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Here’s a story about venture capital with a do-good focus.

Sacha Pfeiffer writes at the Boston Globe, “Among entrepreneurs, there’s a dreaded place called the Valley of Death. That’s where startup companies go when they run out of funding before making money on their own, and it’s an especially common fate for clean-energy startups, like manufacturers of solar panels and wind turbines. …

“But what if that early-stage, high-risk financing could instead come from philanthropists, who aren’t driven by profit? Later, traditional investors could step in and supply continued funding.

“That’s the concept behind PRIME Coalition, a year-old Cambridge nonprofit that has pooled $1 million from wealthy donors, including Hollywood actors Will and Jada Pinkett Smith, as seed money for its first investment: an energy storage startup company. …

“PRIME rethinks the traditional definition of charitable work and charitable giving. Its founder, 30-year-old MIT graduate Sarah Kearney, argues that companies whose products or services reduce greenhouse gases are doing a social good, just like soup kitchens and homeless shelters, so they should be able to receive philanthropic funding. In this case, the social benefits include conserving the environment and fighting climate change.

“The group searches for early-stage alternative energy companies … then locates philanthropists or socially minded for-profit investors to fund them. Those could include charitable foundations, investment offices of wealthy families, and donor-advised funds. …

“Peter Rothstein, president of the New England Clean Energy Council, said philanthropic funding ‘can make a significant dent’ in filling the need for early-stage capital for clean-tech companies.” More here.

It is not unheard of for philanthropy to put its investment dollars into companies that provide a social good. Read about the Heron Foundation’s decision to do so some years back in “Expanding Philanthropy’s Reach: Mission-Related Investing,” here.

Photo: Lane Turner/Globe Staff
PRIME Coalition founder Sarah Kearney says that companies whose products or services reduce greenhouse gases are doing a social good and should be able to receive philanthropic funding.

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Suzanne and Erik went to grad school with David O’Halloran, whose consulting company was recently cited in The Irish Times for its focus on sustainable business ventures in Africa.

“For Irish entrepreneur David O’Halloran, adhering to a sustainable business model that helps develop and protect local communities and their environment is the key to enjoying long-term success in Africa’s emerging markets. In late 2006, the Galway man, along with three former colleagues, rejuvenated a business development consultancy called BusinessMinds by turning it into an incubator company that develops, finances and operates sustainable commercial ventures in Africa.

“The idea behind the enterprise is to offer investors a socially responsible approach to doing business on the continent, while also making a profit. ‘Historically, many investors in Africa have used a more short-term, exploitative business model, one which has existed since the days of colonialism,’ O’Halloran says. ‘Unfortunately, for some investors this remains the modus operandi even today. As in, they take what resources they can and then get out without giving much back to the local economies.’

“However, O’Halloran says he believes people are starting to realise that such an approach is inherently unstable and increases risk.” His organization is called BusinessMinds, Africa.

Bill Corcoran wrote the Irish Times article. Read more here.

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