Impact investing has always been focused on creating positive social and/or environmental outcomes.  At some points, Impact Investing has struggled to define itself as compared with philanthropy. Both require measurable positive outcomes, and some philanthropies accomplish outcomes that startups cannot while some startups accomplish outcomes that philanthropies cannot.

How are we to choose?

One way to choose is to consider Donor Advised Funds (DAF) as a part of your impact strategy.

The way a DAF works is that the investor gives a tax deductible contribution to the DAF that is set up in their name or through a foundation or fund.  This contribution is much like giving a donation to a non-profit in that it will not provide a return like an impact investment would, but it allows the donor to plan and grow the funding base that they will have for their future giving strategy.

DAF donors are more intentional about their giving than most people.  DAF donors think long term and typically have specific causes that they want to support vs. someone who responds to requests that may randomly come to them over time.  A DAF is like a personal Foundation in that it allows the donor to set funds aside to give to their causes over a period of time, but it is unlike a Foundation in that it does not require a five percent minimum donation amount each year.

Once money is in a DAF, it can grow by being invested in Funds or companies that match the donor’s values, but also return market rate returns.  For example, if you wanted to give $100,000 to the American Cancer Society, you could put $30-50,000 into a DAF and allow it to grow 2-3 time in size, and then allocate that those returns should be disbursed to the American Cancer Society times three.  

By investing in a DAF with investments in impact related investments like the Rockies Impact Fund, the investor gets a multiplier effect on their investments.  First, the Rockies Impact Fund invests only in companies that create Primary Impact in Social or Environmental spheres. This means that the investment themselves are causing significant measurable impact. Second, those investments give back up to two to three times the initial capital to the Donor Advised Fund.  Third, the DAF may now donate the profits from those investments to the American Cancer Society, or to a suite of causes specified by the donor.

Clearly DAFs are not designed for those who are focused on growing personal wealth since the returns must be designated for non-profit programs, but for those who have a long term giving plan, DAFs are a great way to both increase impact by investing in Impact Funds, and then being able to give two to three times more to causes that are important to them.

Leveraged philanthropy by investing in impact DAF

To learn more about setting up your own DAF, contact Ed Briscoe at Impact Charitable.

To learn more about DAFs as a part of your Impact Investing strategy for Family Offices, High Net Worth Individuals, Corporate Social Responsibility, or Fund of Funds, please contact Peter Adams, Dave Harris or Sue Stash at Rockies Impact Fund.

As the gift giving season is now in full swing, everyone has something different on their holiday wish list. Here are a few holiday gift ideas from RVC‘s portfolio companies so you can get your friends and family the perfect gift while supporting our local economy and startup community.

Bitsbox: The smartest way to introduce curious kids to coding. Crazyfun coding projects with new concepts sent directly to your door every month!

EnVision Meditation: Do you know someone that is already planning their New Year’s Resolution? Help them visualize success in 2019 with EnVision Meditation. In just ten minutes a day, EnVision brings you more confidence, self awareness and the ability to be more intentional about your life through guided meditations utilizing visualization to help you be at your best each day.

Felt: Make the holidays extra special for your loved ones by sending personal, handwritten cards for the modern world. Sealed, stamped and mailed — All from your iPhone.

mcSquares: mcSquares makes dry-erase collaboration products for businesses and educators. They will help you get organized, inspire team creativity, and cultivate group collaboration. Tablets and stickies are designed to facilitate learning and help teachers engage students.

Recoup Fitness: Recoup sells innovative hot and cold therapy products trusted and tested by professional athletes in all 4 major leagues. Great for the athlete in your family!

Rockies Venture Club MembershipRVC Memberships are perfect as a last minute stocking stuffer for the Investor or Entrepreneur in your family! As a member of the Rockies Venture Club you have a front row seat to the growing, developing, accelerating world of the Colorado Entrepreneurial Ecosystem. Over 100 events, workshops, and classes held each year. Help your loved ones move their business forward in the new year!

Sheets & Giggles: Try Sheets & Giggles absurdly soft and eco-friendly eucalyptus bed sheets. Last chance for guaranteed delivery by December 24. 15% off and free shipping for all orders in December!

