By: Lisa Siganto | Managing Director, ImpaQt Fund | https://www.impaqtqld.com.au/impaqt-fund/
There is hope out there even with the lockdowns and the latest climate change report. Every day I meet inspirational impact entrepreneurs who have business solutions to climate change, health and social disadvantage. They are for-purpose for-profit businesses and what they want is supported resources, pathways, an educated community and access to venture capital.
Philanthropy can help the business initiatives to create public good through supporting the best ecosystems for impact entrepreneurs and then access to venture capital funding as a small percentage of the wealth that is in foundations, trusts and family offices.
In 2017, I was a board director of QUT Bluebox, the commercialisation arm of the Queensland University of Technology. I could see that 25 percent of the aspiring entrepreneurs on campus were solving environmental and social problems and they had no pathway or funding. This was common across Queensland.
With initial support from QUT Bluebox and long-term support from the English Family Foundation (EFF), we established ImpaQt Qld, to support the growing impact economy. Our experience of managing hubs of 80 social enterprises in Queensland as Social Ventures Australia Qld put us in good stead to establish the ecosystem and the impact pipeline
Fig 1 The 4 Pillars of ImpaQt Qld. Ltd. 2021
Our role is the gateway to for-profit impact investing in Queensland.
By June 2021, with continuing support of EFF and support from Griffith University, ImpaQt Qld is a not for profit and ImpaQt Fund is a venture capital fund with conditional registration. We have more than 10 entrepreneurs knocking on our door each week and more than 80 excellent businesses sitting in our pipeline.
Fig 2. With access to the ecosystem, ImpaQt Qld builds the pipeline of impact businesses and brings them to the door of ImpaQt Fund to consider for funding.
The core of our work is a focus on start-ups which are the best place to identify sources of innovation
The Thriving through Innovation Report in 2020 by CSIRO and University of Queensland confirmed that less than half of all ASX top companies have introduced a new product or service in the past three years so it’s over to our start-ups who are dreaming big. Exits or valuation spikes are expected from large organisations stepping in once they have proven the business. For example, Brisbane-based Ellume announced in 2021 a $231.8 million agreement with the U.S to scale up production of Covid 19 home tests. They found it difficult to get early-stage funding.
Venture capital is the best source of funding for the impact entrepreneur.
We put together this playbook for Profit for Purpose businesses “Demystifying the journey to impact investment” about sources of funding. There is a desperate gap for more Impact VC type-funding that focusses on impact intentionality, financial and impact returns.
While start-up investing is risky, the returns can be very high, rewarding and impactful for the impact investor.
There are two ways to diversify your risk.
Firstly, construct a portfolio of a number of investments. The larger the portfolio you hold, the more likely that you will score a winning company with sometimes unicorn (100x) results.
Secondly, be involved in due diligence and then ongoing strategy of each investment e.g. advisory board.
It’s fun to look at deal by deal but a fund offers access to a portfolio and does the due diligence for you.
We are enabling hope.
ImpaQt has invested in two Health and Wellbeing start-ups: Cardihab (addressing Australia’s biggest killer: Heart Disease) and Trieste Global (addressing silicosis on construction sites). We also hope for some unicorns in our portfolio like Afterpay which I invested in with $2.00 to $132 share price growth.
Our ecosystem role will be over when we have common language.
We have seen progress. Angel Investors and VC funds are talking impact. There are now university social impact programs. We have 60 percent female founders in our pipeline and 40 percent of the pipeline is outside Queensland.
There is a greater need to work with the financial services sector. The ESG wave is here but not yet connected to impact investing.
Philanthropy needs to demonstrate investment in impact venture capital directly to kick start the start-ups and show the way.
We see our role to walk alongside government but not to wait for them.
Our key role is to continue creating evidence about how impact businesses work.
When our country’s leaders are speaking the same language of profit for purpose our job will be done.
Disclaimer: The ImpaQt Fund is only available to sophisticated investors as identified in the Corporations Act. Potential Investors should obtain independent advice.
Examples of Queensland originating impact businesses:
Aug. 19, 2021
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