 The first thing I'd like to do is introduce you to Manca. Manca is a social entrepreneur who launched her business, Grassland Cameroon, in 2016 to support smallholder farmers, much like her grandmother, actually, in her home country of Cameroon. And we met Manca about four years ago. She went through one of our accelerator programs. And the thing about Manca is that she has, like so many of the other entrepreneurs that we work with, such a difficult time accessing that trillion dollars worth of impact investing that the gin reports to us is out there. And we all know that this challenge is even that much more difficult for black founders working in very challenging environments like Cameroon. So despite all of that, she actually was successful in getting a very interesting convertible note from ADAP Capital. So she is investable. She can pass due diligence. But the problem is then what's after that, right? So quite soon, she's right back on that hamster wheel looking for the next infusion of capital. So Manca and so many other entrepreneurs like her are zebras, not unicorns. And zebra enterprises, as defined by Zebra's Unite, have both stripes, both profitable and have potential for growth, and also make a difference in society. The thing is, though, that they're just not growing in the hockey stick manner that many of the investors are looking for. So what is the problem? What is the gap that we're finding? Why are we finding this gap? And we've identified basically four main issues. The first is the stage gap that many zebra enterprises find themselves in. So there's lots of opportunities, and there's lots of resources available at the earlier stage. For instance, challenge grants and microcredit and other programming available for very, very early stage companies. And then down at the other side, downstream, there are impact investors who are looking for more established enterprises. So it's this literal valley of death. The second is instrument problem. In many cases, what's available out there in the market, for instance, traditional equity, is not always appropriate or even very favorable in terms of the terms that are being offered to the entrepreneurs. And bank debt is often completely expensive, 20, 25, or even more percent debt. So the existing instruments often don't match the needs of the zebra entrepreneurs. The third issue has to do with market fragmentation. So each one of the investors and support organizations with our own theory of change, with our own investment thesis, we have our own specific sectors and geographies and instruments. It's incredibly unfriendly to the very entrepreneurs that we're all here supposedly to help. It's very, very difficult to navigate for all but the very most connected. So what that does also is it exacerbates exclusion of certain types of entrepreneurs from that system. And then the fourth issue is the go first problem. Everyone's kind of waiting for someone else to jump in and go first. So from Miller Center's perspective, we're thinking, hey, 99.9% of the entrepreneurs that we're accelerating, we've accelerated more than 1,300 over the years, are zebras actually. And we don't want to be accelerating folks to nowhere. And in fact, in our 2025 strategy, we want to see the entrepreneurs double the amount of funding that they are raising within three years. And how are we going to do that? We want to become the go to on the demand side for capital to help those zebra enterprises navigate that valley of death. And how are we going to do that if we don't get involved a bit on the supply side? So we dug into the research, we understood the gaps better, and we came up with a solution. Voila. Miller Center invests. It has two windows, one window for the earlier stage and more risky entrepreneurs. We call it the Innovation Fund and Affordable Fund. We call the Growth Fund. We're so excited. We feel like we have so many, let's say, comparative advantages in order to be able to do it. We have the pipeline, hundreds of diligence and vetted entrepreneurs, many of them in this room that we've worked with. We have our mentor pool. It's an amazing group of more than 300 executive mentors who really know those entrepreneurs well and can recommend them and can help them to become investment ready. We've had some positive experiences already launching a couple of emergency funds during COVID called the Trust Funds with Beneficial Returns and Ted Levinson as a fund manager, very successful. We have our very own John Kohler, who is one of the thought leaders in innovative financial structures. We really felt like we could make this work. And in fact, oh, we even had an article written in Forbes Magazine about it. So, hmm, a year and a half later, where are we? Well, it's a mixed picture. But certainly on the debt side, on the affordable debt side, we find ourselves stuck, to be honest. We simply couldn't figure out how to navigate the return expectations of our anchor investors, four or 5%, with the high administrative and legal fees involved in trying to set up a relatively small and nimble fund and get affordable debt to the entrepreneurs that we needed. In addition, we wanted to work with an established fund manager that had expertise and networks that were complementary to our own. And their sort of underwriting criteria meant that the only entrepreneurs in our network who could actually qualify and get access to that debt already had better options somewhere else. So it was kind of like the anti-catalytic. We ended up coming, what we were able to do with a lot of, by the way, super smart people trying to help us figure