseases
16:07like diabetes.
16:08And together,
16:09they started a company
16:10called Livongo.
16:11Actually,
16:11the way the name
16:12came about was
16:13how do you enable
16:14people with diabetes
16:15to live on the go
16:16without having to think
16:17about the diseases
16:18all the time?
16:19Because now,
16:19it's so difficult
16:20to live with
16:21those kinds of diseases.
16:22But you can imagine
16:23if you leverage AI
16:25and technology
16:25and data
16:26to alert them
16:27when they're having
16:29like a high blood sugar
16:30spike, etc.,
16:31you can totally change
16:32the quality
16:33of their day-to-day lives.
16:34And so Hemant and Glenn
16:36created that company
16:37through the Creation Fund,
16:38which is really a bet
16:39on people.
16:39And in seven to eight years,
16:41they were able to exit
16:42that business
16:42for $18 billion.
16:44We'll come back
16:44to the Creation Fund,
16:45I'm sure,
16:46when we talk about
16:47innovations in this sector.
16:49Nadja,
16:49when you listen to
16:51Machi talk about
16:52this kind of
16:52virtuous resonance
16:55that they're untapping
16:56between delivering
16:57rich financial returns
16:59and high impact,
17:01does that resonate with you?
17:02is that something
17:03that you strive for?
17:05Do you think
17:06it's absolutely critical?
17:07Or maybe...
17:09Yeah, well,
17:09I think basically
17:10for all around the table
17:12who have been reading
17:13about impact
17:14and mission-driven,
17:15there is what's called,
17:16you know,
17:16the double bottom line approach
17:18or triple bottom line approach.
17:19I think it's pretty clear
17:20that impact funds
17:22or impact investors
17:24are trying to provide returns
17:26to their own customers,
17:28LPs,
17:29their own investors.
17:32Yet again,
17:33I think sometimes
17:34you see
17:35it's important to say
17:36that the market
17:37is also slightly segmented.
17:39I think each value proposition,
17:42each fund
17:42has its own,
17:43you know,
17:46constraints
17:47and marketing
17:48to their own investors
17:50in terms of returns.
17:51and so I think
17:53for the audience
17:53it's important
17:54to understand
17:55the level of segmentation
17:57that there is
17:57in this sub-segment
17:59of the investment.
18:01I'm glad you bring that up.
18:02So what that suggests to me
18:04is that there can be
18:05certain investments
18:06you make
18:07where you know
18:08that they don't promise
18:09the kind of scale
18:11that will deliver
18:12very high returns
18:13but yet you think
18:14that they're very important
18:15to invest in
18:16because of the impact
18:17that they can have.
18:18I think the whole point
18:20is to be very much aligned
18:21with the thesis
18:22and the mandate
18:23of the fund.
18:24Again,
18:24every fund
18:24has its own mandate.
18:26Every fund
18:27has its own structure.
18:29Marie might elaborate
18:30on the structure
18:31which is very specific
18:32to their own mandate
18:35being in Evergreen.
18:38Yes,
18:38I think it's a question
18:39of finding
18:40the right equilibrium.
18:42Where it's important
18:43to say
18:43is that I see
18:44that where
18:45venture capital
18:46comes in
18:47is to help
18:48companies think big.
18:50I think
18:51mission-driven
18:52can also be
18:53sometimes very much
18:54local.
18:55If you're looking
18:56at the healthcare domain
18:57in particular
18:58or even at
18:59climate topics,
19:00I mean,
19:00climate topic
19:01of course
19:01is a global topic
19:02but some segments
19:04or startups
19:05are addressing
19:05very local issues.
19:07I think it's important
19:08that the venture capitalists
19:10and the investors
19:13strive to support
19:14the ambition
19:15of the companies
19:16whether the ambition
19:17is native,
19:19very intentional
19:20as you were saying
19:21or try to
19:23find the mission-driven
19:24investors
19:25and help them
19:26think very big
19:27and probably
19:29put a bit of stress
19:31on them
19:32but help them
19:33think big.
19:33I'm going to turn
19:35to Marie
19:35because bouncing
19:37off of what
19:37Nadja was just saying,
19:39Marie,
19:39it reminds me
19:40of a conversation
19:41we had in anticipation
19:43and preparation
19:43for the session
19:45in which you said
19:46that not all LPs
19:48are going to be
19:49aligned
19:50with your mission.