Vortic Watch Co: Vortic Watch Company produces custom, handcrafted, 100 percent American-made mechanical watches that build on the legacy of classic railroad era watches.

Happy Holidays!

-Rockies Venture Club

With the Colorado Capital Conference right around the corner, we had Ethan put together an outlook on Colorado alone. The Give First ecosystem is rapidly advancing on the global scale for startups, with Colorado coming in 6th for startups nationwide. The report contains information ranging from the impact of our strong collegiate ecosystem and Colorado’s density of STEM sector specialists. Overall, this paints a great picture for Colorado investors. A high density of the young and ambitious combined with a high density of innovative, groundbreaking technologies to be commercialized sounds like a recipe for great investments to us. Other key takeaways? Namely, Colorado is one of the best places for female entrepreneurs. Hopefully this will translate to being a top location for female investors, too!

You can read Ethan’s Colorado Outlook here.

Inspiring both controversy and the imagination, like many innovation before them, drones were built first by the military, for the military. Interestingly, the technology that enables drones, and drives their proliferation, also comes from the military. The internet and social media have pushed drones into the mainstream consumer’s life, with vast numbers of people being reached by drone-driven content daily. Additionally, the Internet of Things has helped further the applications that make drones so useful today.
Where else do we see drones? Farmers, as it turns out, are pretty good customers of drones. From crop surveillance to precision agriculture, drones, like other autonomous vehicles, have revolutionized various processes for farmers.
More you ask? Well there are professional drone races with racers pocketing a cool 6 figures for their efforts. They deliver packages, although your pizza is probably going to take a while before it learns how to fly.
Learn more in Ethan Harden’s Drone Industry Outlook here.

According to the U.N. and the World Bank, the world population is set to reach just shy of 10 billion people by 2050. While a lot of focus has been put on the urban housing crunch that will create, as well as questions about employment in the face of growing populations and the rise of smart machines, a larger question looms: how do we feed that many people? With 795 million people reportedly not getting enough food in the world already, how do we feed 40% more people? And how do we do this while meeting our environmental goals?

A number of startups are sowing those seeds of innovation and disruption already. Aquapod is taking fish farms to a new level: they put fish farms in the ocean. Tortuga is building smarter farms for a hungrier future. Biopac’r builds machines that break down grass and all the chemicals sprayed on it, creating safe feed sources. Companies like the Rocky Mountain Micro Ranch are innovating the western diet with microlivestock: edible insects that use less land and less feed per pound than our meatier sources.

Now, the savvy investor has a unique opportunity to get ahead of the harvest, producing opportunities to reap what’s being sown. Seed companies need seed rounds, too, leading to the coming RVC AgTech Investing event.  Our keynote speaker, Paul Hoff, is the COO of Agribotix, a company enabling a technique known as precision agriculture through the use of drones. Join us for an early evening (snacks and drinks included), learning more about what opportunities exist to harvest the rewards of feeding the future. If you need more information, you can read RVC’s Ethan Harden’s industry outlook on AgTech to better understand the bunches and bushels of opportunities out in the world.

What does sequencing the wheat genome have in common with corn that makes its own nitrogengeodesic spheres for fish, and figuring out just what in meat makes meat taste meaty? They’re all agricultural and food technologies, or AgTech, the wave of innovative concepts with the goal of feeding the world for the years to come. From precision agriculture and crop engineering to tiny robots that pick strawberries, AgTech solutions bridge the gap between the rapidly expanding tech sector and the hard earned knowledge of generations of farmers. You’ll hear the scientists behind parts of this movement say things that may sound extremely strange, such as calling cows “obsolete food technology“, while others are breeding so called “supercows” and investing in the future of cowtech. To be frank, it’s about time, considering that the major breakthroughs in ‘modern’ farm science, up until about 10 years ago, have been Round Up, artificial fertilizers, and autonomous tractors. So what’s, quite literally, in store for the future? Will our produce be grown above our supermarkets and be picked by robots as we make selections on tablets? Perhaps scientists will learn how to grow bread in a petri dish, although petri dishes are more likely to make animals obsolete before wheat. From software to vehicles to the future of seeds, read the outlook here for more info.

