Intro 3:36
You’re listening to Millennial Investing by The Investor’s Podcast Network, where your host Robert Leonard interviews successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

Robert Leonard 3:58
Hey, everyone, as I said in the intro, I wanted to spend some time here at the beginning of the episode to do some Q&A answer questions from the audience that I get from you guys, whether it be in our Facebook group, to me directly on Instagram, or even via email. I want to take some time to answer those questions here at the beginning. Then we’ll bring Carrie into the show.

The first question I’ve been getting a lot and the most frequent asker was from James Ripian. James, apologies if I didn’t pronounce your name correctly, but your question was, “What is your allocation to Bitcoin?”

For me, I had no allocation to Bitcoin for a long time. Kind of my background was back in 2017, when it was about $1000 or $12,00 a coin. I bought one Bitcoin and being a Warren Buffett investor, it just didn’t sit well with me.

He talks about understanding what you’re investing in. Really, truly understanding the business model and things of that nature like the investment thesis. For me, I didn’t understand it so I kind of felt sick. I didn’t sleep well at night.

I know a lot of experts will say you need to be able to sleep well at night with your investments. For me, I just did not sleep well owning Bitcoin. I actually sold it the next day. I did make a small profit. This was part of the bull run of 2017 that we saw. I didn’t make a small profit, but if you follow Bitcoin at all, you know that it went from that level of say, $1000 to $1200 to $17,000, then $20,000. I left a lot of money on the table but for me, I just didn’t understand that at the time.

Now if we fast forward to 2020, so three years later, through this podcast, The Millennial Investing Podcast, I’ve been lucky to speak with some of the best minds in crypto, specifically with Anthony Pompliano, better known as Pomp. I also talked with Preston Pysh.

I’ve been able to have multiple conversations with these guys and they’ve been able to explain it to me. I feel a lot better about it and I understand it a lot better than I did before. I’m not still fully 100% sold on it so I’m not putting 100% of my portfolio or even a big percentage of it. Though I do understand the thesis behind it. I agree with it partially.

For me, I’m allocating 1% of my portfolio to it. The reason for that is that I want to at least have some exposure, because if it continues to rise to what these guys think it’s going to, and I’m not involved, I’ll be upset with myself for not having at least allocated a little bit of my portfolio. With only a 1% allocation, if it goes to zero, I won’t be that upset. I mean, it will stink and nobody wants to lose money, right?

However, if I lose 1%, that’s okay. I can stomach that loss. Also, there’s an asymmetric risk return here. If Pomp and Preston are right, then all I need is 1% of my portfolio allocated to it, because then it will significantly outperform everything else, even at a 1% allocation. For me, I’m comfortable with just 1% of my portfolio allocated to it.

The other piece of this is that Preston, for the longest time, was a sole value investor. Through and through, he was a value investor, Warren Buffett style. The first podcast I ever listened to was We Study Billionaires with Preston and Stig. And so, I trusted, believed and looked up to Preston a lot.

To see somebody who has the background, training and intelligence that Preston has, and the understanding of value investing and how long he studied it to be able to convert to Bitcoin, that tells me there’s probably some validity to it. I’m not listening to just some guy on the internet that I don’t know their background or anything like that.

I know what Preston has studied and I know how much time he’s put into it. I know how much he is a Warren Buffett follower through and through. And so, to see him support this, I think, for me, personally, I need to have at least a little bit of allocation to it.

With this, I decided back in March, after talking to Preston and Pomp that I would allocate 1% of my portfolio to it. I think my price is about $4000 or $4200 or so, around there per coin. I allocated 1% of my portfolio.

Today, it probably makes up 8% to 10% of my portfolio but that’s not because I added more to this position. It’s because if you look at the price today of Bitcoin, and I’m recording this on November 24, 2020, it’s about $19,000. Going from $4000 to $19,000, that’s almost a 5x. As that increases, it’s going to take up a bigger percentage of my portfolio.

I haven’t allocated anything additional to Bitcoin. I still started with that 1% position and it’s just grown a little bit more as a percentage of my portfolio because it’s outpaced a lot of my other investments. However, I’m not allocating anything more than that initial 1% for now.

That could change in the future but for now, that is my allocation to Bitcoin. James, thanks so much for the great question.

