 Next up, there were a few announcements a few years ago that caused a lot of commotion sort of in this field. When Bain entered this space, when Blackrock entered this space, when Goldman Sachs acquired imprint, these are big mainstream financial players that are entering this space. And I think there's a feeling that this is great news because this takes this to scale, but there's also real curiosity about what does it look like for these large players to enter the impact space. So I'm really excited for you to hear directly from one of the members of the Bain Capital team today. Please welcome Chris Kazone to the stage. Thank you. Well, good morning Socap. It's a true honor to be here and both because I actually look up to to everybody in this room for all the positive change you've created and you've inspired me to in my career, but also because I've learned so much from being at my third Socap and my first Socap, second Socap. So just thank you for being you. I'm Chris Kazone. I'm an investor in Bain Capital's double impact team and I joined the and I joined this team two years ago in the very very early stages and worked on the strategy. Before that I was, I think what we call here, a traditional private equity investor. And the reason I did the transition in between private equity, traditional private equity and this new career was for the ambitious challenge we took on. The challenge which is the problem we are trying to solve is one which is maybe not as I would maybe say unromantically laid out by the lady on this New Yorker cartoon is how can we prove to financial markets that there does not have to be a trade-off in between financial returns and private sector businesses, profitable ones which want to have an intentional social environmental impact. That's not a new problem and frankly this cartoon might be older than myself. But we joined the bandwagon and two years ago my boss, Deval Patrick, was on the stage. He announced that and we're going to take on this challenge and not alone but with the help of the community. In the past few years we've done a lot of work and we've taken a lot of your mentorships so I want to thank you for that and we're at a new place and we thought it was a good time to report back to you. So we've closed our first fund over the summer and we've done three investments and look forward to sharing how our thoughts have evolved and welcome your feedback after this conversation. So where do we focus? What are impact themes? So first, sustainability, the health of the planet. Second, health and wellness, the health of people and populations. And third, community building which is about place-based thesis, job creation for underserved populations. So today I want to speak about where do we play and why that's important. Of course as a bank capital investor I had to show you numbers and charts so I apologize for that and the question here is we looked at the ecosystem of private funds in the in the country, the US focused ones to start with and we realized that 20% of those funds were in the venture capital asset class and that's a key critical part of our economy. It's responsible for innovation and the leaders of tomorrow and more importantly for us in this room is the highest penetrated asset class when it comes to impact investing. Impact investing in venture capital means finding and backing mission-driven entrepreneurs, change the world mindset, disruptive concepts which will be which will in turn be the new leaders of tomorrow and that is critical part of impact investing in the economy today. But stepping back we looked at what are these other 80% and we call the other 80% the middle market. What is the middle market? To put it very simply it's the status quo. It's the US economy. It's pretty much every sector. It's proven mature profitable businesses sometimes growing really fast and sometimes not so fast and stepping back we realized how can we add value to this sector? How can we potentially make it more impactful? And another part which is very important in the middle market is the investment mindset is slightly different. Deals often are majority owned, high governance deals where there's a potential as an investor to have a strong seat at the table with management and we can ingrain our value at a value-add mindset into into our investments. So of course as a former consultant I got you a 2x2 matrix here and at most 2x2 matrix the holy grail is to be in the top right quadrant right and this is not so different. So here we're the top right quadrant what is it? It's businesses which we call have commercial clarity and that means profitable business models proven going concerns and also have mission clarity a clear mission aligned intrinsically aligned with a business model idea. Top right quadrant here are rocket ships they're change the world businesses they're the dream of every impact investor and we'd love if every single business were like that but but it's not always the case and stepping back we thought with 33 years of being capital's experience and being value-added investors and businesses and trying to trying to see what you know how you can grow them better thought is there another part of this matrix where we can play where we can be better impact investors and so if you look at the bottom right here they're businesses which are proven business models which are profitable and going very well but maybe they have mission potential what we call mission potential it's a business where the by tweaking potentially the operations by creating new initiatives we can align the mission-driven management team with creating more impact more positive externalities maybe reducing negative externalities conversely on the top left of the