We recently had a chance to catch up with Alumna Elizabeth Ü (C1) author of the book Raising Dough: the Complete Guide to Financing a Socially Responsible Food Business and founder and CEO of Finance for Food. Here’s what she had to say.
Q: How did you decide to get involved in the field of impact investing?
A: 10 years ago, I was part of the pioneer cohort, right in the middle of the very first Presidio MBA program. There we were, the next generation of social entrepreneurs, doing our best to understand and repeat the things our predecessors had done well, while also trying to figure out how we might avoid some of the challenges they faced. The general sentiment was a lot of the early and most beloved socially responsible brands had “sold out.” Odwalla “sold out” to Coca Cola, Ben & Jerry’s “sold out” to Unilever, and the list went on. We weren’t going to sell out! We were going to do it better. [Laughs]
One day Odwalla founder Greg Steltenpohl gave a guest lecture in one of our classes. He clearly wasn’t the villain I had naively imagined. He was thoughtful, intentional, clearly very heartfelt in his decision-making, and obviously very passionate about sustainability. Over the course of that lecture, and as I spent more time with him as an intern in the months that followed, that false and very unfair construct of “the greedy CEO who sells out” dissolved.
This humbling experience helped me realize I needed a better understanding of this whole phenomenon I formerly thought of as selling out. After digging into a few food company cases, I quickly came to the conclusion that no matter how committed a founder and a business might be to certain values, the way you bring money into the business can make or break your ability to keep those values in that business over time.
That’s when it hit me: if any business, food or otherwise, is going to realize its full potential to solve social and environmental problems, we need to figure out how to finance them in ways that allow them to keep their social missions intact. Selling to an enormous, multinational company can be a very strategic decision for a social entrepreneur, but we need other options, too.
Q: How did this revelation translate into your career in the years that followed?
A: Ever since that moment, I’ve committed myself to the challenge of directing the most appropriate types of capital to socially responsible food businesses. For one of my Capital Markets class projects, I started mapping out the different financing options. There weren’t that many at the time. I was able to identify a handful of venture capital funds that invested in “green consumer products,” which included organic food manufacturers.
While still finishing my MBA, I began an internship with Slow Money, then a project of Investors’ Circle. They were doing exactly the kind of work that intrigued me: catalyzing the flow of more investment dollars into the sustainable food space, while simultaneously trying to develop more values-appropriate ways of doing so. Food businesses are much different, for entrepreneurs and investors, than tech companies, for instance.
I had the privilege of working with very committed impact investors, both individual angel investors and people managing institutional funds, during my two years on staff there. Nobody was even using the term “impact investing” yet, and hardly anyone was talking about investing in food companies beyond the ones that aspired to be the next organic this-or-that brand in big box stores. How could we encourage investors to put money into local food, small food, community food ventures? It was an exciting time, and things were changing quickly, both in terms of people’s interest in sustainable food and in impact investing.
I spent a brief stint with the Business Alliance for Local Living Economies. It is an organization that was just beginning to help their local business networks mobilize to encourage more local investing. I followed my then-boss and mentor Don Shaffer to RSF Social Finance. I worked at this unique and wonderful organization for three years. It is a nonprofit that is kind of like a cross between a bank and a community organization that also happens to be located in the Presidio. I helped launch a new loan fund specifically for high-impact food businesses. I encouraged people to invest in the things that matter most to them. I spoke at events around the country, teaching investors about sustainable food systems, teaching foundations about impact investing, and my favorite, if least frequent task, teaching food entrepreneurs about the different ways to raise money in ways that aligned with their values.
Q: Sounds like you really enjoyed this work. And yet you went out on your own in 2010, becoming the founder and executive director of Finance for Food. Can you tell me a bit about this nonprofit organization? When did you start it, and why?