The next question I wanted to talk about was from Adam Hayes on Instagram. He asked, “What are your thoughts on the Motley Fool for stock picks?”

So my opinion on the Motley Fool is I think they are fantastic. I listened to all of their podcasts. I read a lot of their articles. I’ve gotten a lot of my investing from them.

Like I said in my last answer to the question about Bitcoin was that We Study Billionaires is the first podcast I ever listened to. That was because I’m a value investor, Warren Buffett style investor. That’s what kind of got me into that show.

From there, I started to add a little bit of growth investing to my portfolio. I did that from the Motley Fool. The more I listened to these guys, I really enjoyed their investing philosophy. I think they have really grounded and well thought out investment thesis.

For me, I really enjoy their content a lot. I think they have great ideas and I don’t necessarily invest in everything that they recommend. So you ask about stock picks, I don’t necessarily go out and buy just everything that they recommend. I don’t recommend you doing that with anybody, myself included, or any stock picking service. Though I think that they can help you get really good ideas.

One of the big ideas that I got was from Jason Moser, this basket approach. I created a basket a FinTech basket, or he calls it the war on cash basket. I really do believe in that mission, that goal or that thesis behind the trend away from cash. I have a big percentage of my portfolio allocated to this war on cash baskets.

All that means is you buy a couple different stocks that could do well if this trend plays out. Rather than saying, PayPal is the clear winner and they’re going to be the only company that does well, if cash goes away, you’re basically saying, Okay, there’s three to five different companies that could do well, if this trend away from cash continues.”

You then buy all three to five companies and you create your own little basket of stocks, if you will. That’s what I’ve done, specifically for the war on cash. That’s just one of the ideas that I’ve gotten from the Motley Fool team. I think they have a lot of really good ideas.

I wouldn’t follow them blindly as I wouldn’t with anybody but I do think they have a lot of really good content that they put out. I think they come out with a lot of really good ideas.

A similar question to this was asked from a listener and he said, “How do you suggest I educate myself more on picking grow stocks, any book suggestions?”

I wanted to include this here with the Motley Fool question because I think they kind of go hand in hand. I’ve learned a lot of my growth investing from listening to the Motley Fool so that would be my recommendation is listen to the Motley Fool podcast. Read their content and connect with some of the hosts of those shows on Twitter and Instagram, wherever you want to follow them.

For book recommendations, I don’t really have any great book recommendations for a growth style investing. What I can recommend is to listen to Episode 15 on this podcast, that was with Jason Moser, or Episode 40 that was with Simon Erickson.

Simon, specifically, is one of my favorite growth investors. Jason may not be considered a growth investor, but he does talk about a lot of growth ideas. Those two episodes are great. I would highly recommend going to follow Simon on Twitter and Jason and listen to all the stuff that they put out and all their investment ideas. I think they’re a great resource and great value for learning and picking more growth stocks.

Thank you both for those questions.

The third and final question I want to answer on today’s episode, and like I said, I’ll do more of these in future episodes. If you guys like it, be sure to let me know on Twitter or Instagram. Let me know if you’d like me adding these Q&A sections to the beginning of the episodes and I will do more of them.

This last question came from Tanner Pike. He asked, “What’s the downside, if any of investing in just VTSAX versus individual companies?”

When I was asked this question, I had to stop and think for a little because I was like what are the downsides of VTSAX? Honestly, it’s kind of hard to come up with the downsides of it versus individual companies.

There are a lot of benefits: low cost, great diversification, and historically, it’s provided great returns. We expect it will continue to provide great returns.

What then are the downsides of VTS ax versus individual companies? I guess the only thing that I could really think of was that there is a lack of control and a lack of potential returns.

Let’s talk about the lack of control. With VTSAX, you don’t really have a say in what the fund or ETF or mutual fund owns. You’re buying the underlying assets. That can be a great thing and that can be a very easy low cost way to diversify for a lot of investors, but that could be considered a downside is that you don’t have control over those investments.

A big one lately has been whether Tesla was going to be included in the S&P 500. For me, personally, I’ve never invested in Tesla, because I want to stay away from that.

