Mission Markets advances impact investing
Impact Investment , what Natural Investments has termed Regenerative Investment, is an emerging market that is becoming recognized as a new asset class in its own right. It’s generally defined as direct investment aimed at solving social or environmental challenges while generating financial profit. It differentiates itself within the arena of Socially Responsible Investment in that Impact Investment is proactive, direct investment in positive solution-oriented enterprise and largely separate from standard stock market investments, including mutual funds. Impact investment is gaining attention as a key piece of the puzzle in solving social and environmental crises. But, still in its infancy, there’s a continuing need to develop the landscape of Impact Investing on many levels. Investors need to hear about it, understand how it works, and have a means to evaluate the myriad of opportunities in terms of both financial and social performance. Investors, Social Finance intermediaries, and those organizations and companies doing the work of addressing critical problems in the world are working together to develop organizational capacity and build an infrastructure that can support a flow of new investment capital into this area; some estimate that up to one trillion dollars could flow into these high-impact opportunities over the next ten years.
An exciting new arrival to the Impact Investing landscape is Mission Markets. Mission Markets is a first-of-its-kind on-line platform connecting high net-worth individuals and institutional investors with a growing number of investment offerings from organizations and enterprises that are directly addressing social and environmental problems. Mission Markets was founded by Michael Van Patten and Steve Rocco, both of whom have extensive expertise in traditional capital markets coupled with a passion for advancing social welfare and environmental conservation. Michael has described the turning point in his life when he realized that all the time and energy he’d devoted to financial markets on Wall Street served no meaningful value; he then turned his efforts toward creating a career path that would allow him to use his expertise to make a positive change in the world for those who really needed it. Determined to make a difference,
Michael worked to develop an efficient, transparent arena for the Social and Environmental markets to get a foothold, understanding that the industry could only grow if it had the right infrastructure to support it.
Mission Markets is in its start-up stages and sits very much on the cutting edge, working to expand emerging social and environmental capital markets by providing a centralized marketplace with detailed information about offerings from a wide range of sectors: Community Investment, Social Enterprise, Microfinance, Sustainable Agriculture, Cooperatives, Water, Renewable Energy, Sustainable Fisheries, and Sustainable Infrastructure. In compliance with Securities and Exchange Commission regulations, the site only allows access for those who can shoulder the higher risk of untested investments, including accredited investors – individuals who have at least one million in assets (not including a home) or who earn over $200,000 annually, and institutions with over $5 million in assets. Investors can register to become members, and once approved as qualified investors, are able to view current offerings, learn about them in depth, make investments, and trade holdings on Mission Market’s Secondary Trading Platform.
For issuers, Mission Markets provides multiple layers of support. They help social enterprises and organizations extend their reach through their support of alternative capital raising structures like the Direct Public Offering, Cooperative Shares, Private Equity, Private Placements, and unregistered debt offerings. They provide marketing for offerings through widespread promotion of the platform itself, as well as via what they call a Virtual Road Show. Investor members are invited to online presentations, where individual issuers create video presentations describing their work and investment opportunities.
Mission Markets also helps strengthen the organizational capacity of potential issuers, and thereby the entire Impact Investment landscape, through their Minimum Listing Requirements which require not just submission of legal and corporate documents along with financial disclosure, but demonstration of commitment to tracking and evaluating social and environmental impact. All issuers must have a qualified third party assess, rate, or certify their impact, as well as provide annual reporting using quantitative metrics that follow the newly developed Impact Reporting and Investment Standards (IRIS).
IRIS is a project initiated by a collaborative effort between The Rockefeller Foundation, Acumen Fund, and B Lab, to create a common framework for defining and reporting the non-financial performance of impact investment capital, using an innovative new metric: Social Return on Investment (SROI). Its adoption standardizes the way organizations communicate and report about their social/environmental performance and allows investors to compare performance of individual companies to other companies within Impact Investment sectors. Those organizations and companies able to show the most impact per dollar invested (SROI) will attract the best financing opportunities. SROI adds an essential element for building the credibility of Impact Investment and is a key part of the infrastructure development required to attract big money into the field.
Another exciting Mission Markets project will create an entry point for grassroots organizations focusing on local investment in sustainable community enterprises, a vital piece of developing a diverse ecosystem of Impact Investing. Soon, grassroots organizations, like the Slow Money Alliance, which creates investment vehicles to support local, sustainable food systems and small farms, will develop portals where investors within specific localities can access investment opportunities of their region.
To date, Mission Markets has over 140 investors members and dozens of approved, investment-ready offerings worth $336 million. In rapid early development phase, Mission Markets holds the potential to play a significant role in expanding the Social and Environmental capital markets and becoming a valuable tool for accredited investors and their advisors to access Impact Investments. With any luck, as the sector matures opportunities will be bundled to reduce risk and open these exciting projects to the broader natural investing community as well.
This article originally appeared in the Spring 2011 edition of the Natural Investment News
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