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The Social Capital Market Landscape

Rishi Malhotra August 18, 2010

This post was written by Kevin Jones, Co-Founder of SOCAP10 and Founder of Good Capital.
If the Social Capital market is imagined as an archipelago that’s risen above the swirl of the traditional capital market, a cluster of islands grouped at the intersection of money and meaning and only partially and occasionally linked, then it’s good news that some five new bridges are coming into place that will make it easier for investors and entrepreneurs in the social capital market.
Ok, are you still with me after the mother of all metaphoric lead sentences? You can go back and fill in the blanks as the story evolves, if you want to take the time.
The news I have to deliver is this: five new tools and initiatives have been developed and each one adds to the other in a way that makes the Social Capital Market stronger and more accessible than ever before.
First, there is now a valid study that sizes up the demand side of the market for impact investing. Hope Consulting’s extremely well received report estimates the latent demand in the US to be $120 billion.
Second, there is a new a startup led by world class industry veterans, that is creating a tool to size the supply side of the market, via an index of the top 50 impact funds. Its goal is to guide investors to be able to do comparison research to help match their money with their meaning.
The third new bridge that validates the social capital market is the rise of the big funds. With Alvaro Rodriguez’s successful $102 million raise for Ignia, there are now three funds with more than $100 million in assets in the social capital market, with Leapfrog more than $100 million and Blue Orchard at $1 billion plus on the microfinance side with an additional $30 million on the impact investment side through Blue Orchard’s Oasis Fund. And Microvest is knocking on the door with more than $90 million under management. How did these funds raise the money and what challenges did they face? They will tell their story at SOCAP10.
Fourth, and at the opposite end of the market, but equally a proof point of new vitality, is the flourishing of seed investing, led by Gray Ghost’s Bob Pattillo and the First Light crew. One more time, Pattillo was right about where to focus earlier than anybody else, and he’s having a catalytic impact again.
With the final and fifth bridge, philanthropy is coming to the Social Capital Market in force and in some kind of merging of two island groups or new trading compact. This is being led by Sean Stannard-Stockton.
So those are the five new pieces of infrastructure rising up in this emerging market, the bridges between what can feel at times like isolated islands, the bridges that create easier access for new partners, investors, and entrepreneurs, that we will be highlighting at SOCAP10.
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