 First we have John Kohler here, who's with the Miller Center for Social Entrepreneurship, esteemed career in Social Entrepreneurship and funding, BC as well. We also have Morgan Simon with us, founding partner of Candide Group and author of the book Real Impact, The New Economics of Social Change. And we have Kate Byrne, who is the Chief Growth Officer at Good Light Capital. So, esteemed group here, and they put in the work to curate the track, the whole Social Entrepreneurship track. So we thank you for all of your help doing that. And at the end I'm going to ask you which sessions you're most excited about, so be ready. All right, let's dive in. And if you have questions, I believe there's paper over there and pencils to write your questions. And back there they will collect your questions, rather than doing a hand raising, we'll collect questions via paper and then do it that way. So if you have questions, go that way. So as we see, the theme of SOCAP this year is Facing Urgency. This is a really unique time in for Social Entrepreneurship. And that's for a number of reasons, but it's a time that really requires urgency to capitalize on what's been done to date and really advance the field going forward. And I think that's why we're all here. So to start us off, I'd love to hear from our panelists about how you would characterize the state of Social Entrepreneurship today. And we'll start with Kate, but make it a conversation. Is this, yes it is. Hi everyone, great to have you here and thank you so much for supporting this work. To me it's an incredible time because for so long many of us have hoped that entrepreneurship and social entrepreneurship would just be one and the same. In fact, it would be redundant. And I believe we're right there and why? There's a whole generational change. So those who are in fact becoming the social entrepreneurs have are so much more purpose oriented. I think there's a generational change with the money and those who are doing the investing. I think technology such as generative AI is leveling the playing field and enabling social entrepreneurs to punch above their weight. And frankly, the social entrepreneurship, entrepreneurs are doing something that's so important and that's collaborate. You don't have a ton of ego in the game. That is such an advantage. You're coming from a place of heart, not hubris. Which means you're realizing, hey, we can partner and by two or three of us getting together, we can make so much better in road and so much faster. And then finally, I would also just say from a geographical standpoint, there's so much work being done locally and that's being taken very seriously. And as such, we're starting to get all the parties, government, universities, policymakers, and corporations involved. My goal, my hope would be that one day, who knows, perhaps a way of making corporations, in fact, more intention oriented, to have them work with social entrepreneurs so that they become more purpose driven themselves. That would be, I think, a very trustworthy way of doing it, much like how they do with innovation. IKEA has been doing a great job with this since 2012. Well, what's great is I had originally thought this question was just going to Kate and it means that I get to give my authentic off the cuff answer, which is going to be kind of the other side of that coin. Which is I do agree in general in terms of all of those kind of trends and foreign momentum of what we've built over the last couple of decades. But if I were to speak to really the current state in this moment, of what I see from a lot of social entrepreneurs is pain and struggle. And that these markets have just been incredibly complicated, that we're seeing that not just for social entrepreneurs, but for entrepreneurs in general. But the challenge is that we often see for social entrepreneurs the presumption that it's because they tried to do something different, right? As opposed to acknowledging that these are challenging times that we're all facing together. And that doesn't mean throwing the baby out with the bathwater, which I think is an expression John first said to me many years ago. In saying that we need to find ways to come through this as a community, just as we're all trying to figure out how to do business in a different way together and have to be aware of the current moment and how I know for a lot of entrepreneurs to try to present with a happy face when you're trying to raise money, when you're dealing with real crisis in your company is awful, can have incredible emotional toll. So I think it's a moment for us to have that honesty with each other. In terms of just being able to say sometimes it's hard. And for those of us with portfolios that are really struggling right now, it's hard to remain in right relationship, right? And what are the times when we aren't able to support with additional capital? So I want to allow the hardness. I think one of the challenges we've had is an impact investing in social entrepreneurship space over the decades is we fought so hard just to exist that sometimes when things get hard we don't want to talk about it too much because we're still kind of grasping onto our space. So I want to allow this current moment to be a little bit challenging. And I feel strongly that we'll get through it together. But currently it's feeling hard. Yeah, do you want to add anything? Yeah, sure. So hello everybody, thank you for joining this session. I get to wear a couple of different hats. One working with entrepreneurs and the other working with fund managers and investors and it's quite rewarding in this particular field, this impact investing sector. I'll be the bread, I think, in this sandwich. I would say there has never been a better time for entrepreneurship. There are more resources, there's more content available to help people get started with a great, if they have a great idea, how do I build a company? How do I get this started? Where do I go for extra resources? And even a much more vibrant angel investing or early stage capital as a resource to help them breathe life into their dreams. The flip side of that is I admonish entrepreneurs to be entrepreneur 3.0. And what I mean by that is, as Morgan just pointed out, social entrepreneurship, we were just kind of hanging onto it, trying to prove the point that it could happen. And that at the core of a company's function can be environmental or social good that's measurable and authentic. And so there's a number of different ideas. Entrepreneurship 2.0, social entrepreneurship 2.0, was to go to school on the 1.0 and if you were an entrepreneur with a new idea, make sure that it's a new idea, not a retread of an old idea. And if it's a retread of an old idea, or