 Thank you. Well, at this moment, I'm actually suffering from an old idea, which is the idea of wearing a dark jacket on a very hot day. So please, please bear with me. First, I want to recognize Kevin and Rosalie before they go to the green room on a terrific first day of SoCAP. You know, every year it becomes more and more robust and Kevin was telling me this year we have 1,600 folks here, which is up from just 1,400 last year and probably just a few hundred several years ago. Also, it's a real privilege to follow Catherine and Judith and Anthony. They have been, I think most people who have been in the sector for a while, recognized their contributions, but they really have been true pioneers in the sector and I just want to call that out and give them another round of appreciation for all they've done. Now, and also just remarking on one of the comments, one of the things that struck me, one of the themes was from Anthony and Catherine was this notion of all, use all tools, think about the problem first and we absolutely have that expression amid our network as well, which is problem first, tool second. And one of the great things now that's opening up, one of the opportunities that's opening up, is that there are players who think about it and bring that mentality to addressing some of our most pressing problems. Now, I want to share some ideas today, share some ideas about amid our networks approach to impact investing and these ideas were laid out in a six blog post series published in SSS, Stanford social innovation review online. I'd like to thank SSR for their support in that and my challenge now is to summarize about 26 pages of text in the remaining 13 minutes. So, you know, in the past five years, we've seen really an exponential growth of interest in our, in impact investing. Much of it is focused on the individual firm. Most impact investors see their primary goal as finding and investing in enterprises that yield strong financial returns and strong social impact. And this is a goal we share and and we support. However, we're concerned that relatively few impact investors are doing the hard work that has required to spark, nurture and scale innovations that can eventually attract commercial capital. It's as if everyone is waiting around the proverbial water pump for this flood of high social impact, high financial return investments to come through and nobody's actually doing the hard work to prime the pump. So, we think a fundamental shift is needed from an approach based mostly on finding and funding individual firms to approach centered on sparking, nurturing and scaling entire sectors for a social change. Now, just to be clear, we believe that firms are the essential component of impact investing. Without innovative risk-taking firms, impact investing simply does not exist. And it is the emergence of multiple firms that drives innovation and drives the sector forward. But ultimately, it is the overall health and growth of a sector, not just one firm that will deliver the greatest positive social impact. And this is one of my favorite quotes from Alvaro. Single firms are born, mature, get lazy and they die, but industries prosper over time and reach scale as competition fosters the delivery of better products at lower cost. Now, the only thing that slightly troubles me about this quote is I know Alvaro and I know Michael Chu as partner and I can't imagine them letting any of their firms get lazy. But outside of that, I think they capture the essence of what we're talking about here. So why does this matter? What's really at stake? One way to think about sector development is to look at the so-called S-curve, which tracks market adoption on the vertical axis and time on the horizontal axis. Sadly, a really large percentage of the world's disadvantaged are served by markets that are inherently monopolistic and suffer from limited innovation, poor product quality and high prices. If we shift the S-curve, we can have a massive impact, creating vibrant, innovative and competitive markets that deliver true value to the disadvantaged, ensuring that socially beneficial products and services reach millions of more people more quickly. And this is not just a dream, this can happen and we've witnessed this in microfinance. We're now based on an idea, based on an innovative idea. We have 200 million people who are historically precluded from mainstream financial services who now have access in a way never before. I want to make one other point on the S-curve, which it's not just getting the innovation started, but accelerating that innovation that's of great import. In microfinance, there are additional five or six million people reached every year. If you can just do the simple math and accelerate that by four or five years, you're going to impact another 20 plus million people. It's not just about microfinance. I think a lot of us in impact investing are inspired by the microfinance story, but we want to see more. We're thirsting for additional examples of innovation that are driving entire new sectors. And here are three that I offer for you to consider, solar lighting, mobile payments, and primary education. These are but three where we are actually seeing massive market opportunities in terms of the people we can serve, and also cutting edge innovators who are poised to make a massive difference. So how do we prime the pump? Such that we can spark, nurture, and scale up these great innovations that create entire new sectors. We think there are four critical things that we need to do. First of all, we need to go early stage with investments in innovative firms and also infrastructure organizations. There's talk earlier about the importance of the broader infrastructure. We need to think carefully about something we