this out, was basically going to be kind of the opposite of what we had set out to do. So, OK, what's next? So we're not giving up on the idea of affordable debt. But we're going back to the drawing board and saying, OK, let's go back to first principles and the initial question that we wanted to ask, which is, how can we drive the right flavor of capital to the entrepreneurs that we work with at the right point in time in their growth trajectory? And I would broaden that question. I would broaden that question to everyone in this room and everyone in our ecosystem. How might we all work together to ensure a seamless continuum of support and capital to the entrepreneurs and provide that sort of dynamic pathway that makes sense and puts the entrepreneurs in the center of the equation instead of ourselves and our theory of change and all of that? So the one thing that we are moving forward with, so we're still interested in that, we are moving forward with this innovation fund where we're going to be deploying, we're going to go first deploying relatively small ticket sizes 50 to 250,000 into these zebra enterprises and we're making use of philanthropic funds, which I think is something that is absolutely needed to be more creative with DAFs and family office funds and things like that within this overall capital stack. So we're inviting everyone to join us in this and here today what we're looking for is answers to this question about how can we convert that desert into a lush green, verdant landscape with all of the nutrients and resources required so that zebra enterprises like Monca can be galloping out of the belly of DAF as opposed to sort of trudging along. So that's the big picture sort of challenge for us today and without any further ado, that's what I've just tried to kind of frame our own experience and why we've put this whole session together and now I'd like to ask John Kohler to talk about how we'd like to activate and engage all of you in a conversation that helps us to get closer to finding some answers to this thorny problem. So thank you. Thank you Bridget, that was great. As always, hello everybody. I look around, I see all these faces, I feel so heartwarming to me to be with you, catch up with many of you who I've worked with before and hear about your great work. Today we're gonna have a kinetic session and I wanna just make a few comments to maybe add some stimulus to your thinking for that kinetic session. I was listening to a SoCAP podcast, sort of pre SoCAP podcast and it featured Fran Siegel and Kathy Clark, two ladies I have a lot of respect for in our sector and they were making a point, a framing point that really rang true to me and that was over the last few years, it seems like the challenges that we're trying to address have expanded rather than narrowed and in fact, if you look at some recent events, you can see that especially considering climate, global food security and refugees, it's gotten even worse. So we're kind of slipping back a little bit. When issues broaden or challenges broaden like that, the language that we use with each other is also broadened and maybe becomes unspecific and generalized and can be and feel a little overwhelming. Today, this morning almost, we want to narrow the conversation and use the sharp minds and the great deep experience in this room to try to approach some of the things that Bridget was talking about, especially specifically our topic being how do we fill the funding gap for impact zebras? So what I'd like to do is to first of all say, look, this is not a new problem. It is something that Bridget pointed out that had to do with stage. These are some barriers, stage, the fractional nature. I have a slide up there, there were no fractional nature of some of the investors, the appropriateness of some instruments being used. And then finally, are there enough leaders, people actually crafting the investment by investment structure so that others who follow can come in as well. So those are some of the barriers, but I think that in the corners that we'll paint here, the corners that we have as discussion topics, we look at some recent trends that have shown some early and positive results that has to do with blended capital. This could be from a structure standpoint on a deal-by-deal basis or at a fund level. This could be fund structures which are more appropriate to bringing capital, different types of capital, not just equity investments to zebras in this funding gap. And it's also on what's right for the entrepreneurs. We have a lot of entrepreneurs in this room and it's terrific to hear their voice as well. Some of you know I spend a significant amount of my time with investors. In fact, many hundreds over the last several years and it is gratifying because I get to put my fingers on the pulse of some trends that I see. There are some interesting trends that I would point out that I've seen recently. The first is that there are new participants in the impact investor group. Those participants are tending to be even more mission oriented. So they come from international NGOs. They come from foundations. They come from corporates who are engaging in supply chain and other kinds of local activities in emerging economies. That's really great. The next is there is now a reservoir of local fund managers. I know because I've been out there working with them. And this is also quite gratifying because it was an ambition that we had maybe 10, 12 years ago. How can we create investment managers who are in the market providing local context and the contacts in addition to partnerships? And