I am a big investor in an S&P 500 ETF. Now, because I don’t control that ETF, I have no say in whether I’m going to own some of Tesla. Just by owning the S&P 500 fund, I’m going to own some of Tesla, if it does continue to go through and actually make it into the S&P 500.

The same thing with VTSAX is if you don’t want to own certain companies that are in there, you don’t have the control to change that. You’re buying the fund in total.

Then the second piece is you might have potentially lower returns. There’s a lot of research and a lot of arguments that say individual stock pickers can outperform the market and broad funds like VTSAX will outperform. If you go back and listen to the episode with JL Collins, he’s very confident that he thinks the VTSAX will outperform individual stock pickers.

That said, I think you are potentially leaving some returns on the table. I think people can beat the market. I personally believe that you can pick the market by picking individual companies if you do the research and put in the time and the due diligence.

I think it’s possible to earn outsized returns or market beating returns with individual companies. You could argue that the downside of VTSAX is that you just earned the market and you’re not going to be able to outperform the market.

Now that is a very big task to undertake. I’m not saying that beating the market is going to be easy, and most people won’t do it. However, I think there are people that can and so the downside would be that there’s no chance for you to outperform the market with just VTSAX.

Alright, so that’s it for the Q&A on this episode. I hope you guys enjoyed those three questions. Like I said, please let me know if you enjoyed it. I’d love to hear your feedback and I will do more of it, if you guys enjoy it. If you don’t enjoy it, I can stop doing it as well. I just want make sure I’m putting out the content that you guys like.

Now let’s bring Carrie Rich into the show. Carrie, welcome to the show.

Carrie Rich 15:28
Great to be here. Thanks for having me.

Robert Leonard 15:30
Let’s start the show by talking a bit about you. Tell us your story and how you got to where you are today.

Carrie Rich 15:36
I started as an intern, as many people start, in health care organizations and in the hospital system. I got the worst jobs on the totem pole. I mopped the floor. I pushed the snack cart. I folded baby clothes in the maternity ward, kind of all the lowest rung jobs and one of my jobs was to take attendance.

Then who should walk into this meeting where I was taking attendance, but the CEO of this multibillion dollar hospital system. I had done some homework about him and learned that while he had been growing this very big healthcare organization, he had simultaneously been building the health infrastructure in Haiti.

To me, that was just eye opening. As someone I really wanted to learn from he clearly lived a life of purpose and wanted to build a legacy that was meaningful. He was someone I wanted to learn from.

I then asked him for a meeting on living a life of purpose. From that meeting, we started writing together a project about health care and sustainability. The reason I personally got into health care was because at the time I was in school, you couldn’t study social entrepreneurship. That wasn’t a topic to be able to study. And so, I figured healthcare was the closest thing to it.

Healthcare was the business of helping people and a business of doing good. I ended up working, going from an intern to working for the CEO. It was a dream job opportunity. He mentored me and did all the things you would hope a boss would do in terms of sponsorship, coaching and helping me grow.

As a result, my career progressed a lot more quickly than it would have had he not been mentoring me. I said to him one day, “Wouldn’t it be great if we could find other young people like me, who have strong work ethic and moral compass and share them with people like you who have a real commitment to mentoring and have a lot of success in their careers and pair those two groups together as a catalyst for social good, I wonder what would happen?”

That’s how the Global Good Fund was born eight years ago.

Robert Leonard 17:29
Our main topic of today’s show is going to be impact investing. That’s something I don’t really know a lot about so I’m excited to learn more about it with you throughout today’s episode.

Start off by explaining to us what impact investing is and for those who may not know.

Carrie Rich 17:47
Traditional investing would mean taking money and putting it in companies where you think you can maximize your financial returns. Philanthropy would be donating to nonprofit organizations where you can maximize your social impact.

So impact investing would be the intersection of those two investments: investing in for profit companies, where you can both create financial returns, and also create social impact returns.

If a company has great social impact returns, but not great financial terms, we’re not interested. That’s not going to be a great return for investors. Similarly, if there’s a company that has great financial returns, but doesn’t deliver social impact, that also wouldn’t be a great impact investment.

Impact investing is the intersection of doing well financially while doing good with social impact.

Robert Leonard 18:36
So we’re not looking at companies like big tobacco or probably oil companies or things like that? Could you give some examples of companies that might fit this mold of impact investing?

