As a Canadian citizen and entrepreneur, I was pleased to read Canada’s #YourBudget2018.
Specifically, more funding to women-led businesses, an approach to pay equity, a parental sharing benefit, and strengthening Canada’s feminist international assistance policy (#blendedfinance!) are just a few key elements worth being excited about.
The focus of #YourBudget2018 is spot on. However, I am concerned about how we’ll execute initiatives to achieve the results we collectively deserve. Speaking with respect to investors and entrepreneurs, surely we need greater diversity in who is valued and who makes decisions.
Increasing gender, ethnographic, accessibility, age, religious and other diversity is an absolute necessary. But what if there is a dearth of thought diversity even among a group of decision makers that are physically diverse?
As investors, why we invest & how we do so should drive what we invest in.
Marigold makes private investments using a gender and inclusivity lens. Before we invest we think about what world we’d like to live in, and map how we might get there. We then look for opportunities to partner, invest and build a better household, company, industry, community. We use this lens not only on the companies we support, but crucially and perhaps most importantly, on ourselves. A what, who and why without the how are not going to get us to that world in which we want to live.
Regarding Budget 2018, as investment firms we cannot simply allocate more dollars to women-led firms without improving exactly how we’re doing so. We need to:
- Examine and remove potential biases and power dynamics that exist in an investment or decision-making process (does the typical contrived pitch really work for many of us?)
- Change who makes decisions and ensure they are appropriately compensated (who are the principals, partners, c-suite or large ESOP holders?)
- Challenge the notion around the kinds of people and businesses that are investible (the ‘VC model’ could be considered inappropriate as most businesses are not high growth disruptors, but can be nonetheless well run, growing and profitable)
- Change the financial and deal structures provided to companies that aren’t always ‘soon to the moon’ (blended finance, royalties, buybacks and repayable contributions may all be more helpful and investor/investee aligned than straight or convertible note/equity alternatives)
- Reconsider how to exit and what it means for all stakeholders to exit (forcing an exit on an enterprise due to design limitations with most GP-LP legal structures is not realistic or appropriate for many businesses)
If we open ourselves up to self-reflection as investors, and change our why, who and how with the above, we’d be changing a process that for too long has benefited the few. A holistic change that can help us become a more prosperous, equitable and inclusive society.
We can use all the above to consider for example gender, diversity and inclusion investments to further empower vulnerable and marginalized populations in areas such as sexual and reproductive health and rights, education and training, financial inclusion and gender-based violence.
This is using finance for social change at its best. Many impact investors and international development organizations have long been building the toolkits. The above are just a few of the tools. Since they’re already under development and available, let’s use them and get to work. This is how we #Pressforprogress this #IWD2018.
#YourBudget2018. There is much to be excited about, but the building, executing, delivering for and by all societies and communities… the heavy lift, that’s what’s next. Focusing on a clear purpose (why) with people (who) and process (how) aligned, instead of striving for outcomes by any means necessary (what), will help remove social barriers and influence systems-level change. For a more diverse and inclusive society where we all not only belong, but thrive.
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