Last weekend to register!!

RVC’s Summer Pitchfest

Tuesday Aug. 14th | 5-8:00 PM | Denver SBDC 1445 Market St. Denver, CO 80202

Meet the companies!

Available Via Livestream

Ascent360 provides cloud-based software that enables highly targeted, multi-channel communications direct to prospects and customers. Our secure, scalable software aggregates all inbound data including promotional, transactional (PoS/eCommerce), product registration, etc. via a web-service feed. ascent360.com

Cherryvale Farms is a fast-growing natural foods brand with thirteen products across three product lines: baking mixes, microwave mug cake mixes and whole grain snack bars. Proudly plant-based, Cherryvale Farms products are free from animal ingredients, boast clean nutrition labels and feature family-friendly flavors. Stocked in nearly 4,000 stores nationwide, the brand sees strong YoY, same-store sales in top retailers like Whole Foods, Sprouts and divisions of Kroger, while continuing to innovate with delicious, novel plant-based foods. cherryvalefarms.com

FitBot- Personal training is moving online and trainers are struggling to take advantage of this massive emerging opportunity. The percentage of trainers offering remote training services has grown from 10% to 33% in the past 7 years. Fitbot has already helped thousands of trainers save time and make more money through remote training, and with 300,000 trainers in the US and 1 million globally, we’re just getting started. thefitbot.com

iEldra has developed a Smart Activity Monitoring (SAM) platform uses non-invasive sensors to track a person’s Activities of Daily Living (ADLs). These sensors provide input to our proprietary SAM software to establish individualized, typical levels of daily activity. We call this a “routine” for each person being monitored in their individual home. This “routine” becomes the benchmark for establishing when the person may need assistance from family, friends or caregivers who may receive the alerts. iEldra.com

Tersa Inc. was born out of a hatred for traditional laundry methods like ironing, machine washing and dry cleaning. We saw the need for a supplement so that we could spend less time washing, and more time living. We create high end garment steamers designed for affluent professionals and marketed to their favorite hotel destinations. We offer the first automated garment steamer as well as traditional hand held models to fit into any room. tersasteam.com

Upsuite is an online B2B marketplace that makes it easy for corporate teams to find the best coworking spaces. Unlike other alternatives, Upsuite provides complete verified inventory in local markets so that teams can find, compare, share, and tour spaces. Our vision is to empower teams to do their best work together. upsuite.com

Zay Products- It’s no wonder why 130 million downhill skiers around the world look forward to taking their boots off at days end. Ski boot companies have failed to address key fundamental elements of their design and produce a cold, stiff and un-comfortable ski boot. Zay has a patented solution that will change the way skiers, from recreational to elite, think about their boots. Join the revolution as it spreads from the US to Europe and on to the explosive Chinese market. zayproducts.com

REGISTER NOW

Available Via Livestream

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We all know a handful of busts in the venture capital world. Whether the lesson to be learned is for the entrepreneur or the investor, every failure is a learning opportunity. Bigfoot wrote an article in May about some of these lessons.

Closing a venture round is the dream, right? As Founders, it’s how we know we’ve arrived, primed for our Techcrunch cover.

This transforming event is why we pull our aspirational all-nighters, scour CrunchBase for the latest capital raise news, and espouse mighty, world-altering visions.

After all, with that first, third, or fifth round of venture funding, we’re well on our way to the Unicorn Club!

Let’s start with remembering what a unicorn is: a privately held startup valued at over $1 billion.

So, how does one get into the club? Well, it’s generally based on the amount of venture capital you’ve raised.

A billion dollar private market valuation shakes out from the private market investors that need to justify a valuation in order to make their investment.

Unicorns are a rarity in statistics and reality.

Unicorns are a rarity in statistics and reality.

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The venture capital game is binary and with this amount of VC behind you, the path is to either get huge or die trying.

Unicorns die when they have to move beyond raising money and actually build a sustainable business.

Framed this way, our obsession takes on an unhealthy connotation.

Turns out, no amount of capital solves fundamental flaws in a business that, when unresolved, drive it to the graveyard.