19:53LPs, of course,
19:54being the limited partners
19:55who confide their money
19:57to these investors
19:58to invest
20:00across a portfolio.
20:03Maybe tell us
20:04more about that,
20:05your experience
20:05with different kinds
20:06of LPs
20:07and how you've
20:08achieved the alignment
20:09or how do you qualify
20:10which LPs
20:11can work with you?
20:12Sure.
20:13Something I've learned
20:15as a VC
20:16both investing
20:17in companies
20:18and raising funds
20:19is that
20:20the way finance
20:21usually works
20:22is like machine learning
20:24meaning
20:25you make decisions
20:26today based
20:27on past historical data.
20:29The past historical data
20:31we have in finance
20:32is around
20:32financial performance.
20:34It's profitability
20:35of the funds.
20:36It's performed, right?
20:38And so all the decisions
20:40that are made today
20:41by classic finance investors
20:43are not only looking
20:45at what has worked
20:46in the past
20:46work meaning
20:47gaining a lot of money
20:48even if it breaks things
20:50but they're overfitting
20:52meaning they are trying
20:53to make the decision
20:54on the schemes
20:56that have earned
20:57the most money.
20:59Right?
21:00So I don't see
21:01how classic finance
21:03is they don't rethink
21:04the way they're making decisions
21:06that they're going
21:07to make the change
21:08because they're just
21:09reproducing the past
21:10and we all know
21:12that the past
21:12is the thing
21:13that has produced
21:14a piece
21:15of all the big problems
21:16that Machi
21:17is mentioning.
21:18So the one thing
21:20which is hard
21:21in fundraising
21:21is to get investors
21:23to stop being that way
21:26because the reason
21:27they're doing that
21:27is that they have
21:29asset classes
21:30they have a way
21:31of justifying
21:32the decision
21:32they're making
21:33and you come up
21:35with a very brand
21:36new product
21:36saying well
21:37to your point
21:38when you invest
21:39you're shaping the future
21:40you're not predicting
21:41the future
21:42and so what are
21:43the problems
21:44you want to solve
21:44what is the society
21:46you want to live in
21:47in 5, 10, 20 years
21:49from now
21:49and what do we know
21:50of the problems
21:51that exist
21:52and of the solutions
21:53that are the best suited
21:54to solve them
21:55to make these decisions.
21:57So do you have to be
21:58an evangelist?
21:59Absolutely
21:59I think we are all
22:02we are all evangelists
22:04and the thing
22:06and the way to do it
22:07because if you stick
22:08to historical data
22:09there's no historical data
22:11on environmental
22:12or social performance
22:13right?
22:14That's a good point.
22:14There's nothing.
22:14we are in the process
22:16of creating those
22:17to create the pattern
22:18so after classic finance
22:20and followers
22:21can come in
22:21so we're trailblazers
22:23right?
22:24Which creates a problem
22:25when you're going
22:26to market your fund
22:26to certain LPs
22:28Well, exactly
22:29you cannot go
22:30to the classic asset managers
22:31who are thinking that way
22:33so what you need to do
22:35is to go to the people
22:37who have understood
22:38that what we're living in
22:40is a complete transformation
22:41of the economy
22:42just like the digital economy
22:44was, right?
22:45We didn't have
22:45a venture capital model
22:46in 1990
22:47the way it's built now
22:49right?