Carrie Rich 18:45
Huge companies that really at this point, don’t require our investment. But as an example, Patagonia would be an example of a company that would be a great impact investment. They’re financially profitable and they stand for social impact and environmental stewardship.

Robert Leonard 19:02
For those who aren’t familiar with Patagonia, what do they do that makes them a socially focused enterprise?

Carrie Rich 19:09
Thanks for the follow up question.

Patagonia is a retail outfitter for outdoor clothing and apparel. They create sustainable environmentally sustainable apparel. They suggest that you don’t actually keep buying new clothes every season, and actually keep wearing the clothes that you have.

The way they run their business is certified to be ethical. The way they pay their employees, the governance, everything about how they run their company, looks at it from a stewardship standpoint, socially and environmentally.

Robert Leonard 19:44
There’s been an increasing focus on socially responsible investing or ESG investing, which just stands for environmental, social and governance, which is where investors are increasingly focused on non financial factors that you’ve been talking about when they’re making their investment decisions. How is impact investing different or how is it similar to socially responsible investing?

Carrie Rich 20:06
ESG criteria are a popular way for investors to consider companies that they might want to invest in. Mutual funds brokerage firms now even robo advisors offer products that employ ESG criteria.

For me, one of the big differentiators between ESG and impact investing is that ESG criteria can help investors avoid companies that could pose financial risk due to environmental or other practices.

Most of the time, and many times, ESG criteria is used to avoid companies. Whereas impact investing is used to intentionally invest in companies that create social good.

I personally think ESG investing taken to a next level from what we’re seeing now, if it was taken up a few notches, could be even more intentional about investing in companies that do good for the world, rather than just avoiding other companies that don’t practice social or environmental stewardship. Impact investing takes those morals to that next level.

Robert Leonard 21:05
There are a lot of companies that investors invest in and they’re not really so much focused on the social side of things. They still have a hard time making adequate returns.

With your number one priority being to make money for your investors, how do your investors actually make money when investing in an impact fund, which is investing in companies that aren’t even focused on so much as just profits?

Carrie Rich 21:27
Great question. There are all different ways to do impact investing. I’ll start there and say our fund in particular focuses as the number one priority on making market leading returns for our investors. That would mean that you would make the same returns whether you invested in traditional venture capital funds, as compared to the returns we aim to generate in this impact fund.

The way our investors win is three ways when the company exits.

When the companies we invest in have an exit, meaning they’re sold or acquired by another company, and therefore the cash comes back to the company and our investors; when the companies that we invest in IPO or go public; when there’s another major liquidity event, meaning the next round of investors come in and put money into the company such that our original investors, in this case us, would get repaid.

Those are the three ways three examples of how our investors would win financially and create market leading returns from impact investments.

Robert Leonard 22:27
Understandably, it varies, but in general, what types of returns to investors see when investing in a VC impact fund like yours?

Carrie Rich 22:36
We have been running a small impact fund for the last four years. It’s a bit too early to tell because we haven’t had exits yet. We’re in three and a half years, I should say. We haven’t had an exit yet, but what we are seeing are trajectories that are similar or the same as what you’d see in traditional VC funds.

What we’re aiming for is a 3.5 x net return, which means that for every $1 you put in, you get $3.5 back. We’re aiming for the exact same type of market returns that you’d get from a traditional VC fund.

However, in our case, you’d be investing in social impact companies that are led by people of color and women and generate all kinds of social impacts.

Robert Leonard 23:18
Are you able to give some examples of the types of companies that your impact VC fund is investing in? What types of social impacts are they making on the world?

Carrie Rich 23:27
A few examples of the companies we are invested in. One is called Manage Mindfully, which teaches mindfulness to kids. During COVID, they’ve pivoted to be available online to both teachers and students and are currently providing mindfulness training to 1 million students across the country.

Another example is the Jackfruit Company. That’s a meat substitute product made from jackfruit. They are available in Costco, Walmart, Whole Foods, Trader Joe’s, True Foods restaurant chain across the country. They are supporting 1000 farmers right now in providing jackfruit. 10% to 40% of these farming families income comes from this jackfruit product through the Jackfruit Company and they’re about to double the number of farming families that can create those kinds of annual income.