Let’s look at two cautionary tales of one-time high fliers that recently flamed out and see what lessons we, as Founders, investors, or employees can learn from their falls from grace.

Theranos

theranos

Image source: bodetree.com

Let’s start off with a bang. There may be no better recent cautionary tale than Theranos, a one-time DECACORN. That’s right, this company (or shadow of a company) reached a peak valuation of TEN BILLION DOLLARS. Now, the company and its CEO and President have been charged with massive fraud by the SEC.

The Facts

Capital Profile

  • $1.4B in funding from over 10 rounds
  • Two private equity rounds totaling $547B, a secondary market sale of $582B
  • Investor Lemming Effect, based on a hope, a prayer, and a promise of revolutionary technology that was never developed and deployed

Shut Down Date: Potentially within next 2 months if cannot get lifeline capital

Time to Shut Down: 4.5 years post first private equity fundraise, 14 years post-founding

Lessons to Learn

  • Complexity kills

For years, Theranos promised revolutionary technology that would simplify and speed up the blood testing process. It’s admirable to tackle a big, hairy problem, but it turns out that radically improving chemistry is really challenging and takes forever. Remember this as you: 1) consider problems you want to tackle and 2) consider adding complexity (more people, more process, more product features, more capital) to your business.

  • Be suspicious of vague communications

Specifics and details matter, especially when dealing with a highly-specific problem set, such as blood testing. We’re not talking about provisioning servers and pushing CRM code to a repo here. Stakeholders must hold those in executive positions responsible to implement and act under a framework of governance and fiduciary responsibility. Eschewing this responsibility is a major red flag.

  • Set realistic expectations

It feels like Elizabeth Holmes and Theranos set themselves up for failure. Why couldn’t they have come out of the gates setting reasonable expectations around their technology and build up to being the massive market disruptor they and their investors envisioned themselves becoming? Maybe they did and just failed in executing, or maybe they promised the moon, took a lot of money from other people and delivered nothing. Let’s remember to underpromise and overdeliver.

Juicero

Juicero

A WiFi-connected juicing system

The people need JUICE! The people must not have to clean on their cleanse! Who are these people and how did they ever justify a peak valuation exceeding a quarter of a billion dollars?

Juicero made it almost five years, taking about three and a half of those to get their product to market. Ultimately, they ended up in the venture capital graveyard.

The Facts

Capital Profile

  • $119M in funding from 16 institutional investors, Series C
  • $70M Series B (3/31/2016) and $28M Series C (4/1/2016)
  • All capital raised before the product went to market

Shut Down Date: 9/1/2017

Time to Shut Down: 17 months after Series C

Lessons to Learn

  • Don’t be a solution in search of a problem

Part of Juicero’s product appeal was it’s single serving juice packets that made juicing simple and required no clean up. Sure, cleaning juicers sucks. But, is it really a top of mind problem for a significant portion of the population? To generate an equivalent amount of revenue to the capital it raised, Juicero needed to sell ~72,000 juicers to people who were going to consume 3 $8 juice packs/week for a year. Turns out, that market’s likely not out there.

  • You must match price to perceived value

Juicero’s pricing scheme required an upfront $400 a juicer (reduced from the launch price of $700) and ongoing spend of $8 per juice pack. That’s a significant capital investment into juicing, which feels possible for the 1%. When people discovered they could extract the juice from the pack without the machine, the company’s days were numbered. Good news for Soylent I suppose!

  • True differentiation and improvement are necessary to disrupt

Stripped of its sleek design and wifi compatibility, at its core, Juicero was a cold press juicer (excuse me: a “cold-pressed juicing system”) just like any other. In reality, it was a status symbol, a talking point. It was a Concorde in a market that didn’t really need it. Thus, it was not a sustainable business.

  • Hubris is blinding

Please read “A Note from Juicero’s New CEO” four months pre-shutdown. I understand that many of us Americans have a problem with our relationship with food often going for convenience, pleasure, and price to quench our hunger pangs. Now, I have no clue how to solve this. But my first and best thought would likely not be a $400 juicer.