22:50Now it's a product
22:51on shelf
22:52but it was not
22:53in the early days
22:55so all we're doing
22:56is to creating
22:57the new paradigm
22:58of the type of products
23:00and way of investing
23:01in the sustainable transformation
23:03of the economy
23:04and I feel
23:05we're funding today
23:06to Mars Champions
23:07just like
23:08back in the 2010s
23:10or 22,000
23:12we were backing
23:13the champions
23:13of the year
23:14of today
23:15it's the same thing
23:17but the only thing
23:18that is different
23:19is that today
23:20not only are they
23:21going to be the champions
23:22in terms of financial performance
23:24and environmental performance
23:25and social performance
23:26so triple performance
23:28but on top of that
23:29they're less riskier
23:31people always forget
23:33they think about
23:34financial performance
23:35they always forget
23:36that finances
23:37risk reward
23:39investing today
23:40in companies
23:41that are not sustainable
23:42is super risky
23:43I would not do it
23:44so without naming names
23:47what are the kinds
23:49of LPs
23:49who do get it
23:51and who are aligned
23:52with your vision
23:53so people who have
23:54a strategic vision
23:55of the future
23:56and who either
23:58have this long term
24:01motto
24:02like family
24:03owned business
24:04foundations
24:06or corporates
24:08or even institutional
24:09investors
24:10but that have understood
24:11like for example
24:12if you take
24:13an insurance company
24:15today
24:15if you're not
24:16financing
24:17the sustainable
24:18transformation
24:18of the economy
24:19your business
24:20your core business
24:21it has risk
24:22in 10 years from now
24:23because the society
24:24is not going to be insurable
24:26so it is all
24:27the companies
24:28even institutional investors
24:29that have at the top
24:32people who understand
24:33that what is coming
24:36and who have the strategy
24:37of doing it
24:39and of anticipating it
24:42Ash
24:42if I'm not mistaken
24:44Light Rock
24:44in 2022
24:45raised a climate tech fund
24:47860 million euros
24:49something like that
24:52were you there
24:53at that time
24:54if yes
24:55did you have visibility
24:56of the kinds of LPs
24:57that you were able
24:58to bring on board
24:59that was a sizable fund
25:00that was a successful closing
25:02yeah so we raised
25:05860 million euro fund
25:06was Europe's largest
25:07climate fund
25:08in 2022
25:10and I just want to echo
25:11what Marie was saying
25:12earlier right
25:12so we are kind of evangelists
25:15but at the same time
25:16there are problems
25:17which are very evident
25:18right now
25:19which everyone is noticing
25:22including investors
25:24now you have to sit back
25:25and think about
25:26one thing right
25:28as an investor
25:29you want to make
25:29the most amount of money
25:31but at the same time
25:32if you are tackling
25:33big problems
25:34these tend to be
25:35global by nature
25:37and if you back
25:38the right companies
25:39which have the right
25:39technology
25:40or the right approach
25:41to approach
25:42these problems
25:43by default
25:44you are building
25:44a global business
25:45so not only
25:46you are addressing
25:47a financial return
25:48challenge
25:49but also you are making
25:50a big difference
25:51because you are solving
25:51a huge issue
25:52which applies to many people
25:53so when it comes to
25:55evangelizing with LPs
25:57or finding the right
25:59kind of companies
25:59that's kind of our approach
26:01how do we find
26:02those big macro problems
26:03and back them
26:05with the right kind of capital
26:06that is required
26:07and be patient
26:08because these things
26:09take time
26:10so when it comes to LPs
26:12we have a climate fund
26:14this climate fund
26:15is helping with
26:16climate mitigation
26:17because we have to
26:19decarbonize the economy
26:20but it's also
26:21in the same time
26:22we are having
26:23with climate adaptation
26:24we cannot ignore
26:26what's happening
26:26to the environment
26:27right now
26:27just to give you
26:29an example
26:29we invested recently
26:31in a company
26:31which is using
26:33satellite data
26:34to monitor power networks
26:35one would wonder
26:36why do you need
26:37to monitor power networks
26:38with adverse climate change
26:40and weather patterns
26:41changing dramatically
26:43over a period of time
26:44our power networks
26:45are more susceptible
26:46to downtimes
26:47our power networks
26:48are susceptible
26:48to breakages
26:49which causes wildfires
26:51and right now
