In Amsterdam, social startups pop up like mushrooms, and more and more of them manage to attract investments. If there is one person able to reflect on the current state of social entrepreneurship and impact investing in Amsterdam, it is Tatiana Glad, founder and visionary of Impact Hub Amsterdam (since 2008). She is co-founder of Waterlution and has worked in the financial sector before. Currently she is co-producer of Capital Impact, the main event on impact investing during the Amsterdam Capital Week. The Canadian-born Tatiana Glad is fascinating to listen to, as her analysis on the impact landscape is often mixed with a clear vision on where our society needs to go.
By Alexander Bongers / www.capitalimpact.nl
Tatiana, the aim of Capital Impact is to stimulate capital flows towards impact startups. How can we do this?
‘One of the things, and that is why we are hosting the Integrated Capital Lab within Capital Week, is to focus on how different types of capital providers collaborate. Let us look for possibilities of going in together, and explore more hybrid or blended financing opportunities to make more impact. Who are the unlikely allies that need to work together to create more output? When it comes to finding the perfect match, I think capital providers can play a bigger role.’
Could you give an example of such a collaboration?
‘I see a role for public and private finance to work more together. There are many opportunities here, because we have a track record of government experimenting to make society work better. Impact bonds are an early experiment, but how can we make such instruments more accessible and experiment a bit more?’
The number of impact investments are on a rise. How do you see the current state of impact investing in Amsterdam?
‘Impact investments are growing and here, in Amsterdam, we live in a place of ambition. I would say this sector is still at quite an early stage, but it is a good sign that it is growing. Entrepreneurship is back on the rise. That is great because it creates more co-ownership for our own economy as opposed to people just passively waiting for things to come to them.”
Prince Constantijn, Special Envoy of Startup Delta, talked about transforming Western Europe into a ‘West Coast of Startups’. Can international collaboration play a role for impact startups?
‘There are definitely opportunities in thinking cross border. However, people seem to like to invest in their own national territory or own city. The issues impact enterprises aim to address are often contextual and therefore many of them are not easy to scale. Yet some issues are clearly universal, like many environmental problems, so an increase in international collaboration when it comes to capital is needed.’
When it comes to interaction with investors, it seems that impact entrepreneurs often do not seem to speak the language the investors do. How can they overcome this problem?
‘Well, the startup entrepreneur is often expected to have a grip on all financial aspects of their business as well as be the visionary driving a new idea forward. The truth is that not all skillsets are contained in one person. Social entrepreneurs often get critiqued that they don’t have sufficient business skills, and in most cases it is true. They have largely been driven to start an impact business because they are motivated to address a certain social issue. Their expertise is the idea and the change they want to see in the world. It is important to recruit other team members to bring on the needed (financial) capabilities.’
‘But when it comes to investors – and especially the network Amsterdam Capital Week draws – it is interesting to not only focus on impact investors but a variety of capital providers. So you have to realize that someone from a microfinance fund speaks a different type of language than someone from a family office, and depending on their own life experience either may or may not understand the entrepreneur at first go. In the last couple of years however, there has been a stronger, pro-active interest among impact investors, trying to find out more about the entrepreneur: therefore I think it is quite an exciting time to be an entrepreneur.”
There is more interaction?
‘Exactly. For example, during our Demo Day, at the end of our Investment Ready Program we had a hundred impact investors in the room. There were ten pitches from entrepreneurs and then we gave them an opportunity to interact. It was interesting to see people rushing towards the one or the other: one investor wasn’t impressed by any entrepreneur, while others said: this is the one! So it is interesting to see when it becomes personal. Each are looking for something that resonates. But I think if investors and entrepreneurs come out and interact, they learn most about each other.’
You are positive about the developments in Amsterdam. What about other places?
‘In our Impact Hub network we see a lot happening in Eastern Europe. You look at societies that have followed a very different trajectory, with a first generation of entrepreneurs. Yet there are many opportunities for entrepreneurs to respond to social issues. You can also look at Spain. Just a few years ago the country was in a terrible economic crisis. But social entrepreneurship grew. So what is interesting is that in such a crisis people stand up who say “we have to find solutions!” Even in the Netherlands social entrepreneurship grew during the economic crisis, because such a time asks for innovation.’
What role does capital play?
‘Well, we need the space and resources to stimulate social entrepreneurship. When it comes to capital, I believe we need more risk capital. Not everything is a sure bet, and investors play it safe. It would be interesting to see what people would come up with if we had a little bit more risk capital, or room for experimentation, because not everything is a proven business case in this field.’
How would you like to see the sector developing over the next 10 years?
‘I hope the sector grows and I hope there is continuous innovation in terms of products so that it doesn’t become uniform. I do expect impact to go mainstream. But I think it is related to how young people are educated. Let us make sure that meaning and money come back together in our education system. Too often, talent is wasted in our society. I believe that people who have a good idea for society should have a space where they can try it out, and see if they can make a viable business model around it.’
Soon I will be interviewing renowned business angel and venture philanthropist Hedda Pahlson-Moller. Which questions would you like her to answer?
‘If we could aggregate capital providers to really get behind one issue so that they could truly make a difference in that field, which issue would she think is high-leverage?’
How would you answer that question?
‘In the Dutch context, I think… diversity. I want to invest in how we turn diversity into a gift. Because I think it could help us become a stronger next-level society.’
But is there a business model in diversity?
‘Diversity has a huge business perspective! There are a lot of possibilities for cultural fusion in terms of offering new products to the world. Or bringing together people who normally don’t work together. One of the biggest problems in the world is that we don’t know how to work together, across borders, across cultures. In Amsterdam we are a small microcosm of the world. We should welcome innovation born out of unlikely people coming together.’
During the Capital Impact event on the 28th of September, you will host and moderate several sessions. What do you think of the line-up?
‘What I really like is the multitude of perspectives. The speakers can offer not only a perspective on capital, but also a perspective of where the world is going. There are people who have been in the field, and they have made choices on what they want to drive in the world. Many of them work for organizations who move from singular interventions to more systemic work. To make systemic change, we need to blend ingenuity and capital. There will be a lot of that on Capital Impact!’