A third example is called Esusu, which is a company that provides credit scores for people who are poor. So people who are poor, they have a really hard time creating a credit score. About 45 million people in America don’t have a credit score and about 150 million people in America are credit insecure, which means there they don’t have great credit scores.

What Esusu does is partners with landlords to make sure that people who are paying their rent get credit for doing that. They can establish a credit score by paying their rent, so it’s a win-win all around.

So far, 200,000 tenants are currently using Esusu. 100% of those tenants now have credit scores and their credit scores since using Esusu have increased 20 to 100 points per person.

You can see that for low income people across America, this is a major win. They’re now able to borrow money from the bank to pay for continuing education and to eventually buy a home. It’s creating equity in a population that previously didn’t have it.

These are some of the returns that we can generate from their social impact returns. All three of these companies that have just been described are also creating great financial returns for investors.

Robert Leonard 25:20
From the perspective of the company that’s working with your fund, are they receiving a capital investment and you take an ownership stake in the company, just like a traditional VC fund would, except you guys are just specifically focused on these types of impact companies?

There are VC funds that focus on pack, healthcare or whatever it may be. There are VC funds that focus on everything and you guys are a traditional VC fund, if you will, but you just focus on these impact companies.

Carrie Rich 25:45
That’s exactly right. We are looking for companies that can generate both financial and social impact returns. We have five areas that we generally look at in terms of investment opportunities for the global impact fund. They include health, education, financial services, economic mobility, and environmental stewardship.

For us, the reason we can go so broad is because the Global Impact Fund gets some of our pipeline from the Global Good Fund, which is a nonprofit accelerator organization fellowship program.

Through the Global Good Fund, we effectively de-risked some of the companies through mentoring and leadership development that we then invest in through the impact fund.We also look outside of the Global Good Fund’s network to identify other social entrepreneurs the same way a traditional VC fund would.

Robert Leonard 26:34
I know you mentioned that you guys have been a VC fund for about three and a half or four years. Have you been seeing an increasing interest on the investor side from people that want to start investing in these types of funds?

Because it seems to me that it may be more from the millennials, so maybe not investors who have all the money to invest in a VC fund yet. Though it seems like there’s a lot of people that are starting to want to focus on these types of investments. Are you starting to see that in your VC fund?

Carrie Rich 26:56
You’re nailing it. That’s definitely happening. When we originally thought about this concept, it was about seven or eight years ago. At that time, it was really hard to convince people that you could do well while doing good.

People thought that you had to give philanthropically at a one bank account and invest from a different bank. Now there is recognition that you can invest money to do well financially, while doing good for the world.

What we’re seeing that’s really exciting right now is an uptick in participation from next generation investors. and in families where the children are in their late 20s to 30s, they are definitely encouraging their parents to get involved in impact investing in a way that was not happening for years.

Robert Leonard 27:40
For someone who wants to become an impact investor, how much money do they need? Do they need to be an accredited investor just like they would for a traditional VC fund?

Carrie Rich 27:49
To invest in a VC fund, you do need to be an accredited investor. However, I personally got started with impact investing without doing it through a VC fund.

The way I did that, and not that it’s the right way, but it’s a way is I sought out leaders who I really wanted to support who are running ethical, socially impactful businesses where there was going to be a profit or I thought there would be. I saved up over a period of time to be able to make pretty small investments. It doesn’t require being an accredited investor to get started.

What’s required is that you start looking at what’s out there and express interest in what other people are doing that could be creating financial and social impact returns. What I did was just, I asked the leaders of a business for coffee and just said, “Could I learn more about your business and everything that’s gone wrong because I want to help you succeed? I really care about the business you’re leading and you as leaders. I believe in you. I want to help you. How can I help you with the capital and the financial capital that I have?”

I think that’s a great way to get started is to ask people for a virtual conversation at this time or when COVID has ended, in person.

The reality is, most people are really receptive to to a helping hand and that millennials who are getting started, who may be don’t have an accredited investor status, can still be investors by taking a slightly different route, starting a little bit smaller and finding companies that you really believe in knowing that it’s a financial risk and you could lose all of your money.

That establishes a track record for you to get started as an impact or angel investor.

