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Green Investing with Aravaipa Ventures

Daniel Epstein October 15, 2009

You’d be hard-pressed to find a better climate for environmentally-focused start-up ventures than our hometown of Boulder, Colorado. So, we thought, why not go local (and reduce our transportation carbon footprint) and interview Robert Fenwick-Smith from Aravaipa Ventures? Aravaipa Ventures is a venture capital fund that invests exclusively in Colorado-based green startups. Its militant focus on supporting innovative, green companies has led to a financially-promising, cutting-edge portfolio that may have significant effects on how we flush toilets, use windows to improve test results in schools and heat buildings, and make chocolate available to the the nut-allergic population.

Video Interview Table of Contents:

  1. What does Aravaipa Ventures do and how did you get involved? (0:01-1:03)
  2. Why does Aravaipa invest in green ventures instead of traditional for-profits? (1:04-2:00)
  3. Have you had to sacrifice financial returns for social returns? (2:01-2:50)
  4. What do you look for in the entrepreneurs you invest in? (2:51-5:12)
  5. What’s the best investment you’ve ever made? (5:13-6:07)
  6. What is Aravaipa Ventures doing to pave the way for mainstream investors to become green? (6:08-7:53)
  7. What advice do you have for aspiring social entrepreneurs? (7:54-9:00)

Portfolio. In an effort to showcase Aravaipa’s portfolio, I could draft up typical bulleted list or a few summarizing paragraphs. Instead, I want to walk you through a hypothetical scenario in which, sometime in the not-too-distant future, you decide to accept an office job in one of Boulder’s first green buildings. You start your first day like most of your fellow employees with a cup of freshly-roasted coffee. After a few hours at your desk, you decide to head to the restroom. Most buildings unnecessarily use drinking water to flush their toilets, but thanks to Water Legacy, one of Aravaipa’s portfolio companies, your building reduces its water consumption by one-third by recycling gray water used for washing and laundry to flush its toilets. You then wash your hands in the sink with soap provided by Vision Chemical Systems, which supplies a variety of non-toxic biodegradable chemicals to companies so employees don’t suffer health hazards and to avoid pollution.
After your visit to the restroom, you return to your desk and take a look out the window to observe Colorado’s mercurial weather in action. Yesterday, it snowed three inches. Today, it’s 70 degrees and sunny. Fortunately, your office hired Ravenbrick, another Aravaipa portfolio company, to install thermochromatic windows, which change properties based on outside conditions. These windows keep heat in your office during cold days, like yesterday, and keep heat out on hot days like today. In turn, your building saves a bundle on heating and cooling costs and your office stays a comfortable 68 degrees year-round. “Time to get to work,” you think to yourself. While powering on your computer, you take a moment to appreciate how well-lit your new boulder office is. It’s all courtesy of Sunflower, a fourth company in Aravaipa’s portfolio, which installs windows that track the sun and indirectly distribute its light in a room, eliminating the need for electric light during the day. Your boss made the decision to purchase Sunflower windows when she learned that daylighting has also been shown to improve worker productivity, classroom participation, and test scores.
Although you never thought you would work in the industry, your new office job is with a yogurt company and today you received a stack of orders. Before you decide where you should send 50 tons of blueberry yogurt, you consider that if a cup of yogurt doesn’t sell by its expiration date, it winds up in the trash. Not only does the yogurt go to waste, so does the carbon footprint required to produce and ship the yogurt. To save your company money and to reduce its carbon footprint, you propose the adoption of aWhere, a local intelligence software company, funded by Aravaipa, that allows companies to optimize the distribution of their products, thereby reducing their carbon footprint and wastage. After writing up the proposal, you decide to reward yourself with a delicious snack. So you walk into the office kitchen, and since it’s getting close to Halloween, you spot a basket of colorfully-wrapped, nut-filled chocolates. Sadly, in this hypothetical story you are actually allergic to nuts. Fortunately, Sylvia, the office secretary bought a separate batch of chocolates from Seth Ellis Chocolatier, Aravaipa’s 6th portfolio company, which makes Suncups, a Reese’s taste-alike made using sunflower butter instead of peanut butter. Its production is entirely organic, fair-trade & kosher. Nibbling away on a delicious Suncup, you can’t help but smile and think “Thank you Aravaipa.”
Investment Model & Range. Aravaipa Ventures uses a successive investment strategy of only investing in green and socially aware companies in Colorado and beginning with small initial involvements, then providing more based on a venture achieving certain benchmarks. Aravaipa’s first investment is usually around $100,000-$250,000 and the maximum Aravaipa will invest is around $1.5 million.
Investor Bio. Robert Fenwick-Smith is a true citizen of the globe, having learned three languages by the age of five and having lived seven countries. Robert and his wife Felice’s passion for green and sustainability brought them to Boulder, Colorado about two years ago. They built the second LEED Platinum home in Colorado, featuring the first Greywater Reuse system in the City of Boulder. Through his role on the Board fo Legacy Land Trust in Fort Collins, Robert also brings his passion to preserving the natural spaces and beauty of Colorado.

We really appreciate Robert Fenwick-Smith taking the time to awaken our imagination about the power and potential of green investing and for sharing his insights into how to do it well!

written by: Teju Ravilochan (Unreasonable Institute)

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