Entries For: May 2007
2007-05-24
Investor's Circle. Day 2
4:00 pm Media Panel
James Lincoln moderates a panel made up of Steven Piersanti of BK media and Juan Martinez of the Knight Foundation.
Lincoln puts up a PowerPoint outlining the double bottom line criteria of his investing. they don’t invest in the big media; they look for minority and community media with a social mission they can trust, and economic growth opportunity.
Panel perspectives on investing in the media.
Juan Martinez, CFO and treasurer of the Knight Foundation. The Knight brothers made their fortune in newspapers in communities nationwide. The foundation today follows their principles of quality and honesty, community development. The Knight Brothers look to journalism to build communities and bring them together. Talks about the Digital Challenge, a grant competition to open the doors to new ideas to use digital communications to bring communities together.
The foundation supports non profits and for profits to generate new ideas and impact. The view grant making as a investment portfolio with risk return tradeoffs and early and latter stage investments. For grant requests, they examine them for impact on Knight’s strategic goals, the management strength of the management. Investment in commercial ventures must meet these requires plus show social impacts and positive commercial .returns.
Steven Piersanti of BK publishing talks about book publishing, a little industry with a big impact. The US industry is only $30 -$50 billion with low barriers to entry and is highly disaggregated and is subject to fierce competition. So why invest?
Profits can stream for many years. If a book works, it sells year after year, after year. And the company can sell rights deals to the same property, which enables ta book to serve as an annuity that generates revenue without new costs.
But many investors are looking for faster returns and the ability to sell the company for a capital gain. Unfortunately, publishers are often privately held and their assets are book titles, which are intangible assets, which are hard for traditional investors to work with. Traditional investors want to be able to invest in firms with tangible assets that can go to the bottom line. Some firms now operate, like the Literary Ventures Fund, have set up investment vehicles that are tuned to book publishers.
Investor's Circle. Day 2
Breakout 1, continued
Nth Power
Matt Jones of Nth Power, a clean energy investor, which has $400 million under management and invests in sustainable energy technology companies. His slide show says that there are several drivers behind investment in clean energy: energy cost changes in the global energy markets, “market pull” for new technologies and customers who insist on clean power. He points to a recent report that this is a global market – 600 million people in India are off the grid and the power supply in that country is 20% below demand.
The cleantech energy market is varied with opportunities ranging from solar to biofuels to wind to other technologies. There is now $2.5 billion a year and rising invested in clean tech energy, 37% in biofuels, 24% in distributed energy and 20% in energy intelligence systems – technologies that make energy use more efficient. We are now seeing a convergence of many sciences and investment sources to change our energy use habits.
Currently 51% of US energy use is coal which produces 80% of the carbon, The investment opportunities are equally strong in industrial, residential and commercial use, especially in conservation and new energy efficient designs and retro-fitting.
Matt Jones of Nth Power, a clean energy investor, which has $400 million under management and invests in sustainable energy technology companies. His slide show says that there are several drivers behind investment in clean energy: energy cost changes in the global energy markets, “market pull” for new technologies and customers who insist on clean power. He points to a recent report that this is a global market – 600 million people in India are off the grid and the power supply in that country is 20% below demand.
The cleantech energy market is varied with opportunities ranging from solar to biofuels to wind to other technologies. There is now $2.5 billion a year and rising invested in clean tech energy, 37% in biofuels, 24% in distributed energy and 20% in energy intelligence systems – technologies that make energy use more efficient. We are now seeing a convergence of many sciences and investment sources to change our energy use habits.
Currently 51% of US energy use is coal which produces 80% of the carbon, The investment opportunities are equally strong in industrial, residential and commercial use, especially in conservation and new energy efficient designs and retro-fitting.
Investor's Circle. Day 2
Breakout sessions
I attended the CleanTech breakout session looking at investment potential for solar, wind, and other new power sources.
City of Los Angeles
Our first speaker is the Deputy mayor of the City of Los Angeles, Nancy Sutley. LA is the nation’s largest utility and one of the world’s largest supplier of water and power. She ran down the response of the city to state legislation and the demand for alternative energy. the city intends to divest itself of coal-fired power and make the power mix of the city 30% new energy, spending almost $2 billion dollars to reach that goal.
Verdant Power.
