Hi, guys. How is it going?
I’m here to talk to you today about the power of entrepreneurship
to solve some of our most pressing city challenges
and how investors are missing the boat.
When you open up the pages of TechCrunch or the Wall Street Journal,
you read about the startups that are changing the world
through the next dating app or on-demand butler service.
This, by the way, is a real article
about a real startup in a real newspaper.
We’re told that entrepreneurship has the power to drive
real change and to revolutionize industries,
but the startups that seem to be getting all the attention,
and the funding these days
aren’t solving problems that matter.
We need more entrepreneurs solving real problems,
problems like homelessness and sustainability
which is why my friend Julia and I started an organization
to help support urban impact entrepreneurs.
So, what do I mean by urban impact?
Well, you are an urban impact entrepreneur
if you’re looking to develop a solution to a city problem
like, I don’t know, transportation or work force development
比如 我不确定 交通或者劳动力发展情况
and you’re looking to scale that solution to cities across the U.S. and beyond.
Urban impact entrepreneurs are incredibly important to the future of our cities
because we are experiencing a really unique confluence of events right now.
On the one hand, we’re rapidly urbanizing.
So, for the first time ever,
81% of Americans now living in cities
and that numbers are gonna keep growing.
Here in Sant Antonio, you guys are on the list of the Top 10 fastest growing cities.
But, on the other hand, just in light of the fiscal climate we are in,
our municipalities can no longer provide all of the quality
of life services and amenities
that make it so great to live in our cites.
From my perspective at least, this is a real opportunity for startups.
So, what are some examples of some awesome urban impact startups?
Well, these are companies at the forefront of Tech for Good,
and they’re looking to solve problems like homelessness.
So, take Handup for example,
Handup is a crowd funding platform for
homeless and other neighbors in need.
Individuals can use the platform to raise money towards useful items
like medical expanses and housing.
Urban impact entrepreneurs are also looking to support
the implementation of universal pre-school in our cities.
So, Kidadmin is a great example of that.
They are basically a common application for pre-schools
and although they only launched about a year ago,
they’re already in 45% of all pre-schools in San Francisco.
They are in all 9 bay area counties,
and they’re now looking to expand to their next major metro.
And of course, urban impact entrepreneurs are looking to
solve the city problem of transportation.
So, Hitch is a great example of that.
Hitch is peer-to-peer ride sharing platform
that matches cars with multiple passengers.
The idea here is to fill up all the seats in a cars,
so you can take cars off the road.
And excitingly, Hitch recently announced that
it was acquired by the ridesharing company Lift,
which is pretty great.
I’ve seen first-hand, the impact that urban innovators
can have on their communities individually,
but collectively, I’m talking about an urban innovation movement.
These are start-ups that are scaling to cities across the U.S..
They are creating hundreds of quality community jobs,
and they’re doing it profitably,
which is great.
But if they are so great,
why aren’t we seeing more people start company in this space?
Where are the urban-impact entrepreneurs?
Most of today’s big innovation starts small.
And they start with small leap of faith investments called seed investments.
Seed funding is absolutely critical.
Without it, most startups just can’t get off the ground.
They need this funding to help build up their product
which they can then go use to raise more money or grow their business.
But the thing is, urban impact companies are not getting seed funding.
In a study we did for work,
we found that entrepreneurs who are looking to solve community problems in cities
are less than half as likely as their more traditional peers to secure seed funding.
That’s a huge disparity.
And it means the startups in this space
aren’t getting the resources they need to get off the ground.
So, why aren’t investors stepping up?
Well, there are two types of investors that could step up.
The first are more traditional seed funders
These are folks like tech Angels and Micro VCs.
But these types of investors think that
social impact, urban innovation means lower return,
which is too bad, because, urban innovators are generating real returns.
I mean just look at Zipcar or Revolution Foods.
我是说 看看Zipcar和Revolution Foods这两家公司
And then there’s the second type of investor called the impact investor.
So, impact investors prioritize both social impact and profit.
So you’d think they’d be a great fit for urban innovators,
but you would be wrong,
because impact investors
don’t do seed funding.
They don’t like funding untested business models
which basically rules out all startups.
A recent study by JP Morgan and the Global Impact Investing Network,
identify $46 billion in impact assets under management,
but only 3% of those assets are actually earmarked for seed funding.
That comes out to about $1.38 billion
which is a drop in the bucket
in terms of the overall investing landscape.
Just to put that into perspective,
that’s less than the ridesharing company Uber, by itself,
raised in its last round of funding.
Equally problematic is the long funding cycle of impact investors.
So what little seed capital they do have to invest
is super hard to get a hold of.
We hear about impact investors having long
you know, vetting cycles,
requiring long written proposals with tons of metrics.
But if a startup’s founders are worried about
how they’re gonna have to pay for their rent next month,
how can we possibly expect them to endure such a long funding cycle?
Comparatively, more traditional seed funders
have really short vetting cycles
because they understand that startups need to move quickly.
And that they haven’t been around long enough to have any kind of metrics
that would prove out a theory of change.
And this is how startups, or excuse me, this is how impact investors should be operating.
初创企业就是 抱歉 影响力投资人就是这么操作的
So, is the lack of impact investors even a problem for the urban innovation space?
The answer is yes for two reasons.
First, because impact entrepreneurs miss out on the valuable guidance
that comes from mission-driven investors.
And impact investors can help make sure that as a company grows
it doesn’t lose sight of its social priorities.
But there is a second and more important reason
why the lack of impact investors is such a huge problem.
As I mentioned earlier, many urban innovators
are quickly written off by more traditional seed funders.
Why? Well it’s kind of a chicken and an egg thing.
Investors like investing in sectors that
have strong track records of financial return.
But the urban innovation space is new,
so it hasn’t had many home runs yet,
which means that investors aren’t gonna be investing in this space.
And that’s why we have 100 dating apps,
and not 100 start-up solutions for the homeless.
I do love a good dating app though.
Entrepreneurship is a real
undisputed driver of innovative ideas
to solve big, hairy problems.
But we’re only gonna get what we pay for,
which is why we need impact investors to step up
and start seeding the market.
Without them, urban impact entrepreneurs are not gonna be successful.
Will the urban impact space be super high growth enough
to attract a ton of more traditional seed funders?
You know I’m hopeful. I really am hopeful about this.
And I think that the success of some later-stage urban companies
like Airbnb really backed me up on this.
But there’s only one to find out for sure,
and that’s why having impact investors step up and seed the market.
This in turn, is going to drive
urban innovators towards the operational milestones necessary
to really attract a whole variety of investor classes.
So, I challenge impact investors to start deploying capital at an earlier stage,
and to make sure that they’re reducing the barriers to access that capital.
and I encourage more traditional seed funders to recognize the financial opportunity
that comes in the urban impact space,
because if we really want to see more for-good, for-profit startups out there,
we’re gonna have to start funding them,
because we are only gonna get what we pay for.
Hi, guys. How is it going?