Robert Leonard 29:26
As the VC fund, and you’re analyzing these companies that want investments, how do you quantify or just consider the social impact that a company is going to make? It seems like a very qualitative thing. How do you quantify that? How do you compare one company to another? It seems like it could be apples and oranges. How do you consider that?

Carrie Rich 29:43
Measuring impact is definitely a challenge. Thankfully, there are international rating systems like *inaudible*. There are different international standards.

Rockefeller Foundation has played a critical role in establishing these global standards for social impact. We pulled from those social impact standards to be able to measure the effectiveness or social impact standpoint of the companies that we work with.

We also spend time working one-on-one with each company to ask them to quantify the social impact. Really, I’m very thankful for our initial investors, because they were the ones who demanded that from my standpoint, coming from the social impact space, it was obvious to me when these companies were delivering social impacts or not.

However, our investors wanted more than that feeling. They wanted to know how my money is, not only making me more money, but helping create a better world. Of course, a feelgood factor in that.

We can help quantify that by talking and working directly with the entrepreneurs and helping them take their impact measurement to the next level. Through some of these international rating systems, not only provides a benefit for the companies themselves, but also our investors.

Robert Leonard 30:30
Is there essentially a board of directors maybe or just VC partners that have the ultimate say, or ultimate decision on which companies to invest in?

Carrie Rich 31:00
We have what’s called an investment committee. What that investment committee does is the final stage of due diligence, before a decision is made from an investment angle.

We would first receive interest from the companies or perhaps go out and seek out companies that we want to invest in and do some initial due diligence and bring that to the investment committee.

The investment committee, in an ideal world would be a diverse array of different perspectives, which was not always the case. And so, diversifying who’s at the table from a decision making standpoint is critical here.

Then that investment committee will help make a decision about why or why shouldn’t we as a fund invest in a specific company. Then ultimately, the decision is made by the investment committee in some companies, or the managing partner, and other VC funds.

Robert Leonard 31:50
For millennials who are listening to the show today that might not fit the qualifications of being an accredited investor to actually directly invest in an impact fund, how can they make responsible investment decisions that make satisfactory returns, so we don’t want to sacrifice any of our returns, while also still having an impact on the world?

Carrie Rich 32:08
I love this question and I think in the future, we’ll see more opportunities where folks can invest in smaller amounts. I think there are already some funds that are doing that.

I think the first recommendation I would have is to look for first opportunities where you don’t need to be an accredited investor. Usually what that looks like is directly approaching social impact entrepreneurs and asking them.

Maybe they need angel investors, maybe it’s not a formal round, not a seed A or seed B stage investment yet where they’re recruiting venture capital investment. Maybe they want a friends and family round, that you as a millennial can participate in a smaller way and have meaningful social impact.

The way to do that is by networking, reaching out to people and expressing interest in their company as a potential investor.

Robert Leonard 32:55
I’m very entrepreneurial. As we’re talking, I’m thinking about just different ways that millennials, or just non-accredited investors could get involved in this space.

Not too long ago, we had a guest named Artem Milinchuk on the show. He founded a farmland investing crowdfunding platform. You had to be accredited, but you could still invest in these different farmland investment opportunities through this platform. It made me think of just all these other real estate platforms that are crowdfunded.

It seems like there could potentially be an opportunity to crowdfund an impact fund, if you will, for non-accredited investors, that allow them to still invest in companies that are doing social good. Then there’s also probably an opportunity.

I know my local credit union actually has a program where you can invest into local businesses that are looking to raise money, and not all of them are going to be for social goods. You’d have to find one that is, but those could be opportunities to invest in socially responsible companies in your area, when you don’t have to be an accredited investor.

Carrie Rich 33:55
You’re making great points. I believe there will be future opportunities and are some today where you don’t need to be an accredited investor.

The challenge from a funding standpoint is there are different rules from an SEC standpoint that kick in the more investors you have. The lower the threshold it is to entry, the harder it is to manage because there are different rules that apply.

One of the things that we’re doing at the global impact fund, for example, is creating opportunities for first time investors, especially people of color and women, so that our investor pool reflects the diversity of the entrepreneurs that were invested in.