Matt Klein of Verdant Power, Inc. which makes submerged electricity turbines. He showed us photos of the East River turbine field, across from the UN. The turbines operate underwater and generate power that is sold locally. The turbines have minimal or no environmental impact and work with the flow of the river. He described his firms capitalization and capital needs to expand. His PowerPoint feature photos of installations and sites in the US, the UK and Canada.
City of Los Angeles
Our first speaker is the Deputy mayor of the City of Los Angeles, Nancy Sutley. LA is the nation’s largest utility and one of the world’s largest supplier of water and power. She ran down the response of the city to state legislation and the demand for alternative energy. the city intends to divest itself of coal-fired power and make the power mix of the city 30% new energy, spending almost $2 billion dollars to reach that goal.
Verdant Power.
Matt Klein of Verdant Power, Inc. which makes submerged electricity turbines. He showed us photos of the East River turbine field, across from the UN. The turbines operate underwater and generate power that is sold locally. The turbines have minimal or no environmental impact and work with the flow of the river. He described his firms capitalization and capital needs to expand. His PowerPoint feature photos of installations and sites in the US, the UK and Canada.
Investor's Circle. Day 2
Phil Angelides
11:15 Mark Finser of RSF introduces former California State Treasurer Phil Angelides. Angelides is known nation wide for changing the way government funds are invested, using them to create a better quality of life as well as a better ROI.
Angelides : in the pst 7 years we have seen a sea change in our idea of the role of capital. We now consider the impact as well as the returns of capital – wall between fiduciary responsibility and social responsibility.
o money can be invested profitably while building a sustainable future
o capital can reshape the global economy and society
o you can’t have a strong economy if you destroy the environment and democracy
o a strong society is the basis of a strong economy
o today the flow of trillions at the behest of very people shape society
o in the last decade the growth of assets in SE investments has outpaced growth in other assets
o we have a new wave of progressive business leadership
While in office, the pension fund he ran set:
o set environmental standards
o set labor standards, including stopping the use of child labor abroad
o the green wave initiative of $1.25 billion in environmental technology
o set a goal to reduce energy usein our real estae
o established the double-bottom line initiative to rebuild poor communities - $5 billion over 5 years which led to 20% ROI
o put deposits in local banks and minority banks
o dumped tobacco stock and shifted funds to better investments
o disinvested in Sudan
This led to record returns, 16%. So what is next for the fund?
Angelides shows us a slide show on global warming and the link between carbon emissions and shifts in investment. I will try to obtain it and post it.
"In our role as investors (he is currently in the private investment realm) he worries about the shift of our power in our society to money, as evidenced in the disparity between executive and worker salaries, and the growth of power in the legal entity of the corporation. "
Angelides : in the pst 7 years we have seen a sea change in our idea of the role of capital. We now consider the impact as well as the returns of capital – wall between fiduciary responsibility and social responsibility.
o money can be invested profitably while building a sustainable future
o capital can reshape the global economy and society
o you can’t have a strong economy if you destroy the environment and democracy
o a strong society is the basis of a strong economy
o today the flow of trillions at the behest of very people shape society
o in the last decade the growth of assets in SE investments has outpaced growth in other assets
o we have a new wave of progressive business leadership
While in office, the pension fund he ran set:
o set environmental standards
o set labor standards, including stopping the use of child labor abroad
o the green wave initiative of $1.25 billion in environmental technology
o set a goal to reduce energy usein our real estae
o established the double-bottom line initiative to rebuild poor communities - $5 billion over 5 years which led to 20% ROI
o put deposits in local banks and minority banks
o dumped tobacco stock and shifted funds to better investments
o disinvested in Sudan
This led to record returns, 16%. So what is next for the fund?
Angelides shows us a slide show on global warming and the link between carbon emissions and shifts in investment. I will try to obtain it and post it.
"In our role as investors (he is currently in the private investment realm) he worries about the shift of our power in our society to money, as evidenced in the disparity between executive and worker salaries, and the growth of power in the legal entity of the corporation. "
Investor's Circle. Day 2
Panel Continued
Peter Kinder. We need to understand modern portfolio theory, which is the drive to maximize returns, is embedded in our market processes. He asks each of the panelists abut this.
John Fullerton responds. The assumptions behind MPT are that you invest to max returns, and you diversify your investments to reduce risk and increase returns. The problem is that the ways we measure risks and return ignores non-monetary risks – like global warming.
