Driven by the heart, working with the Mind
A self described corporate refugee, Ankie spent 18 years in the corporate world working for a major US based FMCG and then as a corporate consultant. Whilst she worked on retail supply chains by day, by night she lay awake considering the importance of children’s education. Realizing that it was not enough to follow a career that simply challenged her mind, Ankie decided to follow a path led by the heart. This path led her to joining Enviu as a Managing Director, where she has now worked for 5 years, enjoying a complex position working with her mind, driven by her heart.
A serial entrepreneur with almost 17 years of experience, Enviu ideates, validates and builds ventures designed to create direct positive impact and change the systems undergirding our dysfunctional markets and supply chains. Within each of our programs we tackle some of the world’s biggest problems, from the plastics crisis and food loss, to the pollution caused by the shipping industry and fast fashion.
As Enviu’s managing director Ankie works closely with program funding and understands well the difficulty of obtaining capital for systemic change. We sat down to speak about this challenge:
What do you see as the biggest obstacle to Enviu’s impact ambitions? And how are we dealing with that?
The biggest issue in the market is that most funding comes either from foundations driven by rigid deliverables or traditional investors who expect immediate financial return. This kind of capital limits the options to test and pivot toward the best solutions. At Enviu we know these kinds of pivots and lean-learning are crucial if you want ventures with real potential to change whole systems. Simply put, the funding available does not match the criteria we need.
In particular, traditional investments and the pressure to generate fast financial return creates the wrong kinds of incentives, putting focus on profit where it should be on designing solutions for maximum impact. To develop solutions that can change whole systems, we need access to a different kind of capital.
What has made the biggest difference for Enviu is our program approach. Our programs act as a pipeline for us to test, innovate and pilot game-changing ideas without getting hung up on immediate business results, this makes these programs highly appealing to innovative funders. Who they allow to fulfill their wish of supporting impactful enterprises, whilst staying away from costly direct investments in individual ventures.
This program approach has already seen a lot of success. The funders we work with right now really are pioneers and play an absolutely invaluable role in allowing us to set up a pipeline of multiple impactful ventures. However, it would be great to see more as right now there are just a handful in the market.
What does this kind of program level funding look like, and why is it so important?
It has 3 key characteristics. It’s patient capital, accepts higher risk (as building businesses is inherently risky) and it’s flexible, accepting what we are doing is lean-learning, not traditional project management. This could come in the form of a convertible grant or a patient investment, understanding that there is a period of 5 years or so before these impact ventures can become self-sustaining.
It’s important because if you can get past that initial innovation phase, the potential for impact is enormous. Our venture Three Wheels United is a great example of this. The capital was there so we had room to pivot and learn. What started as a business building electric rickshaws transitioned into a financier to make electric vehicles more accessible. Now they’re making a substantial impact. This shows what can happen when we have patient funding that gives us the space to learn by doing, enabling us to build innovative solutions that are really needed.
Today there are many strong business models for impact ventures out there, but they have significant environmental or social barriers to overcome. If these barriers were not there, then the model would already exist! So, the challenge is finding the capital to get over that barrier. If impact entrepreneurs had access to this condition-free capital, you could have multiple Three Wheels United’s across multiple sectors.
What about the funders themselves, what’s in it for them?
This kind of funding is extremely sustainable. The impact ventures we build will continue to create impact long after the program is over. So, although funding a program sounds like a large, intimidating and difficult thing, it’s actually a very efficient and effective way of funding as the long term impact of our ventures will continue to grow, even say 10 years after the program has finished.
It’s also far more effective than funding one great idea, because the potential for system change is that much higher. A program with 5-10 mutually-reinforcing ventures, positioned at key points within the value chain is going to have a much higher chance to change that system as a whole compared to one venture with one great idea.
Additionally, though investing in building businesses will always be risky, investing in a program significantly derisks the investment as you’re focusing on a pipeline of ventures rather than one specific innovation.
What have the failures and the successes been? What has Enviu learnt from this program approach to funding?
They are closely linked. The biggest problems arose when we tried to adapt our program approach to fit the requirements of traditional funding structures. This led to the wrong expectations and wrong pressures. On the other hand it’s when we explain exactly what we are trying to do, and work with funders who align with our ambition and way of working, that we see the biggest successes.
Take our shipping program THRUST. Its funder has allowed us to take our time, so rather than rushing to bring just one low-hanging innovation to market we were able to focus on developing multiple solutions. It might take longer to get these to market, but we can be sure that when they do they are really serious game changers.
In the case of THRUST this same funder has now moved to support our newest program focused on eliminating plastic waste in Europe, Mission Reuse, so we’re confident we’re heading in the right direction.
What does the future look like for this kind funding model?
We need to bring more partners together, joining forces! This way we could be doing so much more. We want to be running programs with multiple funders. We could then bring our existing portfolio to scale faster and ramp up the potential for system change. Our THRUST program could, for example, be bringing 15 ventures to scale along the value chain. More ventures means more interventions, more interventions means more powerful programs with exponentially greater leverage to drive systems change.
In a lot of ways this is already happening, our current funders are referring us to each other and we are seeing many of them are very happy with how the model is working, but it’s a process.
It’d be great to have more of these funders in the market. Like I mentioned, right now there are just a handful. I hope in time more will realize the benefits of this kind of funding and we can see even traditional foundations and investors change their mindset and get involved in supporting those doing the pioneering work to create and build solutions the world needs.
Right now we see this as a call to action for funders who truly value impact to step on board. With their support our programs can act as the pipelines they were designed to be, bringing multiple impact ventures to market, driving our systems towards sustainability and building the better future we so clearly need.