Chris Nickerson (NEI Investments)

The future of investing: with respect, heart and impact

Four entrepreneurs share how they engage their stakeholders around a new idea at the 2017 RIA Conference

Innovative entrepreneurs who want to leave a social and financial impact face some unique challenges. Their idea might be too leading edge to understand. It might need a unique financing model to get off the ground, or it might not appear to conform with standard business structures or practices. As a result, it can sound expensive with excessive financial risk.

But each day, these kinds of pioneering trailblazers successfully get their message across and get people excited about the potential economic, social or environmental benefit their initiative may bring.

Four entrepreneurs shared their lessons around engaging clients, investors and stakeholders around their specific initiative at an afternoon session sponsored by NEI Investments that was held on Day Two of the 2017 RIA Conference in Vancouver.

Robert Safrata (Changequity), Trish Nixon (CoPower), Thijs Mathot (Brighter Investment), and Randall MacEwen (Ballard Power).

For Thijs Mathot, Founder and CEO of Brighter Investment, the biggest challenge is helping investors understand the opportunity his for-profit organization is creating through its unique model focused on providing post-secondary education funding for promising students in Africa.

“We all like to put things in boxes and categorize things in a way that makes sense. Investors do the same thing,” he said. “They immediately think that ‘this guy is looking for a donation,’ then they think if it’s an investment, ‘the return must be really low.’ But the economic potential of these students if they get a degree, and the return on investment potential is competitive and predictable. It is a viable business that can generate a competitive return and improve these students’ lives and build a better community for themselves.”

Trish Nixon, Chief Impact Investing Officer at CoPower, shared how she finds compelling ways to encourage investors to take proactive action. She tends to address five key psychological barriers to entry to impact investing: as an impact investment, it must be sacrificing returns; if it’s profitable and good, it must be risky; it’s probably just for angel investors and hippies; or there must be a high cost of entry so it’s just for millionaires; and while it sounds good, I’m too small to matter.

She uses clear facts to respond to each of these concerns, noting CoPower green bonds’ steady returns, listing concrete projects generating income; and explaining the sound risk mitigation strategies the firm uses. Rather than being an extremely niche product, she notes how major asset management firms are creating their own impact investing opportunities for investors both large and small.

Randall MacEwen, President and CEO of Ballard Power Systems, explained how the company has managed to be capitalize on China’s urgent need for zero emission mass transportation to meet its urban development and emission reduction goals.

“One of the things we looked at is: ‘What is the right strategy to enter the world’s largest market?’” he said. “I think these three things: friendship first, addressing the cultural issues, and having a local strategy, a local plan and a local team – these are the ways we are addressing the Chinese market and connecting with our partners there.”

Robert Safrata, CEO of Changequity, concluded the session by sharing how he’s managed to share the multi-faceted benefits of his love of “investing in dirty companies and cleaning them up.”

Transforming companies, such as Novex Courier, to becoming one of the largest and most environmentally friendly courier companies in the Lower Mainland, has brought multiple benefits environmentally, financially and culturally within the organization. Not only has it helped differentiate the company from its competition, it’s resulted in a massive reduction in emissions, increased revenue, efficiency, profitability and customer acquisition and retention.

“It just changes everything. It gets to the heart. This is the great secret we found. Pride is something we’ve been able to inject in all our businesses,” he said. “I commend to you to engage those you are working with, whether it’s your clients, so that they can be proud of what their money is doing. They can tell their kids and their friends, and you can be proud of your role in changing this earth.”