perhaps an extension, did what worked and what didn't. And so that you could actually be more successful in bringing out a successful entrepreneur or enterprise. Entrepreneur 3.0 is what I would say is today. And the 3.0 is how do you scale those good ideas? So I really would hope that we can move fast to scale the best ideas so we can improve our impact. I like that sandwich, the positive with it is challenging. And I think all of that can be true at the same time. Can we add just one thing? Yes. Really quickly, I promise we won't stay on this question forever. Completely agree. And the beauty I feel for the social entrepreneurs is, because you don't have as much ego, we're counting on you to be transparent, right? I mean, you're measured at a much harder rubric than anybody else. So I feel as though, as Morgan says, admit it that it's hard. That's okay, and you're sharing your findings. And through that sharing, that's how we can continue to move forward. So. No, and that's fantastic actually because it leads to our next conversation, which is really that amidst all of this context, we really need to be thinking hard about the conversations about optimal models and expectations of social entrepreneurs. And really thinking, well, during our discussion to prepare a couple weeks ago, you all mentioned a couple of things that I want to make sure I get right here. But really the idea of keeping prosperity closer to where value is created. And who makes the decision matters? And so I want to take that up really as we're thinking about social entrepreneurship. I'd like to hear your thoughts on this idea of non-extractive finance and inclusive forms of social entrepreneurship. What are you seeing and what are some of the lessons that we're learning? Yeah, we can start with Morgan. So my daily work essentially is with families and foundations who want their money working for justice. And there's two phrases that often stick in my head as we do that work and that I don't think we've resolved, but that I think are questions we keep present. And the first is the idea of nothing about us without us, which you often hear in social movements. And this idea that we need to both as entrepreneurs and investors create opportunities for communities to engage in design and governance and ownership of enterprise. And that with that contributing to the idea of non-extractive finance, which is very simply that we should be contributing more value than we're taking out of communities. Because if not, we're basically taking systems that are incredibly unfair and making them slightly less unfair as opposed to really looking at what structurally needs to be done differently. So with our investments, we try to literally measure, are we putting more value into communities that we're taking back out. It's kind of a key metric of how we think about what it means to be in right relationship with communities. The other expression that comes up a lot is the idea of the golden rule, which is very simply that the one who has the gold makes the rules. And that often means in the context of impact investment that very well meaning wealth holders are making decisions with deep impact on the lives of other people. All the time, every day. I am certainly extremely guilty of this. And it means that we've been trying to do more to set up participatory structures. So at Candy Group, we have two debt funds, Olamina and then Afterglow, a climate justice fund that's just launching where we created community advisory boards where these boards of experience, activists and practitioners have majority decision making power on the investment committees and veto power over investments. And it was a way of saying the people in closest proximity to problems are the ones who are going to make the best decisions about solutions. So we're starting to see more savvy asset owners and investors saying, rather than me making a bunch of little decisions of how to build a portfolio, I'm going to make one big decision. And that decision is to give over decision making control to people who are closer to the issue. So I think that's where it's thinking about for entrepreneurs, what are the ways that I can be community accountable in my work? And for investors, how do I think about that down to the level of who's getting to decide? John, do you have anything, John? So I'll take that, maybe the value chain part of that question. So leaving, from an entrepreneur's perspective, leaving more prosperity in the community that creates the value. Smallholder farmers, co-ops and so on, is often a great way of achieving impact and a great way of amplifying what could happen and also make a company out of it. Morgan and I both have investments in companies like that. And so an entrepreneur will view it as, okay, how do I do better soil amendment in particular agricultural concern? How do I get the co-op to do more field side processing to leave some of the value, more of the value at field side or at harvest? How do I have financial services come in to help the farmers bridge between harvest periods so that they don't have to sell their crops too early? How do I connect the demand and do the bagging and tagging and supply chain transparency that international purchasing would require? And how do I do the grading of the product quality? How do I do the education to the farmers in terms of better practices in the field? All of that is a great vertical way of addressing a value chain, so to speak, disintermediation of who actually makes the profits. Try to leave that middle man out of it as best you can. There's a fund manager's perspective, which could be a little different. The value chain being more like AquaSpark, you're familiar with. The value chain being, wait a minute. If I'm going to look at how the actual inputs are created, if I'm going to look at how the education and the finance happens at a particular producer community, if I'm going to then look at cold chain or other kinds of intermediate steps about how product gets to market, I'm not speaking all agriculture, but this is true for any number of products or sectors, all the way to final consumption. If I'm a fund manager, I might want to be assembling portfolio companies that I've invested in who are co-supportive of each other and who give insights across that horizontal value chain aggregation, not just a vertical one. So let's take that piece. I love that. I like the idea of thinking differently about how your portfolio looks, how you're supporting the whole system and the value chain. And thinking about that actually, there are, we've talked about a number of new models and pilots on funding and entrepreneurship and moving the field forward. And specifically, I think lately, we've