Before she enrolled at UNC Kenan-Flagler, Deb Parsons (MBA ’06) left her job in marketing and business development at software company Intuit Inc. She wanted to make a difference in the lives of people.
Parsons became interested in sustainable enterprise, which led her to Kenan-Flagler. There she led the campus chapter of Net Impact, a club that aims to change the world through business. Parsons says she realized that “Business can be a powerful tool for good.”
Now she works on that goal through Good Capital, a small investment firm in San Francisco that will invest in both nonprofits and for-profits and offer investors “investing aligned with your social values,” Parsons says. The company has raised some money for its first fund, a $30 million Social Enterprise Expansion Fund, which will provide engaged risk capital for initiatives related to work force development, fair trade, health care and education.
In its young life, Good Capital has been featured in Forbes magazine and other publications and is in the February issue of Inc. magazine.
Social enterprises are organizations that address social problems through their business model. “We’re the first institutional money for this sector,” says Parsons, vice president of operations and business development for Good Capital, which started in 2006. “By institutionalizing it, that makes more money move to good faster.”
With nonprofits, Good Capital will be repaid by participating in the performance successes of their businesses. “For example, one investment model is we could give them a loan service holiday for five to seven years while they’re able to grow and take advantage of market opportunities and really scale. Once they start hitting certain revenue milestones, then they start paying us back,” Parsons says.
The model enriches the benefits for businesses and investors. Companies “are able to actually deliver on their social mission in a much more dramatic way. For our investors, it allows them to magnify the impact of their investment dollars, not just financially but the social components,” Parsons says. “There has been a growing demand for values-based investing.”
Unlike traditional venture capital firms, Good Capital will share what it learns from the new fund to encourage the start of similar funds. “This field needs to have a more efficient model than is currently out there. It can’t be measured on the same playing field as traditional venture capital,” she says.
Parsons, 35, has many duties with the start-up. She manages human resources, finance, accounting, marketing and business affairs and raises capital.
Her job is an extension of the mission of the Sustainable Venture Capital Investment Competition, or SVCIC, which Parsons launched at Kenan-Flagler when she was Net Impact leader. In the competition, students evaluate real businesses for social and environmental impact and profitability and develop investment strategies they pitch to venture capitalists.
With SVCIC, “I really wanted to demonstrate to future leaders that you can do something powerful with business,” she says. “Capital can provide more than just the fuel in the engine. It provides people with a sense of hope.”
Parsons has carried that hope to Good Capital. “I get to engage with all these great businesses and partners that are trying to do something amazing in this world. It’s a pretty feel-good kind of thing,” she says.