call total firm value as well as the issue of subsidy. We need to invest in policy. Again, one of the themes from earlier politics and policy really do matter. And importantly, we need to shift the capital curve, bringing more resources to early stage investing, infrastructure, and policy. So I'd like to go back to the S-curve to outline why we believe early stage investing is so important, because new sector development actually begins with the firm, specifically what we refer to as a market innovator. Market innovators are the entrepreneurs that bring breakthrough products and services to market, often in incredibly difficult circumstances. Once an idea has been de-risked and begins to take hold of other firms that we call scalers, enter the market, join the market innovators, and take the idea to scale. Over time, the scaler's business models become more predictable, more consistently profitable, and thus more easily financed. Eventually, scalers are able to tap commercial capital markets, helping them reach millions and helping the sector really take off. Though scalers are important, nothing happens without the market innovators. And while innovators may scale themselves, their biggest contribution actually is the innovation, and that's contribution, and the innovation's contribution to sector development. I just note that Grameen's biggest contribution to microfinance wasn't the 8 million borrowers that they currently serve, but rather the idea of microfinance itself that is now scaled up, as I said, to serve 200 million. So the firm is important, but the firm also exists in a broader context, a certain market infrastructure, that I think is also critically important to market development. And a few years ago, we commissioned a study by McKinsey and Company that looked into the development of the medical technology sector in India. And one of the things McKinsey looked at is the infrastructure and what would be required to create a proper infrastructure environment in which MedTech in India could really take off. And they came up with several things that were absolutely critical, consumer education, technical skills, market standards, and access to credit. And this may seem not to be terribly glamorous stuff, but it's absolutely crucial. McKinsey estimated that if you could do these things and other things to accelerate the development of the market for medical technology in India, that could result in 2 billion more treatments by 2015, 2 billion more treatments by 2015, which could clearly be a matter of life and death for many people. Now unfortunately, impact investors tend to underinvest in market infrastructure, just as they underinvest in market innovators. Now much of this investment is due to relative return expectations. Market infrastructure organizations and firms in underdeveloped markets tend to be low-return businesses are not for profits. And innovators range along the returns continuum, but are inherently seen as riskier, highly variable, high-beta kinds of investments. Scalers however offer the prospects of lower risks and higher returns, not surprising where the capital will flow. Now a media network has evolved in the way that we think about our grants and investments. Historically, we did embrace sector development, and we also embraced what we call flexible capital, the notion that we would invest in grant capital, and we would also invest in individual firms. But in the early days, we actually did not, we expected all of our investments, all of our for-profit investments, to generate risk-adjusted returns. Because we felt that if we did not, if we relaxed our return expectations, that we would potentially distort markets and introduce sloppy investing. Over time however, we realized that if we did not consider the value that the firms are delivering to the sector, that we would systematically underinvest in market innovators. So this led us to this concept of total firm impact, total social impact of a firm. And the notion that the total social impact of the firm is not just a result of the individuals that it directly serves, but also you also need to consider the impact it's having on moving a sector. So this led us to actually loosen our constraints around always demanding risk-adjusted returns investments. Now our investment in Bridge Academies International is a good illustration of this approach. So Bridge Academies, I think many of you are aware, has developed a chain of 80 plus schools that serves the base of the pyramid in Kenya, fabulous education, about $4 a month in tuition. And when we initially looked at Bridge, we actually were not terribly optimistic that it would generate risk-adjusted returns. But we looked at each other and said, you know what, even if it doesn't generate risk-adjusted returns, even if it breaks even, here is a pioneering model that could fundamentally impact the way that education is delivered in the developing world and fundamentally improve the lives of millions of students. And not just through Bridge's own efforts, but we felt that Bridge, by pioneering the model, would inspire entrepreneurs around the world who would take up this innovation, improve it, and serve many, many more millions than Bridge ever could on their own. Of course, if you're willing to accept lower-than-risk-adjusted returns, then you're effectively providing a subsidy. Now this recognition sparked a really vigorous debate within a mid-air network about the desirability of subsidies. And I don't have time to get into particulars. You can read the blog posts, I suppose. But suffice it to say, it's a really complicated set of issues. And we think this notion of total social impact of the firm is one sort of governing issue that I think should influence the way people think about subsidies. And