Last year, Jenny Kassan knew she’d be able to raise some money. Prior to the JOBS Act, Kassan had deployed her decades of legal experience to help companies jump through the legal hoops necessary to raise crowdsourced investment money, particularly those companies she helped as a board member of Community Ventures, a nonprofit that supports initiatives all over the world to create healthier local economies.
This was a little different, though, and not just because of the passing of the JOBS Act. Community Ventures had started a fund called Force for Good that was working to become the first crowdfunded investment fund for "Best for the World" B Corporations that also increased the number of women- and people of color-owned B Corps. Rather than raising money for individual companies, Kassan’s goal for the fund was to raise $1 million, enough to invest $100,000 in ten companies.
Big goals, right?
Kassan wasn’t worried about attracting at least a few investors. Steadfast in her belief of the power of social entrepreneurship, she knew that at least some money would come in. But because the company was offering investors a 2.5% annual return, potentially on the low side for a relatively higher risk investment, she just wasn’t sure how much.
A year later, Force For Good’s decision to raise money via crowdsourced equity investment looks like a smart one. The company raised more than their goal, pulling in a total of $1.1 million, including $400,000 through Wefunder. They’ve invested in their first three companies – Spotlight Girls, an afterschool program and summer camp designed to empower young girls, The Town Kitchen, a catering business creating jobs for inner city kids, and Community Services Unlimited, a community-based grocery store in Los Angeles – with another eight on the way.
“What we ended up offering to our investors was what some would consider a fairly risky proposition with relatively low promises in terms of returns,” Kassan said. “So we had no idea if we were going to be able to do this. We're so happy to be deploying the money, and we're so thrilled to see how many people want to support something that isn't promising outrageously high returns and is high risk, but something they just feel really, really good about."
Kassan graduated from law school more than two decades ago at a time when she felt like companies were driven either by pure profit or by a social mission. She didn’t see many in the middle.
Still, she forged ahead with social entrepreneurship, getting a job with a non-profit out of school before eventually shifting focus to the for-profit side of social enterprise. She loved the work, loved meeting CEOs and investors, loved assisting companies working toward social change. Up until two and a half years ago, though, she had a blind spot. One day, she looked around and realized all her clients were men.
Soon after, she started to explore the challenges female small business owners traditionally had raising money and has spent the last few years trying to find mission-driven women entrepreneurs.
Force For Good has allowed her to combine these two passions. The first company that the fund invested in, Spotlight Girls, is a good example. The company is run by women to help young women, had a proven business model, and had a clear expansion model. Before Force For Good, they still had trouble raising money.
“It's just a wonderful program, and she had a little trouble raising money because if you have a mission-driven company and you're a woman, a lot of times people think your business is a non-profit,” Kassan said. “(Spotlight Girls founder Lynn Johnson) did raise some money from investors, but she struggled a bit because she had to overcome that preconception like, ‘Oh, what a great lovely non-profit, here's a little $100 check for you, honey.’ She had to say, ‘No, I'm a businesswoman. I'm growing a multimillion-dollar business. I'm going to be able to pay good returns to my investors. It's a profitable business, we've been growing every year.’ I wanted to be a part of supporting her, because I love her business, and I love the way she's going to be growing her business.”
Force For Good is currently researching companies to fill their other eight investment slots. They’re picky, investing not just in B Corps – companies that commit to serving the interest of all the stakeholders that it affects – but companies that are or could be in the top 10% of those B Corps. People told Kassan these companies would be almost impossible to find, much less companies fitting that description run by women or women of color. Kassan, though, is not surprised that Force For Good is finding plenty of strong potential candidates.
“I just feel so strongly that the more this happens, the more we have these mission-driven enterprises, making money, making profits, creating jobs and doing good in the world, the better the world will be,” Kassan said. “I just am so passionate about seeing more of those grow, and if they don't have money, it’s really hard for them to do that.”
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