Leslie responds. It is not a given that we will see continued returns. And we have to recognize that risk is not an equation, it is people’s lives. This changes the whole view. But it is heresy to point this out to investors, like pension fund managers.
Questions. An audience member asks about the limits on growth and resources and asks how can deal with this in today’s religion of make more money.
Joe responds. We need to decide how much is enough.
Conclusions: We need to address the disparities of wealth, the value of the future, and the limits on resources and growth.
John Fullerton responds. The assumptions behind MPT are that you invest to max returns, and you diversify your investments to reduce risk and increase returns. The problem is that the ways we measure risks and return ignores non-monetary risks – like global warming.
Leslie responds. It is not a given that we will see continued returns. And we have to recognize that risk is not an equation, it is people’s lives. This changes the whole view. But it is heresy to point this out to investors, like pension fund managers.
Questions. An audience member asks about the limits on growth and resources and asks how can deal with this in today’s religion of make more money.
Joe responds. We need to decide how much is enough.
Conclusions: We need to address the disparities of wealth, the value of the future, and the limits on resources and growth.
Investor's Circle. Day 2
John Fullerton
John Fullerton. The purpose of capital is to sustain life. He says he has been wrestling with the question for years. As a finance guy from Wall Street, he believed strongly in what he was doing, but now realizes he was naïve. He is now trying to reconcile the invisible hand and the golden rule. He is intrigued with social purpose companies, but is realistic about how much impact they have. He was influenced by Herman Daly’s books that point out that there is a conflict between finite resources and an economic system based on infinite growth. He feels that we have to now optimize sustainability in our investments, some of which will give us great returns. Forests grow at a rate unrelated to the Dow- we have to recognize that sustainability of the earth ultimately dictates financial returns.
Investor's Circle. Day 2
Joe Solomon
Joe Solomon. He points out that there is only a couple of billion dollars represented in the room, so we can be honest and friendly. When he and his team began in British Columbia 15 years ago, they looked at what had been built with the use of capital, and how to get back to the full purpose of capital – to do good in the world and use the life force in capital to plant seeds and be ancestors to those who will try to shift the world to a positive track over the next 500 years. He notes that maximum returns has become a virtual religion in the world; he feels the purpose of capital is to change this.
Investor's Circle. Day 2
Leslie Christian
Leslie Christian. Her quick answer is immediate equitable redistribution of wealth. She admits that this sounds great, but is very challenging. This concept has affected her work. When she started Upstream 21 and the Women’s Equity Fund, she realized that it is not right that businesses exist to serve the interests of shareholders. She likens this to absentee landlords who sit back and expect laborers to send them the proceeds of their work. She believes that there is a place for capital, but that people are “way more important than people”. When she created her investment vehicle to create a decent living for people, she decided to write a corporate charter that made it clear what their purpose was – require that all corporate decisions be made with the best interests of a variety of stakeholders – the workers, the community, customers, suppliers, shareholders. She notes that this is perfectly legal – it is even in the law in 35 states. She created an operating holding company that bought companies that want to grow but not be alone. She requires firms she invests in meet their corporate requirements.
Investor's Circle. Day 2
9:10. We are called to order by Jay Coen Gilbert who shows us “A growing green economy” a film by Hazel Henderson about using patient capital to create a healthy food supply. After the film, which features several IC members and officers, the lights go on and the panel has been seated: Leslie Christian, President of Progressive and Portfolio 21; Joe Solomon of Renewal Partners and President of the Endswell Foundation of the UK; John Fullerton, co-founder of Alerian Capital; Peter Kinder, President of KLD Research and Analytics. After some housekeeping, Jay introduces the topic – “What if the purpose of capital?” after noting that of the $2 trillion + in invested social responsible capital in the US, only a few billion are in social enterprises - not nearly enough.
Investor's Circle. Day 2
8:30. The Program today
We are in the same room today, but it has been re-oriented so there is a now a table for a panel as well as a screen. The room is a bit less fullthan yesterday, but there are a few new faces. Breakfast was plain ole' bacon and egss - nothing organic or local (Suzanne sid they would work with the hotel next year to change that). As yesterday, young people slightly outnumber graybeards and women slightly outnumber men. Lively conversations animate the tables as we wait to called to order.