been hearing in the news about the Fearless Fund. And Morgan, I know you've written about this case recently in Forbes. And so I'd love to hear a little bit about what's happening, broader lessons we're learning, and really what the response should be from the social entrepreneurship community. So yeah, the last, I guess five or six years I've served as a senior contributor to Forbes and just have been grateful for the opportunity to get to share more social justice stories within the finance community. And I'm not sure, I'm actually curious, how many folks have heard about the Fearless Fund case? So about half. And this is essentially a lawsuit about providing grants to businesses led by black women. It's actually the tip of the iceberg in that there's now additional lawsuits to Hello Alice, to Lyft, to Ceres. And a tip of the iceberg in the context of a broader attack on the movement for racial justice. And the idea that in order to work towards racial justice, we need to be able to talk about. And essentially that in this lawsuit it was saying that you weren't supposed to be using race as a criteria in terms of giving out grants. And a lot of people are seeing that that could also potentially apply to how investments are made. And certainly a number of the funds that we've supported as Candid have specifically focused on black, Latinx and indigenous entrepreneurs. And that is something we intend to continue doing. So I think it's important to acknowledge the response from some investors been to say, I gotta back up, I don't know. I gotta think about this thing. Can I really continue to invest with a racial justice agenda? And I would say that it's never been more important to continue. And there's a quote that's often misattributed to sometimes to Gandhi, sometimes to Mandela, but let's say something for important social change leaders of saying, first they ignore you, then they laugh at you, then they fight you, and then you win. And that sometimes we have to remember particularly, and I've certainly been in this camp before, people often talk about the right to comfort as one of the habits of white supremacy. And the idea that sometimes we have to be okay with the idea of we have to fight to achieve things. This is going to be part of the process. And then it's an important moment to remember it's okay to fight for racial equity, and it's okay to talk about race, or not even okay, it's essential that we do that for all of us, for all of our sakes. And from that perspective, the response from many others has been to say, let's make sure that we continue to push forward in a racial justice agenda to talk about race in the way that we invest. And also to make sure that we are building some of the legal resources that we're going to need on the presumption that this will be a long fight. So there is a legal fund that's in formation. There's also been some interesting legal analysis that's been done, for instance, particularly for debt funds of some of the ways that you can structure this to feel comfortable moving forward and having explicit racial thesis. So if people are interested in learning more, I'm happy to talk to people more about the specifics of it. But I think the general note is just to be aware that this is happening, that we don't get to operate as in a vacuum as we're starting to kind of move more into the mainstream. It's reasonable that we're going to get attacked and that we have the resources within our communities to fix it. And the other piece that feels kind of personal to me in the context of watching this go down, as some people know a couple of years ago, I personally and my company was sued for $55 million by a private prison company for defamation, once again for statements and forbs for simply having said that prisons separate families. And I know that's ridiculous because they do categorically, right? And we won that lawsuit, but it took years, it was painful, it's challenging. So we do need to also acknowledge that people are going to struggle and that we need to be there for them. We need to make sure that we're proactively offering that support. So obviously I'm pretty fired up about this. I'll turn over the mic. Thank you about the laughing at you and the fight and then you win. I mentioned I'm a professor and one of the things that my students say is, but there's so much backlash right now and to me that means that we're on the right track, right? Yeah, Kate or John, anything you wanted to add? I was actually, whoops, yes. I was actually going to go right down there because that's sort of, I've spent my life being that grain of sand in the oyster and that's how change comes about. And I don't know if anyone saw Unshareable, the movie that was playing the other day, it was a great movie. Be that trim tab, right? They spoke about the trim tab, which is the rudder on the rudder and that little rudder has so much power and it can drive the change and that's really what I see social entrepreneurship as. It may not come about as quickly as we'd like but don't kid yourselves, you really are making a change. At Goodlite, we have personally felt this backlash because we are black and female run and it's been very difficult for us as a group to get our own funding. The good news is we continue to fund everyone that that entire population and we'll continue to do so, so. That's fantastic. I want to go back to something, Morgan, that you said at the very beginning which is just about the difficult environment and I don't want to ignore that. I want us this to be a beacon of hope but I don't want to ignore that it is hard right now and the funding environment is difficult but there are also emerging trends to watch. So, John, I know you mentioned earlier that you worked with fund managers. How are they seeing the investment climate today and how is that climate impacting social entrepreneurs like the ones in this room? Okay, let's see if this worked, there we go, all right. So, a couple of things. If you said what would be my message to entrepreneurs, it would be survive. I don't think this is a long-term message but I think right now the funding environment is a little difficult. In fact, there's quite a bit of maybe hesitancy from fund managers. I would love to hear how you two are seeing this but people are a little bit concerned about whether it's external events and conflict but also there was, I think probably a digestion issue where there was a lot of money in the market in 2000, 2001 even up to 2002, sorry, 2022, 2021 and 20 but that's kind of fallen off. I was just with two fund managers yesterday both operating in Africa and they say that their experience is that it is one fifth of the amount of capital available to entrepreneurs today