26:52how do you predict this
26:53it's impossible
26:54and you know
26:54we're talking a lot
26:56about AI
26:56at Viva Tech
26:57how we can use
26:58some of this clever AI modelling
26:59with past plus
27:01the data we're getting
27:02in real time
27:03to predict
27:03and guide these guys
27:04the power networks
27:05to help them
27:06do better decision making
27:07this is a very financially
27:09attractive investment
27:10but we're also going
27:11to reduce the amount
27:11of downtime
27:12which makes it better
27:13for everyone
27:13so there's a big win-win
27:14from that perspective
27:15which is important for us
27:16and just going back
27:17to your point earlier
27:18about financial returns
27:20and impact
27:21we invest in
27:24we want to do
27:24sustainable investing
27:26it's not philanthropy
27:27we're here to make money
27:28but at the same time
27:29we want to create
27:30a difference
27:30now we look at this
27:33through three lenses
27:34which is people
27:35planet
27:36and productivity
27:37because impact
27:38is not the same
27:39across the globe
27:39impact is different
27:40in Europe
27:41to what's in India
27:42to what's probably
27:42in Latin America
27:43and so we adapt
27:44how we look at impact
27:46and what the company does
27:47now one of the best ways
27:49of doing so
27:49is trying to really
27:50understand the bare bone
27:51mechanics of the business model
27:53and trying to derive
27:54what are the elements
27:56what are going to be creating
27:57the positive impact
27:58so product-led innovation
28:01or product-led impact
28:02is a natural KPI
28:03that we try to monitor
28:05now this is different
28:06for different businesses
28:07like I was saying
28:07I invested in a business
28:09which is helping data centers
28:12reduce energy consumption
28:14almost 2% of United States
28:16electricity is going to be
28:17consumed by data centers
28:18probably will go up to
28:196% or 7% in the next
28:20by 2030 is estimated
28:22because of the fact
28:23that we are using
28:23so many GPUs
28:24now to cool these data centers
28:27you actually use more energy
28:29and you use water
28:29and KPI
28:31you use almost
28:32enough water
28:33which could be used
28:34for a town of 50,000 people
28:36is there a technology
28:38which can help you
28:39reduce that energy consumption
28:40is there a way
28:41you can avoid using
28:42that water
28:42so that the water
28:44can be put to better use
28:45is a big challenge
28:47and this is a global challenge
28:48because data centers
28:49are cropping up
28:49everywhere in the world
28:50that's the kind of problems
28:51we go after
28:52and this is attractive
28:53to LPs
28:54and this is attractive
28:55to the consumers
28:56of such technologies
28:56interesting
28:57interesting
28:58it so happens
28:58that tomorrow morning
29:00I'll be moderating
29:01another panel
29:02with climate tech entrepreneurs
29:05and one of the things
29:07that I've learned
29:07from them
29:08in the preparation
29:09for that panel
29:10is that
29:10those are very
29:11capital intensive businesses
29:14and so it's not like
29:15investing in digital
29:17here you really have to
29:19be ready to put
29:20a lot of money
29:21to work
29:22in order to build factories
29:23or large air capture plants
29:27have you found that
29:28with your climate tech fund
29:29that these businesses
29:30maybe in some ways
29:32in terms of their scale
29:33and complexity
29:33resemble other traditional
29:35businesses
29:35you've invested in
29:36but what about
29:37the capital intensity
29:38that they represent
29:41and the amount of capital
29:42that they need from you
29:43in order to succeed
29:44in their mission
29:44it's a very good question
29:46it's a difficult question
29:48but the reality is
29:49we cannot change
29:50or reverse climate change
29:52without decarbonizing
29:54or reversing the things
29:55we used to do in the past
29:56to do that
29:57we have to
29:58set up new processes
30:00new factories
30:01new ways of doing things
30:02which unfortunately
30:04will require capex
30:05or more capital
30:07are we investing
30:08in businesses
30:09which are helping
30:10in that endeavor
30:10yes totally
30:13but it is a
30:14it is a decision making
30:15where we want to understand
30:16if these businesses
30:17commercially ready
30:18and then we're trying
30:19to understand
30:19if the technology risk
30:21has been dearest
30:22then what kind of adoption
30:24is the market willing
30:25to offer them
30:26in terms of
30:26either off takes
30:28or you know
30:28contracts
