Inc Magazine’s 2014 list of 5000 fast-growing companies named Holganix, a business in my investment portfolio, as its most sustainable company. Positive environmental impact and fast growth? Yes, it’s possible!
Holganix keeps pollutants out of the environment by replacing conventional lawn care chemicals with an organic live brew (analogous to yogurt) for healthier soils and plants. As a board representative for co-investors, I get special insight into Holganix’s successes and struggles. It’s experiences like these that make impact investing so gratifying.
Each year for the past four years I’ve been shifting 2% of my assets away from conventional stocks to businesses like Holganix that align with my values. I seed solutions for flourishing living systems at individual to planetary scales, and it feels great. Here’s how I got started.
First, I opened a discount brokerage account with a few hundred dollars and bought shares in two companies. Super easy. I walked into my local Schwab office with my check and the staff showed me how to use their trading platform.
Those early stocks weren’t the greatest choices, but with more experience, I’ve gotten better at picking. Since I control the account, I can vote on shareholder proposals with just a few mouse clicks. Now I shop for stocks using As You Sow’s list of shareholder advocacy targets, or from the Dow Jones Sustainability Index and similar lists.
Next, I joined an investor group. The members of my local angel investing group were welcoming and happy to coach me. “Angels” invest their own money, contacts, wisdom, and time; most have worked hard, done well, and want to give back.
Modest amounts of money and advice can be pivotal to the success of young businesses. At meetings, angels see pitches from inspiring entrepreneurs and decide whether or not to provide funding. Only accredited investors are able to become angel investors, but there are a variety of other groups for unaccredited investors too.
Finally, I refined my investing focus and strategy. Just like good philanthropists, successful investors are looking for positive outcomes. There’s certainly an element of risk involved: about half of new business fail. Rare hits are needed to return enough cash to pay for the 90 percent of a portfolio that is less successful. Winners can be hard to predict, but experience and expertise helps.
It takes a network to find and fund high-impact businesses. Co-investors with shared focus are hard to find, but vital for referrals and bringing in enough cash to prevent starvation. Recently I joined Investor’s Circle, which screens businesses for social and/or environmental benefits. I first learned about them through Rachel’s Network.
It’s still too early to talk about financial success, but my portfolio is already yielding many positive benefits for people and the planet by creating jobs, preventing pollution and saving water and energy. Join me by taking the first step on the impact investing path!
Rachel’s Network Member Annarie Lyles helps entrepreneurs develop technologies with positive environmental potential through her business, Bio-Gist Ventures. Her recent projects include $8 million raised for a new environmental center and growing New Jersey’s first curbside compost program.