they can be the syndication partners for many of the rest of us who live in the global north but still want to participate in that zebra financing. The third is there's a thematic and this is very new but there seems to be especially with the interruption of global supply chains and other sort of pressures economically. There seems to be a great kind of leveling where portfolios are being crafted in a thematic way where they are invested across the value chain and the companies that are in a fund managers portfolio tend to be able to rely on each other at least for insight if not for commerce. So that kind of Karitsu if you will to use a Japanese manufacturing term that kind of Karitsu is bearing some initial progress and promise. So there's some hope here as I frame around our challenges but what we want to do today is to use a world cafe. How many of you have done a world cafe before? So about a third of the room that's good. We're going to split the room up into sections so we'll have a section sort of here to my front left a section in the back also sort of rear middle and left and a section over here and I'll describe those to you but the idea of the construct of a world cafe is that we're out to pull the insights and your experience what works what doesn't work just as Bridget framed for us a moment ago. Let's learn from it. I'm one of the co-founders of Tonic which is an impact investor syndication network and we have a phrase that we like to use which is let's talk more Tonic. What we mean by that is let's go do and then talk about it. Let's learn from trial. Let's not just try to do study after study. And I think that's the spirit of this room today. Now there's a lot more of you than I would have expected. So I'm really happy about that. I'm gonna leave it up to Paul where's Paul. He's right over there. Paul. Paul, raise your hand. Paul, bend that. Okay, yeah. I'm gonna leave it up to Paul to end the lead discussants to decide if you stay in one group or split up into two groups and try to get to a more personal conversation and pull out some of your experiences and then we will share them back. Now the way a world cafe works is that you rotate. So there's three lead discussion stations. You will work at one and then after about 15 minutes, Paul will ring a bell. Paul is our bellman. Sorry, Paul. And ring the bell and it's gonna be hard. That's really the hardest part of this whole because you get so engaged but you'll rotate to the next lead discussion station and you'll have other experts there and they will review with you what went on already. What was the conversation got to and then you'll pick it up from there and then after 10 or 15 minutes, Paul will ring again and we'll rotate a third time. And once we finish all three rotations then we'll come back together as a group and I'll have the lead discussants come back up. Let me introduce them for you just so that you know. So we've got Anna and Yasmin and Alicia over here from Palladium and Convergence and Alicia is from Convergence. Okay, on Acumen, Yasmin's from Acumen. Yes, thank you. Anyway, so they will be focusing on blended capital just to give you a brief synopsis of that but they will be much more definitive in their definition of it. Ted Levinson and Mike Mumpe are in the back. Both are fund managers, both are fresh off of or maybe not even off of, sorry guys, fundraising. So the idea of what does it take to raise a fund? What's appealing to limited partners? What are new fund structures that might be appropriate for funding zebras? They'll be leading that discussion for you in the back of the room. And then we have Jay and Bree Jones will be over here. Both are self-described social entrepreneurs but they have a hidden deep experience with both funding and how do you build companies and make them go? So they wanna be leading the discussion about what is the voice of the entrepreneurs themselves and what works for them. All right, so with that... What about? Oh, yeah, yeah, yeah, right. So I'm being reminded that we also have Astrid here from Impact Zebras or Zebras Unite. Yeah. And Astrid Schultz is kind of a thought leader in this in terms of defining the audience and I think that she's gonna be with Mike or Astrid, did you decide to be a roaming? Capital boys, okay. She wasn't sure supply side or demand side but I think she'll go with... So which is it by the way? Are the funding boys supply or demand? It's supply. Okay, excellent. All right, so why don't we do that? And so how do we self-organize? So I will ask you to maybe stay close. If you wanna put it up here. Yeah, yeah, sorry. Yeah, it's okay, check it out. So I'm gonna keep you close. These are our three topics. What I want you to do is to divide yourselves, maybe stay close to where you are already. So back, side, front and then hopefully we can either split you into two groups if it's too big or stay as one group but start that discussion. All of the lead discussants have some topic, framing questions they can start with but please get your juices going if you will and let's have some fun and I'll see you guys in about 45 minutes. All right, Ted. Yes, I thought some of the most provocative subjects that we discussed were around time, which surprised me but the more you think about it makes perfect sense. So we spend a lot of time discussing the fact that investors have different expectations than zebras but most people don't think about the different time horizons. So I think it's traditional for investors to expect to see their capital back after five or seven or at most 10 years but there's an acknowledgement