as opposed to 2022. One fifth, that's an 80% fall off. If you look at chart R or Carta or Pitch Book you can see the same kinds of data which say there are a lot more down rounds right now than up rounds and there's just not a lot of capital being laid out there. It's not just impact investing, it's all investing so it's a real concern. So, I wrote to somebody not too long ago and I said, look, I think it's time to pull out the Sequoia Capital 52 slide admonition to their portfolio companies back in the financial crisis of 2008 where they basically said, cut your burn, survive. This is gonna be tough for a few years. Don't expect to be able to raise capital as your way out. Be profitable as best you can and survive and I think that that's probably a good note about how hard it is as an environment right now for people, okay, yeah. Well, I was just gonna say one of the things that we really are doubling down on is the wisdom of the crowd. So we're in the process of creating a number of community evolution funds where it's got a much lower entry fee investment and getting as many people involved that mirror those who have historically been underrepresented founding companies to become in fact the funders. And I think that's the piece that will really drive the change that we're all hoping to see. And at the same time, we have talked a little bit about how difficult it is, but when we were talking a couple weeks ago, you also talked about how there are a number of trends that you're seeing in the funding space. And so I'd love to hear more about those and what that might mean for the social entrepreneurs that are out there in the audience. Okay, I'll just do a quick one. You go, we'll wait. All right, so there has been a mismatch of capital. I took mental note that you have debt funds, you know, as opposed to equity funds. And so we have misapplied venture capital mechanisms in impact investing to the tune where if we have an equity investment, we need an equity liquidity event in order to get out of that. What is that? Well, that's an IPO, that's a merger or acquisition. And I think that that's antithetical to a number of the, to most of the aspirations of any social entrepreneur, meaning that they don't want to flip their company. And more importantly, they're not seeking global domination, they're trying to solve a problem, which at best is regional and maybe sometimes more than that, but they're trying to solve a problem. There was a presentation earlier this morning at the Miller Center showcase with Sistema Via Balsa. They call it Sistema Bio now and they're raising some more money. And I think that that's probably one of the few who have gradually over the last 10 years, gone out and scaled to a point of where they're in multiple continents, but that is not usual. So I would say that the theme I've seen is much more of an embrace by investors to use structured exits, to use debt, to use mezzanine or other kinds of investments, or even to change the structure of their funds. So in two ways, one is to be a close-ended fund and then trade on that asset value as an sort of evergreen effort, AquaSpark being an example of that. And then the other is to be opportunity funds. So they might have laid out in a series of investments, those are still percolating and now they create an opportunity fund which is going to cherry pick some of the earlier portfolios and continue to propel those companies going forward. One of the axioms of venture capital is you don't necessarily make all your money because you're the best company picker in your first investment. You make it your money by following your winners. And I think that the opportunity funds are part of that logic being applied to impact capital. I think following up on that in terms of diversification of goals, that that's part of really what is the purpose of putting capital out into the universe and what is the purpose as entrepreneurs who could be doing all sorts of other wonderful things with your lives to be choosing what can be a really challenging path. Part of that is we think about what's the way that society could be structured differently. Going back to what I mentioned before about how do we better engage communities in design, governance and ownership. A lot of what we're seeing that's quite interesting lately is real innovation on the governance and ownership side and saying that whatever the business might create in society, being more thoughtful about who's going to participate in those profits, who gets to be part of the decision making and whether that's worker cooperatives, whether that's ESOPs, whether that's perpetual purpose trusts that these are a number of the vehicles that we've been a part of supporting. I would invite folks to take a look at the work that Oberon that Joseph is doing and might raise his hand if he's not too shy. But really there's a lot of incredible thinkers in our community who have been convening to really try to delve into that question of how do we want the productive means to be owned and what's going to shift. So we've been really excited to get to support a number of those innovations. The other piece that I wanted to note in terms of where we're starting to make some ground in funding trends but I think need to continue to push forward, it's interesting even if we talk about diminishing funding environments, I was reading recently a study from Crunchbase that 70% of entrepreneurs over a five year period were all Stanford grads, white men, and that funding for women was less than 10%. Funding for Latino founders less than 2%, less than 1% for black founders. So the starting place that so many of us are at from a funding environment is so abysmal, right? In terms of proportionally where we just stand in society. If we're even not talking about people often say prioritizing, it's not even that, it's saying if we started from what are the national demographics and could we try to even match that as funders, as our starting place. That would mean significantly needing to shift how resources are allocated, even if resources were more scarce. If we were able to double triple those numbers, I think that we're able to have that sort of reorganization even in the context of a scarce or funding environment. And that that I think is leading towards some really great investment decisions and opportunities. I think that that's the other thing to be clear of. What have we been missing out on if 70% of investments come from just one university? Which is a fantastic university, but there's many more out there. And the thing that's funny about that is I was just recently reading that 60% of venture funding actually comes from New York, San Francisco, and LA. That each of those areas have