Backing the Good Guys

More investors want to back companies doing good in the world.

But what qualifies as “good” varies from one person to the next. Vanguard’s Social Index Fund invests in Wells Fargo, Pepsi, and ConocoPhillips. Probably not most people’s idea of moving society forward.

That’s why we’ve been excited about certified B Corps. A B Corp is a for-profit company that meets a list of objective social, environmental, and transparency criteria, and is publicly held accountable to factoring social benefits into its corporate decision-making.

Three years ago, we partnered with investing platform CircleUp to create a fund that invests in B Corps. To my knowledge, this is the only fund that exclusively backs the B Corp community.

We did this for two reasons:

The CircleUp B Corp Fund has now invested in five companies:

Back To The Roots makes low-sugar, organic cereal that recently replaced Kellogg’s cereal in New York City public schools. Better yet, the switch was made after a student taste test.

Soma Water makes beautifully designed water filters, both for your refrigerator in a portable water bottles. It donates 1% of each sale to promoting water preservation projects around the world. It’s now sold at Target, Bed, Bath & Beyond, Bloomingdales, and Nordstrom.

Sustain makes condoms marketed toward women, with an emphasis on natural, fair-trade materials. It was recently profiled in the New York Times.

Ruby Rockets makes popsicles into something parents love as much as kids, with whole-food ingredients and no added sugar. Its mission is simple: “We believe that it is possible for fruits & veggies to be delicious.” Last year it made its first acquisition.

B’More Organic makes organic smoothies that are now distributed in Whole Foods, Kroger’s, and Wegmans. One-percent of sales go to Jodi’s Climb For Hope.

Since these are young, privately held companies, we don’t yet have investment return information. In aggregate, though, the businesses are succeeding. Revenue among the five portfolio companies was up 52% in 2016.

We think we’ve barely scratched the surface of this trend, and companies that create social good as part of their business model will define the next generation of great companies. We’re proud to partner with CircleUp, backing the good guys and making a positive impact on the world.


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