30:29which are
30:30take or pay contracts
30:31but there is a willingness
30:32for the market to buy
30:33once the solution is ready
30:34and we try to understand
30:36that and we try to fund that
30:37but at the end of the day
30:38if we see a clear path
30:40to generation of revenue
30:41we will absolutely
30:42be funding these businesses
30:43but the bottom line is
30:45if we have to reverse
30:46climate change
30:46we have to
30:47fund such businesses
30:49that is unavoidable
30:50Machi I'd like to come back
30:52to you
30:52and hear more about
30:54the creation fund
30:55because I know
30:55that's one of the innovations
30:57that you've been spearheading
30:58at General Catalyst
31:00and there is a lot
31:01of innovation going on
31:03in this field
31:04I want you all to know that
31:05and right here
31:06you have four of the innovators
31:09so please tell us more
31:10about what you're doing
31:10with the creation fund
31:12yeah with the creation fund
31:13what it really helps us to do
31:14is to be more intentional
31:17in the way we think
31:18about investing
31:18so I'll give an example
31:20so obviously
31:20in November of 2022
31:23chat GPT caught
31:24the zeitgeist
31:25and the global consciousness
31:27of folks who are interested
31:28in technology
31:28and over the past 18 months
31:31we've probably spent time
31:32with a thousand plus founders
31:34who are building an AI
31:35but what we found
31:37was we couldn't actually
31:38find any world class team
31:40that was investing
31:40at the intersection
31:41of healthcare and AI
31:42and as a firm
31:44that has traditionally
31:45spent a lot of time
31:46investing in healthcare
31:47we have over 100
31:48portfolio companies
31:49in healthcare for example
31:50we have partnerships
31:51with over 20 health systems
31:53in the US
31:54we just thought
31:55this was a missed opportunity
31:56and so what we did
31:58was we kind of scouted
31:59our network
32:00and found an incredible
32:01entrepreneur
32:03Manjil Shah
32:03who had exited
32:05or who had just
32:06come out of his last business
32:08and was looking to
32:09start another company
32:10and we worked
32:11very closely with him
32:12so similar to the example
32:13I gave earlier
32:14on this panel
32:15around Livongo
32:16sketched on a scratch pad
32:18really figured out
32:20a way to ideate
32:21and figure out
32:21how to build
32:22a foundational model company
32:24around at the intersection
32:26of healthcare and AI
32:27obviously with healthcare
32:28safety is really important
32:30and it's hard
32:31for the more general
32:33foundation model companies
32:34to focus on healthcare
32:36because they have
32:36other sectors
32:37other less gnarly sectors
32:40to build for
32:41but this was an opportunity
32:41to build from the ground up
32:44partner with the healthcare systems
32:46to design the platform
32:47and have the kind of
32:48safety measures
32:49that they would
32:50that would kind of
32:51get them comfortable
32:52to build apps
32:53or work with founders
32:54who are building apps
32:55on top of the platform
32:56so the company
32:57is called Hippocratic AI
32:58we let the seed round
33:00into the company
33:01and actually the company
33:02just raised a series
33:03series A round recently
33:04and it's currently valued
33:05at 500 million dollars
33:06so it's just a
33:08great example
33:08of how to be intentional
33:10like even if you don't
33:11see a founder
33:11who's building in an area
33:13if you see a gap
33:14in the marketplace
33:15how can you help
33:16architect
33:17and construct
33:18a platform
33:19that can help
33:20reimagine
33:21and revolutionize
33:22it's an important area
33:22of the economy
33:23so you really become
33:24co-creators
33:25with the entrepreneurs
33:26of their businesses
33:27exactly
33:28and I'm sure
33:28drawing on your experience
33:30as an operating executive
33:31is very helpful
33:32exactly
33:32so we think about
33:33ourselves as investor
33:35operators on that fund
33:36and that was the
33:37inspiration behind
33:39naming it
33:39the creation fund
33:40we really get to create
33:41and co-create
33:42from the ground up
33:43with legendary founders
33:45in the ecosystem
33:47unfortunately
33:47I know we're going to
33:48lose you any moment now
33:49sorry
33:52much is expected
33:54at another stage
33:55where there's going
33:56to be a
33:57yeah so I'm actually
33:58pretty pumped about
34:00doing it
34:00and I think it's
34:00actually related
34:01to what we're sharing
34:02you know as part
34:03of being mission driven