cities that represent 60% people of color. And if they even just started to support that group alone, the gap would diminish in 10 years and that would be such a positive step forward. But what I wanted to share is for the entrepreneurs in the room, bup, bup, bup, bup. Don't forget, don't give up your power. This is a two-way interview and I know that's easy to say or seemingly so when things are good, but when it's really, really hard, the temptation would be to take money at all costs. Don't, because in the long run it could really easily cost you your business. I would also say educate yourself on what type of investor you need, and that seems simple too, but I can tell you right now, I've had so many people come and talk to me about, oh my gosh, I really want some venture money. You're not even, no, no, no, no, no, no, no. Believe me, you don't, you don't. Not now, not for where your business stands at the moment. Because a lot of social entrepreneurs, to your points, it is a huge problem that you're going to solve. So a lot of people look at that as, wow, that's risky. It's gonna take me forever to get a return on my investment. So angels and angel networks who are starting to go together and giving venture capital a run for their money, I believe would be even a better resource for you because they are risk as their game, they know. And also there tend to be a lot of women and women are community minded. Some men are too, I know, I'm not saying you aren't, but just in natural, it just seems that, there's a lot of statistics to the point that a lot of women-led companies end up impacting the communities around them overall. I like that, and that's really useful in thinking about the different forms of capital that might be out there. And Morgan, as you said, the different goals of different capital, are there any other thoughts up here maybe on different types of capital that social entrepreneurs should be looking at that maybe they haven't been in the past? I know this is like. John, you had talked about blended capital. Yeah, so there's a couple of things that I would answer that with. One is that in my work, I've seen such a broadening of participants from NGOs to foundations to others taking a sort of business and investment approach to what otherwise would have been programmatic approaches to some of the stubborn problems that we have in the build economies around the world and to support entrepreneurs and so on. And with that, I think, has come this idea of a layered capital, blended capital. I don't see any convergence as an organization out of the East Coast at New York that has done a great job of sort of teasing out what are the mechanisms and examples that we could look at to understand how does blended capital actually work. I don't think it's down to the angel investor network yet, but I'm hoping we can push that down and I have certainly been beating my tom-tom to say let's try to figure out how do we make this even more applicable to early stage financing of entrepreneurs. But I do see that there are, because of the broadening of participants coming from international NGOs, coming from foundations, coming from corporate, some corporate organizations, I think that they also have those two pockets where they put in investments, but they can also put in some of the grant funding or at least concessionary capital. And if you can put those together, coterminous with the financing, that tends to be a way of propelling young businesses forward. So that's one of the answers I'd give. I definitely agree that blended capital creates amazing opportunities and it points back to the concept that different flavors of money have different expectations in terms of do I want a negative 100% return, which is a donation, is there something in between there? And that one of the things that we have to start with for ourselves as investors, and I would say for entrepreneurs, to invite a collective conversation about as well, is with any investment it's the how much is enough for me and based on what? Am I a first generation wealth holder and I need to make sure that my kids are gonna have money for college? Or is it that I've achieved my this is enough for me number and I therefore want to prioritize building wealth for communities who have not had that opportunity and therefore I might choose to distribute the profit that comes from something in a different way. So it's not saying that we have to back off from saying we can't make profit or profits not good or you don't wanna be efficient, but let's think more thoughtfully about how do we wanna distribute that based on the objectives. So to give an example of that, one of the companies we've supported is called Navajo Power, which is building utility scale solar for the Navajo Nation, and then also creating off grid solar for local residents. And in that context, we knew if they had gone to traditional kind of venture debt, probably at the time would have cost around 12%. And we were comfortable that this group of investors involved doing more like 2%. And we thought about that 10% is what we called the mission delta, right? Which was the difference between what the market rate would have been and what these investors were comfortable with and made sure that those funds were specifically designated for direct benefit of Navajo Nation members. So to make sure that the benefit was broader than just the entrepreneurs who founded it. It is a majority-native-owned company, but the idea of saying it can't even be that small group. Really thinking about the nation as a whole. And it was saying that maybe 12% is the right rate, but 12% to whom, right? Who actually needs the money at that moment? Now in a different set of actors, it might be different, right? And that's a slice of capital. There's other slices of capital that's gonna come in at more traditional rates. But that's where I think we have to take a moment for ourselves to proactively make that choice. Is this, what is the return that I need as an investor? And if I'm an entrepreneur, what are different types of returns that I might wanna offer to people who have different motivations, right? And to be open to the idea of multiple motivations being part of a capital stack, which I think eventually leads us to measurement, right? Like how are we measuring and switching, or I'd say expand ROI to be not only return on investment, but really as we've been talking about return on impact and what type and what questions. And I think it is so easy for us to say, oh gosh, there's gonna be a one-size-fit-all, but we all know there is not one-size-fit-all, really, at all. Thank you, thank you. And I like that thinking about the blended capital and the different motivations of different