How to make an impact.

Nov 19

EDITION 02: INVEST ON PURPOSE.

Did you know…

Women-owned businesses make up over 39% of all businesses in the United States, and the growth of women-owned businesses outpaced men’s for the number of firms, employment, and revenue during the pandemic and post-pandemic in 2023. Women-owned businesses that secure funding show better returns on investment (ROI) and tend to be in business longer than those owned or founded by men. On top of that, women intentionally develop products and offer services that set out to make life better for everyone.

Pretty impressive, right? Let’s go ladies!

Except… year after year, the world is losing out on the full benefit of women-owned business potential because they aren’t able to secure the funding they need. Women receive just 2% in venture capital (VC) funding, 21% of small-business loans, and only 10% of women-owned businesses even have a business credit card. Woof. This keeps their businesses from thriving and scaling in new ways.

Keep reading, and let’s dig in.

Imagine this…

You are a seasoned female executive with years of experience, and have decided to start a new venture. You have a revolutionary new platform with a compelling business model and all you need is the right investment to take it to the next level. You get a meeting with a prestigious venture capital firm, and head to their office where billion-dollar deals are made, and where the future of innovation is often shaped.

You’ve done your research; you know that your idea firmly fits with this firm’s investment thesis. You nail your pitch, and rather than being met with questions about the upside opportunity or even drilling into the mechanics of how the business will function, you are immediately met with gender-biased scrutiny. “How will you balance this business with your personal life?” “Who is your mentor? Who is guiding you?” “Is this a passion project, or are you in this to scale and grow?”

This whole scenario sounds absurd, right? Unfortunately, it’s very much rooted in reality. These types of questions are ones that BeeCene’s advisors have been preparing us to hear.

But don’t despair. There’s a whole lot of energy going into fixing this problem, and you can be involved too!

Welcome to Impact Investing.

Impact investing involves making investments that aim to create positive social or environmental effects, while also generating financial gains. You can think about it as the intersection of philanthropy and investment. With philanthropy you are simply donating money to causes you care about, without getting a return. With impact investing, you are earning a return that can then be reinvested into the same or other causes that you care about. You are effectively amplifying your dollars and the positive impact you can have.

I know, I know. Impact investing can get a bad rep. (If you want a super cynical take on environmental & social good (ESG) investments, just watch the latest season of Industry on HBO Max. ) But in all seriousness, a lot of big investment firms might say they are investing in companies that fulfill ESG goals to make themselves and their investors feel like they are doing something good, while they continue to just maximize returns at all costs elsewhere. This isn’t an intentional or effective strategy if you actually want to be doing something good.

An undeniable fact: when it comes to investing, yes people care deeply about returns. Also a fact (and at BeeCene we truly believe this): many people want to contribute to a better world for future generations.

The good news is, there are several ways to marry these two things.

How to apply this…

Most broadly, whatever investment platform you currently use, you likely can find publicly traded impact ETFs (electronically traded funds) to invest in. Even if you don’t change anything today, it’s worth your time to begin understanding what investment options are available to you.

For this newsletter’s purposes, I’m going to suggest starting to make your impact by investing in women-owned businesses. Why? Women build purpose into their businesses from day one. They deliberately create the change they want to see in the world through intentional product & service design, hiring practices, and community building. Women typically reinvest up to 90% of their earnings into their families and communities, compared to only 30 to 40% among men. This means when women earn more money there are rippling benefits to the rest of society.

In the coming weeks, I’ll be diving into different types of impact investment options within the private market sector (investments into companies and funds that are not publicly traded but you still can get involved in).

In the meantime, visit a local woman-owned business, and make a purchase.