that the work that most zebras are doing takes much longer than that. They're not just delivering a good or service to a market but they're oftentimes building that very market or educating that market. And so how we square these different concepts of how long is long enough I think is an area that needs a lot more exploration around fun formation. One clever idea that was presented was the idea that you would have a fund that would begin with investors that had a long time horizon and were aiming for higher financial returns possibly and at a later date, new investors would join that fund, investors that had a shorter time horizon and might be willing to take a lower financial return. I thought that was very clever but that kind of sidesteps another issue that we discussed quite in depth through all three groups and that is what do we mean by returns? So obviously I think all of our minds go first to financial when we say returns, right? We're talking about money but I believe true impact investors are defining returns much more broadly and one of the things that funds need to do a better job of is reporting on their non-financial returns that they've helped achieve. So reporting around impact, that's both data and stories as well. Bridget began by talking about Monca and Grassland and Cameroon and I think that story resonated with all of us and that's a reminder that one of the ways that investors are compensated is through stories. I think that was a powerful comment. I don't think we resolved it but there was an acknowledgement that we have very idiosyncratic funders and very idiosyncratic entrepreneurs and this is causing a lot of the turmoil, a lot of the fragmentation, a lot of the inefficiencies that we have in the world of impact investing. We were very good at defining the problem less so at solving that problem but I think simply acknowledging that I think can be a powerful way to minimizing that issue that funders in particular I think I acknowledge that we're guilty of this at beneficial returns but we need to be more clear about what we offer and who we want to offer it to so that entrepreneurs can spend less of their time trying to find the right source of capital for them. Our conventional financial system is very efficient. There's very clear ways of how a business could grow and where they might seek financing and I think in our world it's far less clear and that causes great inefficiencies. The last point that I'll mention is that we have to find ways that we can provide liquidity to our investors that don't involve IPOs and that don't involve acquisition because although those might be relatively common, more common in conventional business those are very rare in the world of zebras. In each group we came up with names of zebras that had had exit events but it was a short list and I heard the same names repeated each time and so I think that speaks to the need for more debt, that speaks to the need for more self-liquidating investments perhaps being paid by dividends, by revenue participation agreements and the like. A lot of work needs to be done. If I needed to make one personal comment on it, I think we need to stop looking to Wall Street for the solutions, stop looking to Wall Street for the models to copy because what we're doing is fundamentally different than what exists in that world and we shouldn't feel constrained by broader finance in coming up with ways to operate. We need to look at the ultimate goal that we want to have and work backwards from there. I don't think that we need to satisfy all of the needs of investors. We need to begin by asking the question, what does the world need? Thank you. Time but I thought staying with the theme of finance, let's maybe talk a little bit about blended finance and have Anna do a quick review and then Jay will turn it over to does this make any sense in the entrepreneur's view? Sure, so our group talked about blended finance and how can that attract more capital to impact zebras? And of course there is an important role to play, risk reduction, perceived and actual risk reduction for these funds. So creating a first layer of loss capital, having TA facilities that support the entrepreneurs both in terms of making sure they're on track in their strategy and growth but also impact measurements and deepening that impact. But of course there are challenges, you need a first mover and a lot of the time part of the barrier to becoming a first mover is the complexity of blended finance. It's very hard to understand, it's perceived to be very complicated, it's also really expensive to structure often times. So trying to find ways to reduce the complexity and the expense of structuring blended finance vehicles is I think one of the pieces of the solution. The other challenge we talked about and I think there's a path towards the solution is just the narrative around concessionary returns. When you speak to investors that are looking for some financial returns, having that piece just requires more education because when they hear that there's a concessionary layer they essentially start expecting this whole thing to be philanthropic and not really give them the kinds of returns that they might expect. So turning that narrative to talk more about de-risking to increase your returns. You might need to be more patient, but in the long run you can get healthy returns through these types of structures. One of the key things I guess I'll mention also is just creating incentives, making sure you have the right people in the room and you have to continue nudging them to come together. It's never going