Philip Berber is applying his experience building an online trading platform to the chronic problem of matching interested investors with promising entrepreneurs.
An interested investor and philanthropist himself, Berber launched Enable Impact several years ago to help impact entrepreneurs and investors to find each other. Having built CyBerCorp, an online brokerage for day traders (and solid it to Charles Schwab in 2000), he believed technology could catalyze the flow of capital to promising solutions.
Investors will be able to click their way through the deal on a single regulated investment platform.Philip Berber, Enable Impact
With a set of new transactional features, Enable Impact is beginning to realize Berber’s aspirations. The company this week launched a regulated, end-to-end funding platform. The site, which already has a handful of live opportunities, is focusing on growth-stage ventures raising around $1-2 million in Series A funding. Typically lead investors will be seeking co-investors to close the round.
Berber expects the platform to grow to $50 million worth of deals over the next three years. The platform is free for investors: income will come from success fees paid by the companies. Investors will be able to find and fund impact companies in about five clicks, from validating accredited investor status to sending money and completing deals.
“It’s time for this sector to have the same investment transaction technology that powers crowdfunding and is all around us, to the point that it’s shaking up the venture capital world,” he says. “Investors will be able to click their way through the deal on a single regulated investment platform.”
Credibility Hump
The short history of impact investing is already littered with matchmaking platforms that have largely failed to take off, and Enable Impact is not the only initiative determined to try again. Berber, who has funded Enable Impact himself, believes the new service has the ingredients to succeed: capital, technology know-how, a partnership with a broker-dealer with a mature investment platform, and trusted deals. “We’re not reinventing the wheel,” he says.
The rationale is that investors want to see deals coming from a trusted source. Bringing transactions that already have the imprint of a lead investor helps pass the “credibility hump.” The companies vetted by the distinct investment committees of North Capital, the broker-dealer, and Enable Impact. Berber says less than 1 percent of the deals reviewed go on the platform.
Impact objectives, as established and reported by the companies, are one of six high level criteria which the committee factors into its decisions. Enable Impact also plans to monitor and track invested companies’ impact performance over the long term for its own impact reporting.
Berber says: “Our job is not to try to measure [the impact]. It’s to try to report it and the investor makes the final call on what impact they want.”
Enable Impact, initially a database of companies and investors, claims three facilitated deals under its belt. NurtureMe, a company specializing in responsibly-sourced, organic baby foods, found investors from Investors’ Circle thanks to an alert from Enable Impact. The company raised $250,000 to complete a $1.7 million round.
Agoraforgood, a platform helping people with their charitable giving, and Penpal Schools, an Edtech company, similarly leveraged the Enable Impact database to secure a $250,000 investment.
Berber says dealflow will increase as new investors enter the market. He estimates there are only about 30 impact investors currently active. The next group is about three hundred, and the larger potential universe three thousand – all of whom he says are following his platform already.
“Personal relationships are still very important in the process,” he says.
This post was originally published on ImpactAlpha.com
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