34:04making sure that
34:04we're inclusive
34:05from a gender perspective
34:07bringing women
34:08to the table
34:08and making sure
34:09we're investing in women
34:10so as some of you
34:11might know
34:11there's a female
34:12founders challenge
34:13that's happening
34:13right about now
34:15and so I'm looking
34:15forward to helping
34:16judge that session
34:17okay
34:18we'll let you go
34:20whenever you need
34:21to step out
34:22but I would like
34:22to continue
34:23with you Najah
34:29is there
34:29there are so many
34:30challenges
34:31when it comes
34:32to impact
34:33or mission driven
34:35investing
34:36and I know
34:37you live them
34:38every day
34:41and yet
34:41the problems
34:42that we're facing
34:43the environmental
34:44problems
34:44the societal problems
34:45are so urgent
34:47do you feel
34:48optimistic
34:49are we going
34:50to be able
34:50to achieve
34:52the sustainability
34:54development goals
34:55that's set by
34:56that's the tricky
34:56question that we
34:57prepared
34:59yeah I think
35:00we need to
35:00remain optimistic
35:01I think
35:02what I feel
35:03I'd like to share
35:04with the audience
35:05today
35:05and probably
35:05very much
35:06aligned with
35:06our colleagues
35:07here
35:07is that
35:08I feel we have
35:09a form of
35:09responsibility
35:10being intermediaries
35:12what we do
35:13is that we
35:14collect capital
35:15and we allocate
35:16capital
35:16and I think
35:18this is a very
35:19crucial point
35:20in the capital
35:23flows
35:24around the world
35:24and I hope
35:26to feel
35:27that the more
35:28people
35:29and the younger
35:29generation
35:30is now
35:31being very much
35:32attracted
35:33to impact
35:35thesis
35:35I'm sure
35:36the number
35:37of CVs
35:38that you receive
35:39weekly
35:40yearly
35:41is increasing
35:42year over year
35:44and this is
35:45for me
35:46a very strong
35:46signal
35:47I also think
35:48that we
35:50very much
35:51speak about
35:52environmental
35:52issues
35:53I would like
35:54to tap on
35:54to what
35:55my colleague
35:56said about
35:56healthcare
35:57I think
35:58we have
35:58a strong
36:00focus on
36:01health
36:01on the
36:02impact
36:03thesis
36:03I think
36:05cancer tech
36:05is also
36:06a space
36:07where there's
36:07a lot of
36:08progress
36:09and capital
36:09to be
36:10allocated
36:10which brings
36:11strong
36:12impact
36:12for patients
36:14and for
36:14the healthcare
36:15system
36:15and for
36:16the cost
36:17of the
36:17healthcare
36:18system
36:18in general
36:18it should
36:20be also
36:20in the
36:21heads
36:21of people
36:22in the
36:22audience
36:23and that's
36:24just an
36:25example
36:25but I think
36:26it's interesting
36:27and maybe
36:28just one
36:28comment
36:29I was
36:30you were
36:31talking about
36:31AI
36:32I remember
36:33my first
36:34finance class
36:35and it was
36:35like
36:35one dollar
36:36today is
36:37better than
36:37one dollar
36:38tomorrow
36:38it was a
36:39very simplistic
36:40approach
36:41of how
36:42you can
36:42make returns
36:43and I think
36:44it's just
36:45we need to
36:45understand
36:45what is the
36:46use of
36:47having two
36:47dollars at
36:48the end
36:48of the
36:49day
36:49instead of
36:49one
36:50if there's
36:50nowhere
36:51to use
36:52it
36:52to spend
36:52it
36:53and if
36:55people are
36:56not treated
36:57well
36:57and if we
36:58cannot
36:58live
36:59decently
37:01so this
37:02is just
37:03to reflect
37:03on
37:03very simplistic
37:04kind of
37:05takeaway
37:06I'm glad
37:07you go
37:08back to
37:09it
37:10that we
37:11as a
37:11society
37:12have to
37:12accept
37:12that we
37:13may not
37:13always be
37:14able to
37:15get the
37:15kind of
37:15financial
37:16returns
37:16that we
37:16have come
37:17to expect
37:17from this
37:18class of
37:20assets
37:20we need
37:22to focus
37:22more
37:23on the
37:24impact
37:25whether it's
37:26in healthcare
37:26education
37:27water security
37:28or climate
37:29that's a good topic
37:29for your next book
37:30on whether we
37:31should continue
37:32measuring GDP
37:33the same way
37:34but that's
37:34I leave it to
37:35you
37:37thank you
37:37for that
37:40you know
37:41one thing
37:41I wanted
37:42I want to give
37:43the audience a chance
37:44to ask questions
37:45but just before we do
37:46that it occurs to me
37:47that one topic we
37:48haven't addressed
37:49which is very
37:51challenging
37:51in this field
37:53is measurement
37:55how do we measure
37:56impact
37:58do those metrics
37:59exist
38:00are they standardized
38:01I know the answer
38:03to that
