3 Tips for Funders Finding the Right Investees

Date

January 9, 2020

5 min read

At the scenic Jeju Island, we curated a group of social purpose organisations that are providing a diverse range of solutions to the world’s most pressing environmental concerns. These solutions are at different stages of funding and provided investment opportunities for funders of varying types and interests.

Inspired by the conversations at the tables, I will like to share a few lessons I had learnt to better support funders interested in climate-smart solutions.

A Brief on Asia’s Climate Smart Investment Landscape

Interest in climate action among Korean funders – especially among those who previously did not identify themselves as being ‘impact-focused’ – has been growing. One of the key challenges that funders face, however, is the lack of information around climate-specific investible opportunities. Many of these funders are unsure of where to find social purpose organisations (SPOs) with climate solutions and whether these solutions are reliable.

SPOs, on the other hand, are in need of patient capital as they prototype solutions for climate action. As climate change has brought about unprecedented challenges, the solutions that seek to tackle them also tend to be unconventional and innovative. For example, in order to  bring back biodiversity and create jobs in rural and coastal communities, Urchinomics, a SPO featured during AVPN’s World Café session, has created ranching systems to restore overgrazed sea urchins and dying kelp forests.

A successful SPO like Urchinomics requires financial and non-financial support from funders who can identify and invest in outside-the-box solutions. Governments, likewise, need to take the lead by creating more funds and providing patient capital for innovative climate solutions.

Local funders should expand their horizons to identify solutions

When advancing solutions for climate action, it is important for funders to support local SPOs. SPOs that operate in their country of origin not only have the best understanding of social and economic context of each country, but their work also helps spark economic growth in local communities.

Nonetheless, collaboration across borders is crucial to mitigate the monumental challenges that climate change has brought about. The environmental, economic, and social harms of climate change are not exclusive to a single country or region. Aqua-Spark, an investment fund that specializes in aquaculture-related investments, is based in the Netherlands, but its co-founder Mike Velings joined us in hopes of finding investible SPOs that provide aquaculture-related solutions. In this instance, the solution that Urchinomics provides could be adapted for different contexts.

Funders must deepen knowledge to keep up with trends around environmental sustainability

Especially with regard to environmental sustainability, it is important for funders and aspiring impact entrepreneurs to have a strong depth of knowledge around climate change and its solutions.

Reborn, a SPO featured at our session, conducts research and development on bacteria that break down plastics. We found her showcase particularly meaningful as several funders had a sound understanding in this niche field and could ask Dong-Eun Alice Suh, the founder of Reborn insightful questions about Reborn’s solution.

Funders can find a middle ground by breaking down funding vocabulary into universal terms

While it is important to have a high level of understanding regarding environmental sustainability and climate action, funders and SPOs alike can benefit from using language that is approachable to those unfamiliar with the topic. This was especially helpful for many of the participants who were new to the impact space but decided to join the convening due to the increasing gravity of climate change and the rising appreciation in impact investment. Many commented that they appreciated how the speeches were easy to follow, even for those who recently began to learn about the topic.

Funders who come from the more “traditional” investment and venture capital scene, likewise, found ventures more approachable when they presented their solutions in clear, understandable terms. While the technology that is at the root of a climate solution often tends to be complex, entrepreneurs like Eli Goldstein of SkyCool Systems Inc. successfully broke down their solutions for a wider audience. SkyCool Systems Inc. spoke about how its passive rooftop cooling panel is able to reduce the energy required for air conditioning and refrigeration, thereby lowering carbon emissions. By using straightforward language to describe their technological solution, SkyCool Systems was able to get funders’ attention and have active discussions with the attendees.

In this new decade, I am excited to continue witnessing such vibrant conversations. To identify relevant investible opportunities across different markets and causes, do not hesitate to write to us at dealshare@avpn.asia.


AVPN hosted a World Cafe-style Deal Share Live session at the 2019 Asia Impact Nights, themed “Investing in Natural Capital for a Sustainable Future”. Learn more about these ventures in detail and browse similar deals in the space.

AVPN Deal Share bridges the gap between demand and supply, helping funders to identify suitable pipeline across markets and causes as well as supporting Social Purpose Organisations to scale, develop sustainably or be investment ready.


About Author
Seoyoon Choi
Seoyoon Choi South Korea Associate AVPN

Seoyoon is an associate of AVPN’s South Korea team.

She holds a Bachelor of Arts degree in International Relations and Philosophy, Politics & Economics (PPE) at Claremont McKenna College. She is a researcher at Merry Year Social Company.

At MYSC, she has facilitated design thinking workshops for social workers, public school teachers in Gyeonggi province, and teachers committed to innovating public school education in the Yeongdeungpo district of Seoul. She has also facilitated a workshop on assessing and managing the social impact of art projects for artists participating in the 2019 “Art That Changes Seoul” program at the Seoul Foundation for Arts and Culture. She also served as the South Korea liaison for the 2019 inaugural Gender Innovation Awards, a competition founded by Impact Hub Taipei to promote creative solutions for achieving gender equality.

While a student at Claremont McKenna College, she helped facilitate an educational mentoring program for refugees resettling in the city of Claremont. She previously interned at the Council on Foreign Relations, a think tank in Washington, D.C. and NovoEd, a San Francisco-based tech company that provides cloud-based learning platform for educators and businesses.