I think as you continue to see the threshold decrease for the size of the investment, you will definitely see more opportunities for millennials to participate. But I would just encourage that, like I said earlier, there are so many ways to invest beyond a VC impact fund.

By going out and being an angel investor, you are an impact investor. You don’t need to wait for other people. You can do it right now. You can go be an impact investor. It’s not about how much money you have. It’s about using your social capital and your financial capital to create social good with financial dependence.

Robert Leonard 35:07
I wonder if there’s even opportunities on platforms like Kickstarter. I haven’t done any research into this. I don’t know, I’m totally speculating here but a lot of people that are trying to raise money on Kickstarter are often millennials or younger people.

Like we talked about, a lot of the younger generation are looking to do social good.

So I wonder if there’s going to be a component where you can invest in or back companies through platforms like Kickstarter or Indiegogo that are doing social good. Maybe you could do something that way.

Carrie Rich 35:33
I have seen a few examples of crowdfunding for specific companies, when a company wants to ensure that there’s diversity of investors from an age and demographic standpoint, there are crowdfunding fundraising techniques that are being used to create social impact companies. It’s a different way. It’s a different approach. It’s a really neat approach to engage a more diverse population.

Robert Leonard 35:56
As an investor yourself, how are you participating in impact investing? How do you consider portfolio allocation when you’re thinking about how much exposure to add to impact investing versus traditional investment opportunities?

Carrie Rich 36:10
As an impact fund manager, my skin is in the game, so I personally put money in and my time is in the game. My reputation is in the game. I think, for me, personally, we’ve been supporting social entrepreneurs for eight years through the Global Good Fund, which is a nonprofit side, and for almost four years through the first impact fund, and now we’re raising a second.

What I can say from a reputation standpoint, is that there are very few women leading VC funds. There are even fewer social impact funds and there are even fewer social impact funds led by women.

For me, this is an immense responsibility to try to pave the way for aspiring impact investors who are women and other minorities who want to get in the game and making sure that our investment committee, advisors and staff reflect the diversity of the entrepreneurs that we invest in is critical to doing this right.

Robert Leonard 37:05
Where do you see the future of impact investing heading?

Carrie Rich 37:09
I see the future heading in a direction where impact investing is no longer its own thing because I think our generation will demand that companies take a greater stake in social good and environmental stewardship. It’ll be natural to invest in companies that do good for the world. I think that’s the future.

Robert Leonard 37:31
Yeah, I had a guest on the earlier episodes. His name is Daniel Crosby. He said the same thing about behavioral finance. He said he sees in the future that there’s probably not going to be a topic or study of behavioral finance. It’s just going to be finance. It sounds like you feel the same way as there’s not going to be necessarily impact investing, it’s not going to be broken out as its own thing. It’s just going to be part of being a successful investor.

Carrie Rich 37:53
I totally agree. I think it’ll take a little while to get there. I think it’s on us to demonstrate that you can make financial returns while doing good because the more that happens, the more likely it is for businesses to pursue social impact, and for investors to do the same.

When we don’t do that, well, the opposite will happen. I then think it’s going to be a long timeframe to make it happen. I don’t think it’ll happen tomorrow. I think it’s on us to start the companies that are socially impactful and to invest in companies that are socially impactful, and make it work.

Robert Leonard 38:25
Yeah, that’s going to be a big shift. Any shift like that takes time but I actually agree. I think I could see it going that way, especially with our generation going the way it is and starting to invest the way that it is.

Carrie, thanks so much for coming on the show today and talking all about a new type of investing that I really hadn’t been too familiar with, or really studied too much myself. For those listening today that want to learn more about this topic and just the various different things that you have going on, where’s the best place for them to reach you?

Carrie Rich 38:51
I would love to receive your email. My email is carrie.rich@globalgoodfund.org.

Robert Leonard 39:02
All right. I know everyone listening to the show today is very active. They love reaching out to the guests. So guys, take advantage of that opportunity. Reach out to Carrie and pick her brain. See what she has for information that she can give you. I’ll be sure to put a link to her email in the show notes as well as the Global Good Fund and all the different things that Carrie has going on.

Thanks so much, Carrie. I really appreciate it.

Carrie Rich 39:20
Thanks for having me.

Robert Leonard 39:21
Alright guys, that’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro 39:28
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