2007-05-23
Investors Circle
2:45 p.m. Entac Emulsion
2:45 p.m. Presentation by the Entac Emulsion. David Howe introduces his firms proprietary emulsion products, made from other industries’ wastes, that are used in the place of water and toxic chemicals to eliminate oil leaching, toxic dust, mine fires and other industrial uses that generate dust, tailings and other pollutants. Widespread use of their products would eliminate millions of gallons of water use and major pollution problems. The business now has major industrial partners and is seeking expansion capital.
Investors Circle
2:35. Common Ground Recycling.
2:35. Presentation by the Common Ground Recycling Company. John Mickowski, CEO describes the company that makes patented energy saving tire recycling for high quality used rubber products. The company has developed and patented a process that eliminates the problems that have plagued other attempts to recycle tires. The process will help reduce energy consumption, landfills, pollution, and fire hazards and provide a feedstock of high quality recycled rubber for new products.
Investors Circle
Cardinal Resources, LLC. Kevin Jones, CEO
2:25 p.m. Presentation by the Cardinal Resources, LLC. Kevin Jones, CEO 20% of the world’s population lives without clean water. This impacts developing and developed countries. they have developed a solar-powered system that can provide clean water to small communities in develop0ed or developing countries. the Redbird system is a complete drinking water system that fits in a single container, is easily transported, requires no infrastructure, and runs on solar power, and produces water and a very low cost. They are ready to scale up from their current successful business.
Investors Circle
2:20 p.m. David Kirkpatrick: IC Member talking about the Energy and Environment Track.
2:20 p.m. David Kirkpatrick, IC Member talking about the Energy and Environment Track Cleantech and clean energy is a rapidly growing area with many companies in energy, water, and other aspects of this area. David introduces presenter companies.
Investors Circle
2:15. Liferocks, Inc.
2:15. Presentation by the Liferocks, Inc. Jennifer Chapin describes Liferocks, a game developer and publisher that targets the convergence of entertainment, education and online communications. They convert best-selling self-improvement books for adults into interactive games and is now exploring developing children’s games that are positive and entertaining.
Investors Circle
2 p.m. Kompolt Online Auction Agency
2 p.m. Presentation by the Kompolt Online Auction Agency. Kompolt has been in business for several years helping NPOs by running online charity auctions and cause marketing campaigns for companies. They have run auctions for Jay Leno, Warren Buffet, and others. This is a growing area for NPOs and companies and Kompolt is seeking expansion capital to take advantage of growth opportunities.
Investors Circle
1:50 p.m. Addie Swartz, B’tween Productions/Beacon Street Girls
1:50 p.m. Presentation by the Addie Swartz, B’tween Productions/Beacon Street Girls. Addie, founder and President describes the problem that young girls in the US today are besieged with media messages that are sexualized, negative and predatory. She launched a company. B'tween Productions, producing books, merchandise and online media to counter these influences, substituting positive images and influences for negative one. She describes the market her company operatesin as girls btween 10 and 14, and the her new online community, Beacon Street Girls which gives girls a safe and positive environment to socialize and create in. B’tween Productions is a profitable and growing company and is seeking growth capital.
Investors Circle
1:50 Media investments
1:50 Media investments. Juan Martinez from the Knight Foundation welcomes us back from lunch and outlines the three companies that will present their media businesses for investors to consider.
Investors Circle
11:35 Scholar Centric.
11:35 Presentation by the Scholar Centric. Steve Weigler of Scholar Centric Company tells us that 33% of all American students drop out of high school. Scholar Centric has been working to turn this around by producing and selling middle school programs, developed and piloted over 15 years, that have demonstrated solid retention and attendance rate increases. He showed us a new proprietary teacher-driven drop-out prevention program now on the market. He describes his firm's experienced national sales force. The firm is looking for funds to expand the sales staff and product line to reach grammar and high schools.
Investors Circle
11:30 Mission Research
11:30 a.m. Presentation by the Mission Research. Charlie Crystle is CEO of this mass market software firm aimed at small and underserved firms and organizations. The company is a triple bottom line firm and work with many non-profits. Their customers do not have sophisticated staff and want software that just “works” with no fuss and crashes. Charlie demonstrates software for NPOs that tracks donors, sends letters, and other tasks simply and quickly. Part of his mission is to help NPOs raise money more quickly and easily. He describes his current products and new ones coming out and investment opportunities.