there's a couple other really important issues, which are the size of the market of the firm you're supporting, the size of the market they're trying to address, and the disposable income of the customers that they're trying to serve. And obviously, if you're engaging in a market that is relatively large, with relatively prosperous customers, then you probably don't need a subsidy. And a lot of our efforts, a lot of our investments in mobile payments sort of fit that bill. On the other hand, if you're investing in a relatively small market with a relatively poor customer base, then perhaps subsidy is in order. And for us, a good example of that is our investment in BRAC microfinance in Sierra Leone and in Liberia. Now, so we've talked about two tools to move sectors, innovators and infrastructure. A third tool, policy, is also important. And I think it's particularly important to recognize that if you are serving a disadvantaged customer base and you serve them poorly, then you don't succeed. If you serve them well and you generate a profit, you could still fail if your efforts are not aligned with the policy environment and with politicians who feel that they are acting in the best interest of the disadvantaged. And a good example of what can happen if we get policy and politics and relationship with government wrong is Andhra Pradesh in India, where the microfinance crisis and the fallout resulted in 10 million fewer people having access to microfinance services. And by the way, this is not a one-off. I think this generic issue of being conscious of the implications are in the importance of developing good relationships with government is absolutely critical. Now, thoughtful, well-informed government policy can actually accelerate the development of market. Government has three roles, I think, in particular that are important. First and foremost, ensuring a vibrant competitive environment because there's nothing like competition that will drive costs down and quality up. Secondly, establishing appropriate regulation, which strikes a balance between consumer protection and spurring innovation. And third, fostering an entrepreneurial ecosystem where the entrepreneurs feel that government is promoting their efforts and helping them succeed rather than hindering. Now, one good example that we recently came upon of a government policy that is actually promoting the development of the sector is in Bangladesh with solar home systems, where the Bangladeshi government is actually providing credit facilities for families to put installed solar home systems. There are already 750,000 home solar systems installed in Bangladesh, and there are 30,000 more every month. Now, at a many of our network, we focus on spurring sector development, and we've consistently done this. In microfinance, for example, we've invested $100 million across 27 organizations across the spectrum equally split for profit, not for profit. We're taking a similar approach to our work in developing world mobile payments. And you see here, we supported a number of incredibly innovative firms, but also organizations that are providing a robust infrastructure in a strong and improving policy environment. Now, we prefer investing in early stage catalytic enterprises and infrastructure, but candidly it's a lonely game. While there are billions of dollars going into firms that can generate risk-adjusted returns and high social impact, there are relatively modest amounts of capital going to early stage innovators. Now, I think if you look at the capital curve and the capital continuum, there is opportunity. I think commercial capital markets as discussed have the potential and will continue to take ideas that have already been de-risked that are commercially viable and really help them scale up. I think development banks and institutions also have a role. Historically, they have supported commercially viable firms that were not yet able to tap the capital markets. And I think Judith referenced USAID and OPIC and DFID, a number of development agencies that are trying to go earlier stage, and that's a promising development. US foundations, meanwhile, have the biggest pool of grant capital. They deploy $47 billion a year, most of that in grants. And they are familiar with and quite adept at thinking through a broad set of issues such as policy and infrastructure that help move a market along. Two last slides, Kevin. He's trying to get us all out of here into hopefully cooler surroundings. One other really interesting potential source of funding is ultra-high net worth individuals. Now, these numbers are absolutely stunning. The Forbes richest 400 Americans alone control $1.7 trillion of wealth. Just the Giving Pledge members control, and there are about 90 plus of them, control $433 billion of wealth. And these are people who in many cases have made their money through business and through innovations and many of whom embrace market-based solutions but have a philanthropic mindset. So we're quite helpful that they will join the other capital providers in providing this sort of flexible capital that helps the market move forward. So to wrap up, the challenge ahead of us is as urgent as it is critical. As noted, a large percentage of disadvantaged are served by markets that are inherent in monopolistic and suffer from high prices and low quality. However, I do think we can absolutely change this picture and we can prime the pump for real sector level change if we can invest earlier stage in innovators and policy and infrastructure that can serve and create opportunities. And I encourage you to read our blog post. They are on the thumb drive and I hope that some of our ideas here will spur further discussion and insight and we look forward to the dialogue. Thank you very much.