investors is useful. So one quick note is that I have just a couple questions left, if you have questions for our Q and A, please write them out, and we have some people who will pick them up if you raise your hand. So my, I wanna move us towards actionable steps. I wanna moving forward, you know? So I wanna hear from each of you what advice you would give to social entrepreneurs right now in this context that we started this whole session with. Okay, well I think I said a couple of them, so I'll reiterate, survive is the first one. The second is don't be a retread of an idea, try to be additional in the value proposition you're putting forward. Our experience at Miller Center and my experience as an investor is that there is no business model that can't use improvement, so definitely take advantage of the enterprise growth services and other resources that are out there. The final point I would say is you have to focus on the justifiable ask. And so swirling around this session has been, there's different capital vehicles, it's not all just about equity or safe notes or something else. Know exactly that the promise that you're making to your prospective investor is one that your business model allows you to meet or deliver. So that would be a piece of advice I would just, that's a loaded question or a loaded statement. So you gotta really think deeply about your justifiable ask, what the promise is that you're making and that you can deliver back, otherwise we'll all fail because we don't have reliable returns from impact investors. And I would just absolutely agree with all of that and I was really lucky to get to be a co-founder of Tonic with John and just learn so much from your experience and I hope that the entrepreneurs in the audience make sure to bother him because he's a tremendous coach and just has wonderful experience and particularly in the context of knowing all these different structures and think it's a really important point. But it does often take that type of experience to really be able to navigate. Exactly. I think one of the things I certainly know in having my time as being a young woman CEO, often being deathly terrified to share when things were going wrong and feeling like I wasn't gonna get a second chance and that I couldn't admit to anybody and just had a lot of tearful nights in hotel rooms to then smile the next day and go back to the conference. And I think it's really important to know if you're not transparent people can't help you and that one of the things particularly entrepreneurs often in times of challenge will kind of be less communicative and if anything that's the time to be more communicative that we've had entrepreneurs when they make sure to be more communicative they're letting us know weekly, bi-weekly just that short update of what's happening the more we know the more we can help you. And if we don't know what's happening we can't help you. And I think that's the hardest thing as an investor's perspective if someone comes to us saying you know what we've got two weeks of cash okay what was happening two months ago right that we weren't having this conversation and often it's that personal fear. And I totally respected I get it I've been there but just you have to lean into trust at some point and know that people are going to be impressed by your problem solving ability the way that you are wrestling with challenge because no one expects it to be easy they want to see what do you do in the face of challenge right that's what people are going to step up and want to support but you have to communicate. So funny I've lived through some of that personally so I know we're wounded. Yes trust I think is something that is so desperately missing right now in every system that we have in every situation so I would say trust. And what that means is trust yourself and that leads to humility and curiosity which means know what you know and know what you don't know and when you don't know something blind spot make sure that you have a teammate or you have a mentor on whom you can lean and be open and ask for the help and get the information you need and to your point there's nothing worse when you're doing your quarterly reports or whatever add numbers because that's so tactical but really that actually helps uncover so many situations early on before it becomes a mack track heading into a big brick wall and then lastly I would say collaborate. I think the more social entrepreneurs can gather together and or perhaps your ideas gone as far as it can but you know someone else who is missing what you provide go for it join join arms safe you know there's there's power in numbers and then share whatever knowledge you have everyone always says oh knowledge is power yeah it is but only when you share it otherwise you're just a silo and we know what that looks like we don't wanna do that this is not a repeat we have a chance to get it right. I like the theme here that the advice is social it is get help whether it's advice on your business model or whether it's collaboration whether it's trust trusting others to help you with your work I think that that is a great great take away before we move into Q&A as promised I wanted to come back as the curators of this social entrepreneurship track that we are embarking on with this session what are you most excited about which session which panel which ideas are you most excited about for this I know there's so many but maybe just a couple one or two John we can start with you. Okay well the one I'm most excited about is Morgan's but I'm gonna leave that for her so my answer would be the pitch the entrepreneur pitch sessions because I learned so much from what the entrepreneurs are proposing that and there's a number of them scattered around the content over these three days so that's my excitement. There's two tomorrow I'm really excited about the first is at 10 30 a.m. and it's on the concept of justice innovation of how entrepreneurs are looking to address the incredible inequities and efficiencies of the criminal justice system and that this morning actually the Justice Innovation Prize gave out a million dollars spread over five entrepreneurs and really excited to see how the justice tech and justice innovation field is growing and spreading so I'd say in kind of broader trends to watch in social entrepreneurship we're excited to see more entrepreneurs taking on those challenges and there's gonna be a couple great ones that are presenting tomorrow morning and then at 1 30 we're doing a panel on who decides matters and sharing three participatory funding models including my colleague Leslie Lindo for the Olamina Fund for US Community Development Village Capital and then so basically we span from