38:03no
38:05so what do we do
38:06about that
38:07or what are you doing
38:08at your firms
38:08Ash what are you doing
38:09at Light Rock
38:10about measuring
38:12impact
38:13whether it's when you're
38:14qualifying prospective
38:15investments
38:15or tracking the progress
38:17of companies
38:18in your portfolio
38:19that's a very interesting
38:21discussion we have
38:22at our IC
38:23because like I was
38:24saying earlier
38:24for us
38:25if you want to invest
38:26in any company
38:27it has to have a
38:28financial return
38:29and an impact return
38:30and there's a minimum
38:31threshold
38:31below which we don't
38:33we don't invest
38:33in those companies
38:34because we're not
38:35seeing the kind of
38:35impact we want to see
38:36from those businesses
38:37now in order to do
38:39that the impact
38:40as you said
38:40there's no standardized
38:42way of doing things
38:43so we have been
38:44working on our own
38:46impact frameworks
38:48which we have designed
38:49and these tend to be
38:51in these tend to be
38:53KPIs which are either
38:54directly related to
38:55the company
38:56or can be derived
38:57from the operations
38:58of the business
38:59to understand
39:00what is really
39:01the impact
39:01that this business
39:02can create
39:03is it reducing
39:04carbon dioxide
39:04is it reducing
39:05less water
39:06is it actually
39:07helping more people
39:07save lives
39:08because the device
39:09we're using
39:09can probably cure
39:10people faster
39:11better
39:12is it cheaper
39:13so that it'd be
39:13faster adoption
39:14there are different
39:15KPIs to see
39:16how many lives
39:17can we touch
39:17or what kind of
39:19level of improvement
39:20can we do
39:20and venture capital
39:22firms tend to invest
39:23over a period of time
39:24call it 5 years
39:25or 10 years
39:25what is the level
39:27of impact
39:28you're trying to build
39:29over that time period
39:30if you multiply that
39:31and that threshold
39:32is achieved
39:32only then
39:33will we invest
39:34in that
39:34even if the company
39:35is very very
39:36financially attractive
39:37if not
39:38it becomes a very
39:39heated discussion
39:39at our IC
39:40because we would not
39:41probably invest in those
39:42well I could go on
39:43and on on this topic
39:44but I want to make sure
39:46that we do
39:46give the audience
39:48an opportunity
39:49to ask some questions
39:52so I believe
39:53that there's someone
39:54with a microphone
39:55in the room
40:02yes
40:03no
40:06there's a question
40:08we just need a mic
40:09here it comes
40:11hello everyone
40:13my name is
40:14Simon Selstrom
40:15I'm an impact founder
40:17building
40:18to solve
40:19the global
40:19skills shortages
40:21by training
40:22young talents
40:23in emerging economies
40:24please hold the mic
40:25close to your
40:25okay
40:26hello
40:26so
40:29if you didn't hear
40:30I'm the impact founder
40:31of a company
40:32called directed
40:33development
40:34we train
40:35top talent
40:36in emerging economies
40:37to solve
40:37global skills shortages
40:38now my question is
40:41what is
40:42the number one
40:43advice
40:44you would give
40:45to an early stage
40:46impact founder
40:48who's just
40:48starting out
40:49their journey
40:50so it's a bit
40:50of an open-ended
40:51question
40:52can either
40:53things not to do
40:54or things
40:55that you
40:55you know
40:56should do
40:58I'll take that one
41:00we have this
41:02methodology
41:03around alignment
41:04so I think
41:05there's
41:07the way it's built
41:08is basically
41:09first you need to
41:10understand what
41:11aligns you
41:11as a person
41:12you know
41:13what is your own
41:14journey
41:15what do you think
41:15you should do
41:16and what is your
41:17place to do that
41:18and then build
41:19the company
41:19around that
41:20first
41:20right
41:21then you need
41:22to find the people
41:23with the team
41:24that are
41:25really looking
41:26to achieve
41:27the same goal
41:28that are bigger
41:28than you
41:29right
41:30but that you
41:30also share
41:31other incentives
41:33on
41:34and then
41:35you need to
41:36build the business
41:36model around it
41:37where you're sure
41:38your business model
41:39is aligned with
41:40the impact
41:41you want to create
41:41that's a trick
41:43usually whenever
41:44you look at
41:45any type of business
41:46a lot of the time
41:47the money they're
41:47making
41:48and the margin
41:48they're making
41:49is going against
41:51impact
41:51so at some point
41:52it doesn't have to
41:53be mitigation
41:54it has to be a win-win
