Top 5 Venture Capital Firms: Funding Social Missions

July 27, 2009Sparxoo

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Photo by Iain Gordon, from Magdalen Green

By Ethan Lyon, Senior Writer

In recent years, a new breed of venture capital firms has emerged to make an impact beyond just profitability. Social venture capital funds are adding a new mission in combination with positive financial returns: social and environmental impact. Highlighting social venture funds across the world, this week’s top five will focus on VC portfolios that range from organic beverages to water purification systems in Rajasthan to fiber optic enterprises making energy companies more efficient.

1. The Acumen Fund

With the mission of reducing world poverty, the New York City-based venture capital fund invests in enterprises that improve the lives of those in developing nations. With branches in India, Kenya and Pakistan, the Acumen Fund has global reach and supports entrepreneurs through its vast network. The unique characteristic of the Acumen Fund is they are non-profit. They take an entrepreneurial approach to solving poverty by way of support programs that focus on health, water, housing and energy. Through their innovative, entrepreneurial approach, they can build a solid business framework to combat widespread poverty in developing nations. Aqua-Aero Water System is an Acumen Fund-sponsored company that recently provided drinking water for remote, arid regions of Rajasthan.

2. Good Capital

This San Francisco-based VC firm invests in social enterprises that create social equity. In essence, they are the bridge between philanthropy and traditional investing. Highlights of their portfolio include Adina’s World Beat Beverages, a fair trade and organic beverage provider that gathers flavors from around the world to create “drink no evil” beverages. In addition to their social entrepreneurs, Good Capital has numerous projects to support education, financial support and engagement, such as their involvement in SoCap—a conference for social enterprises to share and build relationships with like-minded entrepreneurs and VC firms.

3. Underdog Ventures

Bridging philanthropy and profitable enterprise, this Vermont-based venture capital firm is heavily invested and wildly passionate about socially responsible investing. The key element that differentiates Underdog Ventures from other social venture funds is investors can choose where to allocated their investment based on Underdogs core passions: natural and organic food, environment and conservation, socially responsible consumer products, and socially responsible investment companies.

4. Clean Technology Venture Capital

This eco-focused VC firm, with offices in New York and San Francisco, invests in mid-sized alternative energy companies with promising exits. The eco-VC firm investment matches the current revenue of prospective companies, which is approximately between $2-7 million. With over 100 years in clean technology, private equity and entrepreneurial experience, Clean Technology Venture Capital aims for a $30-100 million exit in 3-5 years. Their portfolio has an array of companies that contribute to a sustainable future in a unique way. SensorTran improves efficiency of energy providers across traditional and alternative energy companies through enhanced fiber optic cables.

5. Community Development Venture Capital Alliance (CDVCA)

This network of like-minded social ventures aims to educate, support and promote investing in businesses focused on social development. This New York City-based alliance manages its own investment vehicle, called the Central Fund. Through conferences and workshops, the CDVCA seeks to gather social investors and share industry insights. Unlike a typical venture capital firm, the alliance brings together many prospective and established venture capital firms with a focus on long-term sustainability to create impact from the top down.