Venture Capital Meets Slow Money at Investors’ Circle Conference : Ecopreneurist

Venture Capital Meets Slow Money at Investors’ Circle Conference

Written by Julie Sammons

Published on May 14th, 2008

Fast money and fast movers. These are the phrases that come to mind when entrepreneurs talk about venture capital as a potential source of funding. But what if the flow of funds slowed down…way down?

The Next Generation of Sustainable Capital

The Investors’ Circle spring conference attempted to answer that question during a lively breakout session entitled “Slow Money: New Strategies for Investing in Local Food Systems.” Attended by reps from next generation investors such as SJF Ventures, Transformative Capital, and Renewal Partners, the conference blended a business pitch competition, philosophical discussions, an entrepreneur showcase, and community education in an effort to jump start the transition to a sustainable economy. Ecopreneurist writers were out in full force at the conference, with Leah Edwards blogging the “Is Organic the Next Clean Tech?” breakout session and joining in the networking events.

Slow Money: New Strategies for Investing in Local Food Systems

As part of the larger Slow Movement sweeping the cultures of food, travel, cities, and schools, Slow Money proponents seek investments and returns at the pace of sustainable business development. Slow Money panelist Greg Steltenpohl, former CEO of Odwalla and self-confessed “fast money sinner testifying before you,” advocated for the creation of new metaphors for economic growth. In the Slow Money movement, organic phrases replace academic terminology and new financial vehicles arise to form the “compost of the slow money economy.” Investors’ Circle chairman Woody Tasch expressed this transition as a study in contrasts between old and new ways of thinking:

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Extraction vs. Restoration
Transactions vs. Relationships
Linear vs. Cyclical
Taking Out vs. Leaving In
Consumption vs. Restoration

Redefining Return on Investment

When does the expectation of a 20% return on investment transition from being from lucrative to being exploitative? This was the most provocative question raised in the breakout session, and one that generated healthy discussion. Traditionally, venture capital-funded investments expect a 20% ROI before they are deemed successful. Framed in terms of an organic farm startup or community-based enterprise, the panelists challenged the logic of extracting such significant amounts of capital from the local economy. What if 5-14% returns became the norm in exchange for the preservation and restoration of equally vital, yet often overlooked, forms of capital such as healthy ecosystems, fertile soil, thriving communities, and abundant natural resources? These challenging questions beg a fundamental re-examination of our concepts of wealth, investment, and growth as we start down the path towards a slow and sustainable economy.