A: All three of these organizations were doing and continue to do work that I admire, and yet I always had this nagging sense of injustice in the traditional power dynamic of investing: the people with the money are usually in the position of power. There are plenty of opportunities for investors to learn about impact investing and food systems, but there just aren’t as many opportunities for food entrepreneurs to learn about how to find or work with investors, or how the different investment terms might actually affect their business as it grows.
I had been working at the intersection of finance and sustainable food and agriculture for years, and things were evolving so quickly in that space I could barely keep up with everything that was happening. I had been observing a steady increase in the number of ways to raise capital in ways that align with values-based businesses at all stages of their lifecycle. Online crowdfunding platforms like Kickstarter and IndieGoGo have really changed what is possible for very early-stage businesses, for instance, and there are other, more obscure opportunities that don’t get a lot of coverage, like peer-to-peer lending and direct public offerings.
I wondered: how can we expect socially responsible entrepreneurs, in the food sector or otherwise, to magically understand all the different methods of financing? More importantly, who was going to help these entrepreneurs sort through the rapidly-evolving capital markets space, and help them determine which might be the best fundraising models to match their values and business goals? It became harder and harder to ignore that this was the work I was being called to do.
In the fall of 2010 I made the hard decision to leave an office and organization that I loved to start a new nonprofit, Finance for Food, so that I could focus full-time on helping food entrepreneurs identify and access the most appropriate types of capital. I do this primarily through designing educational opportunities, primarily in the form of workshops and conference tracks, moderating panels, and doing other speaking engagements at conferences around the country. This year I’m focusing on “Training the Trainers” as I know I can only reach so many entrepreneurs directly. There are many, many organizations and people who work with food entrepreneurs, including nonprofits, business incubators, universities and colleges, economic development companies, USDA field offices, lenders, foundations. If I can provide these people with a framework for providing more effective financing advice to their clients, many, many more food entrepreneurs will stand a chance at successfully accessing capital that will best serve them.
Q: You also recently wrote a book, Raising Dough: the Complete Guide to Financing a Socially Responsible Food Business. Why did you decide to write it?
A: There are several reasons why I wrote Raising Dough. When I give a workshop, I usually get to spend about an hour with an audience, a little more if we’re lucky. That means I can only cover the financing options at a very surface level, and there is so much more that I hope social entrepreneurs will consider before committing to any investment agreement. A book gives me the opportunity to share the best of my ten years’ of very unique experience in this space – including many fundraising success stories and cautionary tales — as someone who cares passionately about helping entrepreneurs stay true to their values.
There’s also the social justice aspect to putting out a book. I am deeply committed to calling out and taking on the structures that perpetuate racial, class, gender, geographic, and other forms of discrimination. It’s not always easy to figure out how to do this, but I do know that the communities which can afford to put on an event and fly experts out to speak are usually already in a position of privilege in one way or another. This is a gross oversimplification, of course, but I think you see what I mean. Finance for Food does offer subsidized workshops for communities that have not had traditional access to financing education and resources yet a book has the potential to reach many more people.
Q: What advice would you give to current Presidio students, who dream about a career in impact investing and being a social entrepreneur?
A: I doubt that anyone actually dreams of “a career in impact investing” or generally being a social entrepreneur without being passionate about something very specific, or intrigued by a very particular challenge. It might be something that nobody else really sees yet. I mentioned earlier my own sense of nagging injustice, and I followed it to where I am now. I don’t really know where this will take me next, but I trust it will be right where I need to be. I suspect that’s what most truly successful and satisfying career paths look like: you follow your passion, you pour yourself into the process of unearthing the keys to what [former Presidio provost] Ron Nahser called your “nagging question,” you talk to any- and everyone who will give you the time about what they’re seeing and how it relates to what you’re hoping to accomplish, and you do your very best at everything you do, whether it seems related or not. Don’t be afraid to speak your truth, even if it goes against the prevailing attitude of the time. If you demonstrate your integrity in your every interaction and in every project that you work on, people will notice, and they will help move you forward along the path that unfolds before you.