17 Jun Angels of Impact
Interview with Laina Raveendran Greene, Founder and CEO of Angels of Impact
Topher Wilkens introduced me to Laina at the Santa Cruz Impact Meetup. I was six weeks into launching Integrated Capital Investing and was intimidated by the circle of young, smart go-getters in the room. Laina listened to me and said, “Some of the most successful businesses I know are created by women who started their businesses later in life. They have accumulated a lot of knowledge and know the market well. Believe in yourself and follow your heart.” She gave me a boost of confidence that night and does the same for the Indigenous women-led businesses her fund supports around the world.
Jen: Why did you start your fund?
Laina: My life experiences allow me to understand the difficulty women of color face in raising funds and getting proper valuations. Back in 2006, I was forced to sell my thriving tech company in Singapore at a very low valuation, as I had difficulties raising monies to cover cash flow issues and to grow the business. This despite having purchase orders from companies as large as Cisco Systems. Then when I lived/worked in Indonesia, I realized that it was even harder for women from developing countries who run businesses, especially if they aim to make social impact through social enterprises. This funding gap is real for women of color making social impact, despite the millions flowing into “impact investing” funds, so I decided to start this fund to fill the funding gap. I see women as the key change-makers for systems change issues such as poverty, so I feel it is important to fill this funding gap.
Jen: How are your investment funds catalytic in a way that is different from other funds?
Laina: We intentionally focus on the “missing middle.” The missing middle are enterprises too small for most impact investors and too big for micro-finance. Focusing, empowering, and funding the missing middle is catalytic to ensure their survival. We are finding the “missing middle enterprises” are critical community “weavers” that are critical to a resilient fabric of their society.
The Monitor Group Report “From Blueprint to Scale”, highlights the missing middle as the “pioneer gap” that gets the least attention in terms of investing. The report states that “Philanthropic foresight, ambition and courage that will be the key to truly realizing the ‘impact’ in impact investing, by helping many more inclusive business pioneers get from blueprint to scale.”
Philanthropic dollars allow for patient capital with non-extractive or restorative funding, and this is where we use philanthropic dollars as catalytic capital. We feel this type of funding plays a role if we aim to truly address the racial wealth gap for marginalized populations at systems level as opposed to the traditional impact investing methodology which looks more at impact with returns than systems change. We also offer ancillary support such as technical assistance with funding and that’s what makes us different from other funds.
Jen: How do you describe the kind of non-financial returns the fund offers?
Laina: This is a community movement to end poverty systemically – in unity with women. We call ourselves Angels of Impact, as we see the entrepreneurs, investors, and supporters as “Angels” in this movement, not just the angel investors. Being part of a learning and support community to help end systemic poverty is a non-financial return. Our social enterprises learn from each other, investors share best practices around impact investing for social justice, and our supporters offer their services with some of the technical assistance work to social enterprises in our network. We also use the UNSDG #1No Poverty, #5 Gender Equality and #12 Responsible Production and Consumption, as the key rallying metrics of what we are trying to achieve. This helps rally the right people into this community of learning and support to build Social Capital for change.
Jen: Can you describe how you use integrated capital to do your work?
Laina: We work with donors to fund a Revolving Credit/Evergreen Impact Fund, which then allows us to offer non-extractive entrepreneur friendly funding. We currently haven’t offered grants but plan on doing this, especially given the hardship that businesses have been facing due to the COVID pandemic shutdowns. Our technical assistance services also help us with “due diligence” and in many ways you can say we do “character-based lending”. The relationships we build enable us to better understand the needs of the businesses and customize funding to meet actual needs. So far, all the loans we have given out have all been returned to the Evergreen Fund, proving that our approach works and that women are low risk.
Jen: What is transformational about the businesses that you invest in?
Laina: We not only focus on “missing middle” women led businesses, but we also ensure these businesse
s are community based. Our methodologies map out how these entrepreneurs are “weavers” of the fabric of resilient communities. Many of them are indigenous led and bring indigenous wisdom for true transformation. What this often translates into is these women help many more female micro-entrepreneurs or individuals in their communities creating a network of sustainable businesses earning a stable livelihood, thereby address poverty at a more systems level. Stable income is key to being able to plan their spending on food, health, education to name a few, so we feel these women businesses are transforming the lives of their communities. Data has shown that for every dollar a woman earns, she gives back up to 90% to her family and community, as opposed to me who gives back only up to 30%. We see women as having a multiplier transformative impact thereby being changemakers transforming their communities. Taking a quote from the Baha’i writings, “The world of humanity has two wings—one is women and the other men. Not until both wings are equally developed can the bird fly.”
Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?
Laina: We have a very clear focus on BIPOC female entrepreneurs as a start (racial justice and gender justice). We ensure that the benefits accrued to them are shared with their communities (income inequality) and the terms of investing are worked through to ensure they help build wealth for the entrepreneur and their communities. Even in terms of metrics of success we design those with the community to respect their lived experience.
We aim to do restorative Investing which fills the space between philanthropy and traditional impact investing. It is a way of deploying capital with and to marginalized communities to address justice, equity, diversity, and inclusion (JEDI). It also supports the work of Nwamaka Agbo’s vision of Restorative Economics, “It is time to dream bigger and build an economy that heals the harm and restores those communities creating a more just and prosperous country.”
Jen: What does a foundation or investor need to understand in order to invest in transformational businesses?
Laina: Foundations and investors need to give value to lived experience and fund these businesses through BIPOC intermediaries. They also need to redefine how they use terms filled with bias such as “pipeline” or “risk”. BIPOC led funds/intermediaries have a better chance of designing the fund to meet racial justice and income inequality and succeed in transforming these communities. Funders need to stop seeing BIPOC as mere beneficiaries and see them as leaders, change agents, fund managers for more lasting and effective systems change.
Jen: What do you tell people who think your fund is risky?
Laina: Our approach is a risk mitigator to the application of funding to change. The last 5 years of action has a 100% repayment of loans given out. It validates the Angle of Impact’s empowering investment thesis. This may change with the effects of the pandemic, but can be overcome with long term, affordable and long-term investments and diversity of industry segments–women are good investments as they repay and they are capital efficient.
Investment Thesis/What is your rationale for your approach to investing? We aim to end systemic poverty through restorative investing in women and indigenous led community based enterprises, which are too large for micro-finance and too small for impact investors (missing middle).
Geography: Asia Pacific (with presence in Singapore, US and NZ)
Raising: $1.5 M
What’s on Laina’s Mind?
Book: Winner Takes All (Anand Giridharadas), Decolonizing Wealth (Edgar Villeneuva), Creating a World Without Poverty (Mohammed Yunus)
Song: I have a Dream (ABBA)
Podcast/Film: Skater-Girl, Whalerider, Gandhi.