41:55business model
41:56then you need to
41:58understand
41:58what is your value
41:59chain dependencies
42:00it's a value chain
42:02shift
42:02sustainable transformation
42:03right
42:04what are you going to
42:05be dependent on
42:06how do you align
42:07the interest
42:08of your suppliers
42:09with you
42:09of your customers
42:10with you
42:11so think about
42:11your place
42:12in the ecosystem
42:14then you need
42:14the right
42:15indicators
42:16in terms of
42:16social and
42:18environmental impact
42:19so understanding
42:20really not only
42:21is the impact
42:22you want to have
42:22but project yourself
42:2310 years from now
42:24it's a huge success
42:25right
42:26what would be
42:27the positive impact
42:28on society
42:29but potentially
42:30the negative impact
42:31if that deviates
42:32same thing on nature
42:34so what are the risks
42:35so the indicator
42:36you put in place
42:36are not only
42:37to monitor
42:38your positive impact
42:39but also to mitigate
42:40your negative impact
42:41and the last piece
42:43is you want the
42:43governance to be in
42:45so that it will
42:46stake in time
42:47so be careful
42:48about your board
42:50to ensure that
42:51even if you're not
42:52there
42:52you put the seeds in
42:54that it will
42:55continue on its
42:56mission
42:57even after
42:58so what is the
42:59governance to hold
43:00that in time
43:02well I think we can
43:03take one more question
43:04from the audience
43:05if there is one more
43:06question I see a
43:07gentleman back here
43:09we can quickly get him
43:10the mic please
43:17hi my name is
43:19Mark Griffiths
43:20I'm the CEO
43:21and co-founder
43:22of a company
43:23called CoSolve
43:24we accelerate
43:26decarbonization
43:27ventures
43:28my question is
43:30about how you
43:31actually make a decision
43:32regarding the
43:33companies you support
43:35regarding gut feel
43:37versus quantitative
43:38analytics
43:39when you actually
43:40make that final
43:41call
43:46I'm just going to
43:47repeat your question
43:48but I will hear
43:48what is the decision
43:50making
43:50or how do we make
43:51decisions about
43:51impact businesses
43:52when you make
43:56your decision
43:56how much of it
43:57is gut feel
43:58for you and your
43:59investment committee
44:00versus
44:00quantitative metrics
44:02so I'm
44:04a growth investor
44:05so
44:06I write
44:07slightly larger
44:08checks
44:08so quantitative
44:09does form a very
44:11important part
44:11of our
44:12work
44:12but I want to
44:13go one step
44:14beyond
44:14you see
44:15gut is very
44:16important because
44:17when you're
44:18studying certain
44:19businesses
44:19or you start
44:19looking to
44:20certain businesses
44:21as I was saying
44:22earlier
44:22what is that
44:23problem you're
44:23solving
44:24and you know
44:24by the time
44:26the companies
44:26come to our stage
44:27there is enough
44:28material proof
44:29to show what
44:29they're saying
44:30is what they're
44:31doing
44:31and if the
44:32level of impact
44:33in the respective
44:34domain is large
44:35enough
44:36beyond the gut
44:37there's enough
44:37validation of that
44:38business model
44:39however that being
44:41said
44:41I want to say
44:42sustainability is
44:43not a choice
44:44but at the same
44:45time people will
44:46only adopt
44:47sustainability
44:47if it is
44:48comparable on a
44:50unit metric
44:50basis
44:51to existing
44:52technologies
44:53or existing
44:53methods of
44:54doing things
44:54and will
44:55eventually become
44:55cheaper
44:56it's only when
44:56the adoption
44:57becomes more
44:57large scale
44:58so irrespective
44:59of the stage
44:59whether the
45:00business is
45:00early stage
45:01or later
45:01we try to
45:03understand
45:03how attractive
45:05are the unit
45:05economics of
45:06the business
45:06that we're
45:07looking into
45:07versus existing
45:09methods of
45:09doing things
45:10and if it is
45:11sustainable
45:12and better
45:13that's only when
45:13actually the
45:14people start to
45:15use it more
45:16and you see
45:17that in the
45:17numbers
45:17you see that
45:18in the operating
45:18metrics
45:19and that
45:19becomes a bit
45:20of the
45:20decision making
45:22factor
45:22and that will
45:23have to be
45:24the final word
45:25we've more than
45:26run out of time
45:27I'm probably in
45:27trouble with the
45:28programmers
45:29thank you all
45:31three of you
45:32for being such
45:34great panelists
45:35I'm just
45:35I'm just
45:35I'm just
45:35I'm just
45:36I'm just
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