to be that easy because it's complex and there are different interests from the entrepreneur side, from the philanthropist, from the TA providers. So you need to create the right incentives for all of these goals to come together for an ultimately beneficial impact for all. And the most probably controversial piece that came out of our discussions is that maybe we shouldn't be talking to commercial VCs for these types of vehicles because impact zebras are different. They're not Wall Street, as you were saying Ted. They will be successful in a very different way. They will grow, but potentially slower. Maybe there'll be a few more than one unicorn in a portfolio of companies. So the expectations are just misaligned in pitching these types of vehicles to commercial investors. And even when you do have the blended layer, the first-last capital layer, you're still mostly attracting DFI's and investors that are looking for impact, not just financial return. So I think the tool is very much needed. We need to think about the audience and how we present these types of vehicles to scale them for impact. Terrific. Sounds like you and Ted had similar crib notes. Fantastic. All right, Jay, does this make sense? Yeah, I mean, speaking of the audience and thinking about the social entrepreneurs, especially that are looking for the types of finance, there are a lot of themes actually cut across that came on the side of the table too. And there'd be no shock to you that we have probably had more questions than answers coming out of the entrepreneur side of the house. One thing that came up as a theme was this notion of understanding place-based context versus vertical contexts. So there was an example of someone who said, hey, I'm trying to raise money for what was happening in the emerging market, but I'm trying to attract capital from the US. Now, by the time you take into account foreign exchange rates, infrastructure challenges, I've already lost half of that money to begin with, right? How do we take that into account when we're doing investments? And what challenges are we issuing folks in a place-based environment to really think about new ways of doing capital in that environment? There was a theme around perception of impact zebras, right? That folks are, you know, there's this just big disconnect between the investors and what zebras are trying to do. There was an example of, you know, when you first start and you have this great idea, folks in the philanthropic sector love you because you preach impact, impact, impact. And then at some point, you need real capital to actually go do the work. And then you have to kind of start switching your language to the investor side and that switch is not so easy. It is hard. And then the investors start expecting things actually maybe counter to your impact. And what's that missing middle is what we need to really solve for. And the theme here is maybe the traditional investor is not the answer. Maybe new things to be created to really solve for that problem. There was a big piece around just who's responsibility is it to really reimagine what access to capital looks like for zebras. Often it's for the entrepreneurs to go look for the capital, find the right people, right? Come to the conference and scoop people out. And there's a different question around what is the responsibility of folks with the money themselves? To actually educate themselves more properly on the different types of capital that exist. If you're the philanthropic side of the house, what do you know that the entrepreneur you're putting money into has to face in two years, three years, four years. Now do you partner with them to get to that place at some point and make sure they can avoid pitfalls responsibility to back on investors and funders to really understand the long haul that exists in that valley, right? An entrepreneur may have to pivot one or two or three times to find the right product market fit. If they have to go find a new investor every time they make a switch, that's a problem in itself. So what does that long-term relationship look like? Another is around just the instruments in general. I think the general sense was there are a lot of different instruments flying around, right? They work in some cases, they don't work in some cases. Sometimes entrepreneurs are taking things on too soon and then it messes up for the next investor that wants to come in. But where are we learning about what's worked and what's not worked? Where are we sharing these stories so we can actually learn from them and maybe redesign around them. And right now it doesn't seem like there's a place for that that's readily available. I mean, the last piece I mentioned is just around just more creative capital use. In Baltimore, I know there's a lot of conversation around how do you entice the public sector to set aside some money for a loan loss reserve for all the different lenders that exist, including CDFIs, right? So that we can all have some security and actually have less anxiety about putting out capital or rate buy-downs and things like that. And how do we think more creatively but also tap in new folks that are usually not part of the conversation? The public sector being one of them. It's all about managing risk there, yeah. All right, terrific. Thank you, Suri. And please even go much more detail with Paul so that he can synthesize it and make it available to everybody here. I wanna thank all of you for being in the room and like I say, being kinetic, giving us your energy. Give yourselves a big round of applause and hope you enjoyed our session.