Nancy Pfund, Managing Partner, DBL Funds
Please give us a bit of background on yourself, and how your organization plays a leadership role in the impact investing space.
I worked at Hambrecht & Quist (which became JP Morgan) for over 20 years as a partner in venture capital and also led the firm's public policy and philanthropic affairs. This dual responsibility prepared me well for the creation of the Bay Area Equity Fund, which was the first double bottom line venture capital fund of size to drive for market rate returns. In 2008, I spun out from JP Morgan in order to create the first impact venture capital firm, DBL Investors, now DBL Partners. DBL has pioneered in creating strong financial returns, iconic companies, and significant social and environmental impact. This track record, together with its commitment to metrics and advocacy, has led to DBL becoming a leading voice in the impact investing movement.
How well are companies adapting to the mainstreaming of purpose-driven finance? What ways is impact investing making headway, and where is it lagging?
I raised the first fund in 2002-2003, a time when only banks and foundation PRI investors were at the table. Since then, impact VC has grown to attract a broad range of LPs, including HNW individuals and family foundations, public and private pension funds, foundations and endowments, corporations and foreign investors. Today, the field as a whole is attracting more capital from an ever broadening array of investors, and millennials are poised to enhance this trend as a vast generational wealth transfer takes place over the next decade. At the same time, today's entrepreneurs are all in for impact in a way that didn't exist ten years ago. They want to build great companies and change the world for the better at the same time.
Where more progress needs to be made is to scale the field by increasing capacity (the number of firms devoted to an impact practice), and bring in larger and more traditional funders, such as sovereign wealth funds, insurance companies and older, more conservative mega-family offices. The field also needs to demonstrate that it can measure the impact it is having in order to build authenticity and trust among the participants. Finally, the field needs more visible "wins" so as to break down biases that some people still have relating to mixing mission with money.
What challenges do you see for the future of purpose-driven finance?
A huge number of business school students across the world have a passion to work in impact investing, and we need to grow the field fast so that they can obtain jobs and build impact careers! The industry also needs to continue to work on diversifying the fund manager pool.
What will you be discussing at The Economist's Impact Investing event in New York on February 15?
New areas for impact venture investment, such as food and agriculture, energy storage, and energy access in the developing world. I will also describe the impact journey DBL has been on over the past 13 years.
To learn more about the Impact Investing event, click here.