Imzy

Imzy

The “kinder, gentler community platform

Ok, Imzy was nowhere close to a unicorn, but, hey, they’re an early-stage venture-backed company whose shut down we decided to analyze. Imzy made it about a year and a half, making it to a beta launch. Ultimately, they ended up in the venture capital graveyard.

The Facts

Capital Profile

Shut Down Date: 6/23/2017

Time to Shut Down: 8 months after Series A

Lessons to Learn

  • Markets don’t form around ideals

Imzy was unable to find its footing in the online community space. The Founders came out of Reddit and idealized a nicer Internet. To their credit, they realized somewhat quickly that their desire to provide a troll-free utopia for the sharing of ideas and passions was just not something a massive amount of people were going to flock to.

  • Imzy was a vitamin. Strive not to be one too

Yes, this is cliche, but it’s true. The Founders had an idea for an itch they wanted to scratch. The CEO was an entrepreneur who sold his previous company to Reddit. So, chances are, he dreamed up a problem while at Reddit and just couldn’t bear not willing it into existence. That’s admirable, but also dangerous. Turns out people will put up with some stuff they don’t like (i.e., trolls and profanity) if the core experience is satisfying their need.

  • B2C communities are incredibly hard businesses to build

This is not a surprising shut down. Scaling an online community from scratch is no joke, just ask the Founders and investors behind App.netOrkutSecretSo.cl and what was that other one? Oh yeah, MySpace.

Conclusions

This was not meant to be a slam piece. There’s no shortage of those already out there.

These companies are in the spotlight, with bright lights shining on their flaws, unfortunately for them. Fortunately for us, that scrutiny gives us the opportunity to gain new levels of understanding of both how incredibly hard it is to build a market-changing business and what it takes to keep your startup surviving and thriving.

You need to be more than just passionate, smart, and idealistic.

You need more substance than loads of capital supporting your effort.

Then, you need to build a product that a market truly understands, needs, and values above and beyond the competitive set.

You need to price and package that product appropriately, making it the obvious choice for customers

 

 


This article was originally published by our friends over at Bigfoot Capital on their blogBigfoot Capital provides growth capital for SaaS businesses that have achieved initial revenue scale ($30K-$150K MRR) by selling to SMBs. Our ongoing capital investments range from $150k-$750k to support efficient growth and help Founders retain the lion’s share of their equity and upside. Beyond capital, we have built relationships with specialized services firms across sales and marketing, product development, and operations to help you scale beyond your current human resources. Want to learn more? Visit www.bigfootcap.com or schedule a time to chat.

The holodecks of the Star Trek universe once captivated millions of people’s imaginations. For the unfamiliar, holodecks were rooms that became any setting you wanted, from a dojo to a sprawling valley in Austria. While today’s reality bending technologies don’t quite reach the same level on integration, advances in the industry are shaking things up. Google’s Tilt Brush turns your room into a personal graffiti studio while esi-group is building a tool for industrial product pitches. The virtualization of fabricated reality with digital tools isn’t anything new. Nissan’s Gran Turismo Academy trains pro gamers to be pro drivers using the realistic racing game Gran Turismo. This year, the advantages of virtual reality training has landed the programs alumni a ban from Britain’s premier racing tournament. NASA started using early virtual reality with flight simulators in 1959. The turning point bringing this technology to the masses has been the analogous VR/AR headwear.

The initial push into consumers lives were Google Glass and the Occulus Rift headset, but the move has slowed down since the HTC Vive. Everyone from Samsung to Dell has some version of the VR headset. As the race for smaller and smaller transistors heats up, we’re likely to see the landscape change. Google Glass was premature to market, lacked positive consumer sentiment and because of ithat ultimately failed as a flagship of the augmented reality sector. However as our smartphones become more powerful and various wireless technologies come into greater maturity, we are likely to see new attempts at the eye wear of the future.

As with last month’s outlook on nanotechnologies and advanced materials, which have some heavy implications for the VR/AR industry, VCA team member Ethan Harden has prepared an outlook on the future of augmented and virtual reality. His report goes in depth about the future of these technologies, their mediums, and the mix of revenue streams projected to grow in this industry. You can download the outlook here.