grants to debt to equity through three different entities and sharing how is it that these groups have been setting up community-based decision-making models and what are some of the challenges and opportunities they've found on that way so I'm excited for that at 1 30 p.m. tomorrow. I was gonna say the criminal justice one which is gonna be fantastic because one of our portfolio companies I'm biased Rasa who is a female led company that does expungement of records and it's a perfect example of that return on impact and return on investment because that's generational change goes on and on and on and then I would say to the pitchfests and also who decides matters. Great, thank you so much. All right, now let's head into your questions. I have a few of them right here. So let's start with this and it's a question about how higher education might be able to better prepare the next generation for social impact but specifically what are the skills, experiences and learning that you believe young folks need to enter the sector and then how might higher education help? I feel like you should get the answer back. Well, to me where I'm sitting actually for the next generation it's we know that they care so deeply that students entering into university now or just leaving their secondary education. The next generation's care so deeply about social impact and yet at least where I sit in the middle of the country it's not really a conversation and so so many of them just don't even know that careers exist, that the whole field exists and that there are opportunities to have really enriching fulfilling and market rate careers in the field and so that's part of what I love in working with students is just the thought at the end of the course or semester after meeting a guest speaker just saying I didn't even know that existed. That's what I think is the first step at least to begin with. And I don't know if anyone's had gotten an MBA since 2010 but my husband John runs a company Poets and Quants and it's the leading business school site on the word it's like the Bible and what's fascinating to me and sad is when people go in there's a stat 81% want to run a socially good they wanna run a purpose driven company and then by the time they get through year two that number drops to 18%. So we need to stop that and we also frankly need to figure out ways to fund as we've been discussing these social entrepreneurs so that people that have the idea in the heart they can actually start solving those really big problems. So education for sure and you write visibility as well. And any thoughts for the two of you on specific skills, experiences or learning that would be useful to become a social entrepreneur and go into the field? I think the biggest thing is just experience period and that's where I think there's not nearly enough in terms of paid internships and kind of learning opportunities out in the world. I wanna shout out Kathy Clark here in the case I three program at Duke which has been one of the nation's leaders for a number of years but there should be so many more of them and that that's where I think we've really struggled. A lot of us as impact investment firms were small firms as well. We would happily take on more interns if it was a little easier to do. So there's these two sides that haven't quite figured out how to connect and I would really love if universities were more proactive in making that available because then when I sit on the perspective of being a hire there's just nothing that can substitute for actual experience in the field versus the classroom. So I'm attached with Santa Clara University but I also teach a course at Northeastern's San Francisco campus, Northeastern University on entrepreneurship and impact investing and I see the same thing as you Allison in terms of the kind of the willingness and the excitement that students have for themselves wanting to have a pursuit in their own careers when they get out of college to that fits that moral hunger as we heard yesterday. A specific answer I would say are two things. When I engage with these students I'm trying to give them a reduced fear of flying meaning I want to dispel the high priesthood nomenclature and vocabulary and Jingo and all that stuff so that they understand how does investing and entrepreneurship, how do they work and how do they come together and what are the expectations of each side. So I want to have them feel comfortable about being an entrepreneur or being a social entrepreneur. The other thing is finance. I do find that they are not as strong on the actual measurement of cash flow, working capital needs and finance that you have to have especially in a thinly funded early stage startup. So don't be afraid, go do it but be smart about what the decisions that you're making can serve capital. I think that's all really useful and Morgan to highlight what you said about experience. At the Sorenson Impact Institute we do have a venture, well we bring students into all the work that we do so that they're paid internships where they can get that experience and I know a number of universities have that out there and it's growing and that's really something to take advantage of and I think more and more we'll start doing it as well. Let's look at the next question which I love and this one is specifically for you Morgan but I'd like everyone to chime in if you'd like. Can you expand more please on the concept of mission delta? How do you define it and maybe one more example of its application? I'm laughing because we made it up. I mean that's what happens in impact investing all the time. So I wouldn't say that it's like a term of art that we certainly would welcome other people to use it and from that perspective I don't have a specific like debt example of someone who's done it the same way that I know of but I think the general idea what I do have a lot of examples of are investors and entrepreneurs coming to the table together to have that honest conversation about who needs what and what does that mean about how we organize the future. So another project E.B. Preck that you say permanent real estate cooperative which is on the sunny side of the bay I live in Oakland and essentially that has been purchasing real estate for collective ownership and that had one of the most it's public you can find on their website one of the most intellectually honest offering documents I'd ever seen that I absolutely love that essentially said in terms of the dividends that are gonna go to investors and the community returns that are gonna happen we are undergoing an extensive community design process to determine what's gonna happen in these spaces that we're developing and that means we can't tell you