matrix here you know imagine a social enterprise which has a great theory of change but maybe has not exactly cracked what its business model is hasn't reached scalability yet still looking for product market fit and that's where being capital's playbook can help be value-adding so what does this mean for deal flow really and you know what we've we know that you know we're being highly scrutinized we we take that responsibility really seriously if we're going to widen our aperture of looking at businesses and looking at not only to intrinsically align businesses but also some which have potential where we're going to have to be active owners and really increase the impact we risk greenwashing and we're really aware of that so we we teamed up with our cousins from Bain and Company and did a wide bottom-up analysis of the whole US economy we looked at 350 sub sectors and scored them with our internal methodology not only on financial returns but also on how impactful their business model was intrinsically and if there was mission potential and what does that mean it means that it widens your aperture of deals not only before just looking at mission clarity only businesses the rocket ships out there there were about 10 15% of the economy open for impact investing for us looking at mission potential and a value-added approach opened almost 50 percent and that's very exciting but so how do we do it and what's all this blueprint jargon I keep hearing and talking about so a blueprint is is the foundation of our value add and there's no rocket science there it's basically sitting down with our management before the deal and building a strategy short-term initiatives and a long-term plan the key difference in between private equity owners out there and a bank capital double impact is the second box right here we create an impact blueprint on top of the commercial blueprint we look at initiatives which are ingrained in the business model but which will also catalyze positive externalities they'll reduce negative externalities another important point of the impact blueprints is the partnerships the community it's you in this room and what really invites you to reach out if you feel you might be relevant and be able to help us in our investments here our three first investments we teamed up with thought leaders in the industry like Bridges Ventures like the SJF like Pfizer Foundation which has helped us think about the future of the biotech industry and of course we define impact metrics to keep our our management teams and ourselves accountable to to the objectives we set but let me just detail quickly what this means in practice impact fitness is our is our first investment in our portfolio and to put it very simply is a rock star mission-driven management team who is running and operating 13 gyms in Michigan and Indiana those are those are areas we've identified being in the bottom quartile of health outcomes in the US and so we looked at this business being how can we make this more impactful one of the questions which was pretty obvious that they came up looking at the geographies were in is their so-called fitness deserts areas which don't have enough population density to be have economically viable gyms and that's something we felt you know could be a problem we could solve so the first point here is access to fitness it's one of our first target outcomes so we're currently working with the plant fitness franchise or in our management team to develop a new gym box which can fit in areas where they've never been gyms before and that's creating access to fitness what we're tracking is not only how many new members are coming to our gym but we go to the next level we look at what are the percentage of our new members who've never been to a gym in their lives and to in our CEO Chris Kleba's word that would be getting people off the couch and that's what drives them every morning to go to work and that's the type of value ad that we try to bring to our companies so where does this leave us I want to I want to leave you with two key messages number one is we hear a lot and you and with our name you with bank capital name used into the same sentence impact investing is going mainstream what I like to share is if impact investing is going mainstream we're gonna have to invest in the mainstream economy we're gonna have to widen our aperture we're gonna have to create new approaches to invest in every business and the way we've found it that we've cracked the case so far and we really want your feedback on this is is through governance through active ownership through have value added approaches which can find mission aligned management teams in the middle market in the broad in the in the broader economy and help them achieve their dreams and their mission the second part is a call to action to all the traditional traditional private equity and other investors out there get on board please get on board reach out be curious ask questions if you're not convinced challenge us we're really excited in our team and we're we really see this is this as a great exciting fields which it's really the beginning we recognize that 30 years or 40 years or 50 years of thought and thought leadership has been put into trying to crack the case it's very it's very fitting to me that socap is 10 years old this year because it's it's it's a it's a child which is coming to to being a teenager but 10 years away from being an adult and this teenage years are going to be really exciting we're gonna we're gonna grow exponentially we're going to make mistakes probably get in trouble here and there but on top of that we're we're gonna become adults together and we're gonna have a bunch of funds so please join us thank you