Impact investors aligning portfolios to principles and startup founders raising capital for their mission-driven companies can find each other through a new crowdfunding service.
Financial advisors should "not sleep on how big of a shift that we're having in the psyche of their investors," RenewVC General Partner Mark Hubbard said in an interview, referring to
"Even the most hardcore, money-motivated, fourth-generation kind of investor is trying to figure out what to do about this right now," Hubbard said. "It gives power to the idea of legacy. It lets you embody legacy in a different way."
More retail access to startup stock
Hubbard cited prior success stories of "Reg A," also known as "Reg A+," which is a provision of the Securities and Exchange Commission's
"You should research thoroughly any offering before making an investment decision," according to an investor bulletin
More planners and
"Most of my own sphere of friends and peers couldn't invest in our fund. To have something that allows people to invest for impact and to invest for economic opportunity is critically important," Bailey said. "Something other than wealth and income as a proxy for the sophistication of an investor would be transformative."
Case studies
Parker Clay "would typically be at a point where we would be looking to raise our Series A round," but the team led by founders Brittany and Ian Bentley decided "it was important to create this opportunity for everyone and not just accredited investors as a way of giving access to investment" in the firm, Ian Bentley said in an email.
The spouses adopted a daughter from Ethiopia and relocated to the capital, Addis Ababa, to run Parker Clay in order "to showcase the beauty of premium Ethiopian leather while creating safe, dignified employment for at-risk women," according to a video posted on the firm's
Actor Mary-Louise Parker gave Drew Barrymore a personalized Parker Clay bag
"Advisors play a huge role in the lives of their clients to create opportunities to invest with the intent to make money and also help their clients do good in the world," Bentley said. "We believe you don't need to choose one over the other and that both can exist. After living in Ethiopia for about three years, we have seen that, while aid is important, trade is a huge source of sustainable growth that can be leveraged to do a lot of good in the world."
More registered investment advisory firms will begin pointing clients to the opportunities in crowdfunding investments "once that gap is bridged through technology," according to Etan Butler, the chairman of
"It's just getting that information available to RIAs to point to, get it on the platform and then allocate to, just like they do with other things," Butler said. "The only way things are going to scale now going forward is if it's very comfortable for me to do on my iphone when I'm lying down."
Crowdfunding investment outlook
The early-stage investments that first became available after Congressional passage of the
Purpose Rounds is helping to remove the traditional distance between advisors and clients and the impact-focused startups seeking capital by taking care of the technical aspects of Reg A investments. Previously, only wealthy investors could access the investments, Hubbard said.
"That's a really satisfying way to do that kind of matching to what I say I value and what I do in the world," he said. "Everyone ought to have the opportunity to do that, and, yet, historically they can't."