what's gonna happen that's the whole point you know in that for instance they took over a space called Esther's Orbit Room which had been a historic jazz club in West Oakland and in figuring out should it be a juice bar or an alcohol bar well those have very different margins right but if they do decide to make the decision that hey we don't want more alcohol in our community that is gonna have an impact on investor returns and what they basically said in their offering document is your mission Delta there is you're coming along for the ride and that you explicitly know that this is gonna be community governed decisions around how returns are gonna be distributed so I think we have a lot of great cases of that but I would certainly welcome people to use that mission Delta concept of essentially rather than saying one thing that you'll often hear me get a little stumbly about but purposefully I really try not to use the term market rate because when we say that we're like which market are you talking about like the one where we lock up people for profit and we destroy the environment like that's not the market I'm hanging out in you know and that's not the market that I wanna build and that means that I don't wanna necessarily peg to this kind of arbitrary standard I'm aware of it you know so I'm managing portfolios that we've done over gosh was it 100 investments like 200 million that we certainly are aware of how we measure up to the traditionally established benchmarks but that's not the starting place right and I think that that's where even thinking about a mission Delta I'm troubled still I think we still need to innovate more in the concept because it's assuming an anchor which is grounded in a very different economy so I think we need to continue to think more starting from that how much is enough what do we need what do communities need how does everyone get their needs fulfilled within that how different types of positionality will put us in that conversation differently but that's some of the conversations that we're trying to have as both individuals and institutions of wealth. Can I just real quick question? So with that and I love that that leads me to wonder once you set that it can change and that's another thing I think that people realize it's like you set this initial idea and this ground rule in the context of knowing what the situation is as you know it how often or when would you think that people would should be kind of checking it out and taking a look at when they should change or when they should be looking to decide hey is this still on track or do we want to move it a little bit change a little bit. I think it's mostly I want to make sure I answer your question but I also have a different starting point. I think what your question is making me reflect on is just a recognition that where you start is really essential and some institutions have less flexibility than others. So I want to note in the context of some of the foundations that I work with you have incredible social change missions they need that 5% payout right. There's no flexibility there. This is not saying and that might mean that certain types of investments are not right for certain types of investors. So let's what we try to do in our practice at Candid is that we take the how much is enough conversation that's the constraint right. So often for a foundation it's 8% a year. That's what they got to do to be able to cover their expenses and to be able to make the payout. I can take that constraint and then maximize the impact as much as possible. And that means that there might be times where I could choose an 8% product instead of a 12% product or I do choose the 15% product but I know why I'm doing it right. And I'm really keeping both those impact and those financial goals in mind. It's a delicate balance. I think that's often the feeling of like impact investors and social entrepreneurs. We have to work harder than they do in traditional markets because we got to balance all this stuff. But I think it's important to know are you flexible and with what portion of your capital and when are times that you really can't be and I want to really respect that too right. I think we need to make sure we have space for all of that in the context of impact investing. Thanks. And Morgan going back to what you were saying before if I understand it correctly seems like the mission Delta really goes back to the conversation we were having about keeping prosperity closer to where the value is created. And so in the example you gave earlier it's about maybe you didn't make the 12% you made the 2% returns but that 10% went to the community that was the whole purpose. And so keeping the value closer to where it's being created. Is that, did I understand that correctly? That's absolutely correct. And I think it's also being clear maybe one, a different way to think about did I achieve my financial goal is did I achieve the stated objective? If I should, if I'm trying to make 2%, let me make an honest 2%, if I'm trying to make 12, let me make 12, right? But sometimes for some institutions the uncertainty is the problem. And I think that often as investors if we're looking at for instance a debt fund if it's a five or 6% return that's not the linchpin. The linchpin is can I get from negative 100 to just the return, right? But that's where the hard work comes in. So I think that's where we wanna think on both of those accesses which is where is the value going? And then also what degree of risk are we willing to allow in the conversation to ensure community driven and more innovative approaches at times? So I wanna riff a little bit on all that was said here and bring it back to maybe one simple message coming back to Morgan's discussion about they fight you before you win. There's a lot of chatter these days about measurement like ESG and definition of fiduciary duty and you can't have fiduciary duty and cater to a mission delta is my interpolation of kind of what we said today and what I read in the papers don't be dissuaded by that. I think this sort of blowback about ESG the blowback about, oh, this is just a woke stuff is just noise until you win. And I think that this is a undercurrent a groundswell that has been moving for quite a while and I've never been more optimistic that in fact with the broadening of the participants with the broadening of the sort of consciousness that people have with the measurements coming in in terms of disclosure California is now mandating some disclosures about what you're doing with exploitation of labor or what you're doing with extraction of resources that are unsustainable that will become more known and in that light of day I think the right things will happen.