Major transitions require alternative and future-proof fund structures
Major transitions are desperately needed to address the rising individual strife and social discord while keeping the earth habitable. And entrepreneurs are increasingly driving this transition.
Across technologies and solutions addressing the energy transition, solving the mental health crisis or creating climate-resilient ecosystems, entrepreneurs with big ambitions can make real sustainable and socially inclusive change possible with sufficient time and appropriate investment capital. However, tensions exist between the great ambitions of entrepreneurs and the financing models that should make these a reality. We see the following challenges:
1. An entrepreneur who is working on a major transition needs time. An investment fund must join in to maximize the chance of success. Nevertheless, a fund often has a limited term to exit.
2. As a financier, you want to holistically support an entrepreneur in their journey. In addition to funding, this also means nurturing the entrepreneur's wellbeing and his/her leadership effectiveness. How can investment funds make this part of their value-add?
3. The current investment system rewards high risk-takers, aiming to create so-called “unicorns”. But this extractive mindset is antithetical to the natural limits of our planet and our own resources as human beings. How can an integrated focus on stakeholders – not just shareholders – and sustainable growth be included in the design of an investment fund?
In this breakfast session, hosted by Fair Capital Impact Fund and Masawa, we will share our experiences of designing and implementing new alternative financing structures and governance models that address these issues and are contributing to a more compassionate and responsible capital system. We will also explore together additional elements needed to finance the major transition.