Ethan is a Sr. Financial Analyst at Stantec, a Top 10 design firm awarded by Engineering News Record. He works as a financial consultant primarily serving water and wastewater municipalities across the country. His focus is to provide value to his clients through technical financial planning, cost-of-service, plant-investment fee and affordability financial modeling.

Ethan’s enthusiasm to work in a fast-paced, volatile and varying environment has led him to venture capital to employ the full business acumen he has developed. He is looking to immerse himself in venture capital to gain the knowledge and understanding of the fundraising process in order to be prepared for his next opportunity.

He holds a degree in Finance, Marketing and a Masters in Business Administration from the Daniels College of Business at the University of Denver.

Hello RVC members, my name is Justin and I am a summer intern for RVC. One of our primary objectives for this summer is to provide an update on RVC portfolio companies for members. This week, I’m bringing you an update on Silvernest. Finding a roommate is important, but it is never an easy task, even for open-minded college students with low standards.  As a typical cash-strapped CU Boulder student, I can rant about how expensive rent is and how difficult it is to find a good roommate all day long. The roommate situation and process are more challenging for the community age 50 or above. As people get older, they seek out supplemental income and companionship, and the housing situation for empty-nesters and baby boomers is currently a national concern. Nearly half of adults in U.S age 65 and older live in poverty and cannot afford to live in the nursing home. Public housing is not a viable solution either, as the average wait time exceeds a year. For example, the average wait time is more than four years for public housing in New York. Wendi Burkhardt understood that this is a critical issue that the government won’t be able to solve, which inspired her to co-found Silvernest to tackle this problem. Before starting Silvernest, Wendi held multiple executive positions in the tech industry and has years of experience in marketing and sales. Silvernest is the only roommate matching and home-sharing service designed specifically for the community over 50. It is a brilliant service to lighten the financial burden and to find trustworthy companions for the aging community. For a small fee, homeowners have access to 60 days of unlimited communication, matching and background screening for their potential roommate.

 

Silvernest hasn’t always sailed on smooth waters. Wendi and her team have faced numerous challenges and hurdles since the formation of the company. According to Wendi, it is very difficult to be a female founder in the startup world, since it is tough to raise capital as a female founder in a industry that is primarily dominated by men. This is a truth we see resoundingly supported by data, with female founders receiving just 2% of venture  dollars in in 2017. Wendi was able to secure funding through grit, perseverance, and tenacity, along with the help of her wonderful team. Another challenging process for Silvernest was building partnerships with non-profit organizations (NPO). Silvernest currently partners with multiple organization including Village to Village Network, an NGO that helps communities establish and manage their own aging in place initiatives called Villages. This is a great achievement for Silvernest, given that most NPOs tend to be  hesitant to partner with for-profit organizations status.

 

Silvernest received national recognition after their RVC Angel round in 2017. It now operates in all 50 states but markets actively in Colorado and California. Silvernest has been expanding rapidly and successfully raised more funding after the RVC angel round. It raised $1.3M back in 2017 and is currently close to finalizing an additional round of funding. Despite recent success, Wendi was very humble throughout the interview. She stated that the primary objective remains helping the boomer generation and that Silvernest will not deviate from its mission. Although Silvernest became very popular in the general roommate matching market, 90% of Silvernest’s subscribers are over the age of 50 with the average age of the renter being 40. Wendi also mentioned to me that the proudest moment for her was when Silvernest was one of 46 companies selected out of 1,000 by 500 Startups.

 

Silvernest is an amazing company with enormous potential. It is certainly a great way to find affordable housing and has an enormous social impact. Some of the houses listed on there make my Boulder apartment looks like a flaming trash heap, and yet they are in a similar price range. I am already better situated than most other Boulder students, as I am not paying $800 to live in a closet without AC along with five other roommates, and maybe three raccoons. However, we should never let good get in the way of being great, and based on what I saw at Silvernest, we can all live a great life. That is all for today, have an amazing day and enjoy the air conditioning in this hot weather! Most Boulder kids don’t have AC at their home, including myself, so crank up the AC for me!