SJF Ventures III, LP Venture Capital Partnership

SJF Ventures III
$75MM Growth Capital Partnership
High growth. Positive impact.
Investment Opportunity Forum
Investing for Impact Conference
May 9, 2012
Durham, NC
•
New York, NY
•
San Francisco, CA
SJF Invests in high-growth companies driving
superior investment returns and…
Portfolio Company A
Portfolio Company B
Revenue
$30M
Revenue
$50M
Revenue
$47
$24
20
$17
$19
$18
$21
$11
0
40
10
$2
2002 2003 2004 2005 2006 2007 2008 2009 2010
0
Portfolio Company D
$2
$3
$4
2004 2005 2006 2007 2008 2009 2010
$29.7
$30M
$9.6
$10M
8
20
4
$8.5
2
2009
2010
2011
2002 2003 2004 2005 2006 2007 2008 2009 2010
Portfolio Company F
Revenue
$10M
$7.8
$6.9
6
$4.0
$5.3
4
2
2
0
0
2009
$25
$4.3
$0.9
0
$2 $5 $7 $8
$15 $18
8
6
10
0
Portfolio Company E
Revenue
Revenue
$100
50
$11
$5
$130
100
20
10
$150M
$39
30
$14
$3
Portfolio Company C
2010
2011
$3.2
$1.5
$0.2
2005 2006 2007 2008 2009 2010
Average revenue of $13MM at the timeConfidential
of investment for SJF II portfolio companies
…positive environmental and social impacts over
the last 12 years
Environment
• >2.2MM MWh of RECs
sold
• >15MW solar installed
• >3MM cell phones
reused or recycled and
97k tons of materials
recycled
• >20MM sq ft of real
estate consulted on
energy efficiency
• 31k acres of farmland
converted to efficient
irrigation systems
3
Job Creation/
Enhancement
Education/
health
Community
• >7,500 individuals
employed across 108
locations in 26 states
• 350k students online
and print curriculum
created annually
• $2B of donations
facilitated to >300k nonprofits and charities
• 77% of SJF jobs are LMI,
59% of employees are
minorities and 60% are
women
• >60k continuing medical
education certificates
per month
• Many sponsor local
charities such as Red
Cross, Rural Action,
Children's Services, job
readiness, homelessness
& families at risk
• 763 green collar jobs
created
• 13 companies offer
broad-based stock option
plans, profit-sharing, or
retirement plans
• 4MM lbs of organic and
all-natural food
• 100% of SJF companies
offer health care
insurance, 82% pay
majority of premium
• Facilitate work between
256 disadvantaged
contractor companies
and large retailers
First national SBIC Impact Investing fund & GIIRS Pioneer Fund
Confidential
Impact Stories: CleanScapes
The Company Story
The Human Story
• Sustainable solid waste and
recycling collection company
The Impact Stats
• Environment
o
o
• Started in 1997 with 32
private property contracts,
and a progressive employee
engagement strategy
• Initial business provided
sidewalk sweeping, graffiti
removal and dumpster-free
alley bag collection services
for commercial buildings
• Grew to $47MM in sales and
>260 employees and remains
dedicated to improving the
environment and community.
o
“We have one manager, Leo,
who started with us as an
$8.00 per hour cleaning staff
member five years ago. He
now runs operations for our
San Francisco office and is a
tremendous asset to the
company.”
Recycled 96k tons in 2010
CNG trucks displace diesel
Incentivize and educate
customers to reduce, reuse,
recycle
• Job Creation/Enhancement
o
o
o
o
205 low/moderate income jobs
Progressive workforce culture
Clear bonus structure
Lower turnover than industry
• Diversity
o
o
46% women or minorities
Women half of management
• Community
o
Provide neighborhood awards
based on waste reduction
competitions
4
4
41% investment
IRR at exit
Confidential
SJF has evolved from “mission-first” to “superior
returns” investor
Vintage
Focus
# Cos.
1999
2001
Gen A
Gen B
Mission Market rate.
first
Cleantech &
workforce
innovation
10
Size
9
$17MM
2004
2012
Market rate.
Cleantech and
workforce
innovation
Superior returns
Positive impact
16
15-20
$28MM
$75MM
Non-profit Partners
5
Confidential
SJF Institute and Investors’ Circle Build the Field for
Impact Entrepreneurship and Investing
Angel and Fund Impact
Investor Network
High-Growth and Impact
Enterprise Capacity Building
• Prepare enterprises to
raise capital
• Cleantech and impact
entrepreneurial assistance
• Mentoring and national
connections
• Employee engagement
6
Scaling positive
impact
entrepreneurship
and investing
• Capital for high-growth
enterprises
• Value-add investors
• Financial AND impact
assessment
• Connect to mainstream
investment capital
The organization is led by investors with strong
venture and sector expertise
12 years
organizational history
Cohesive, tested team
Extensive venture
experience
Early venture investors
in cleantech
Excellent networks
& deal access
Nationwide geographic
footprint
7
David Kirkpatrick
Investment
Committee
Investment Team
Rick Defieux
Investment
Committee Chair
David Griest
Investment
Committee
Investment Team
• Sectors: solar, energy
efficiency
• Sectors: energy efficiency,
power electronics, energy infra.
• Sectors: reuse/recycling, food/
safety, grid infrastructure
• Co-founder and Managing
Director
• >10 yrs of VC experience
• >20 yrs operational and
investment experience in
cleantech
• Previously with Kirkworks and
SunShares
• Co-founder SJF Ventures
• >20 yrs of VC experience
• $97MM returned on $42MM
invested in 25 deals
• Cleantech Pioneer Award for
early cleantech investing
• Edison Venture Funds I, II, III;
Battelle Ventures
• Managing Director
• Joined in 2004
• >12 years of venture capital
and investment banking
experience
• Previously with Croft &
Bender/ C&B Capital
Alan Kelley
Investment
Committee
Investment Team
Arrun Kapoor
Investment
Committee
Investment Team
Cody Nystrom
Investment Team
• Sectors: digital media, health
care IT
• Sectors: water infrastructure,
data center/energy mgmt
• Sectors: waste/biogas,
sustainable agriculture
• Managing Director
• Joined 2006
• >15 yrs of VC & investment
mgmt experience
• Previously with Trusco Capital
Management. Top quintile of
Lipper Science & Tech Funds
Universe
Confidential
• Managing Director
• Joined in 2008
• 7 yrs of venture capital and
management consulting with
Bain & Co.
• 6 years entrepreneurial
experience
• Principal
• Joined in 2007
• 7 years of venture capital and
investment banking
experience
• Previously with Ewing Bemiss
SJF has developed distinct areas of focus
Clean Technology
Energy
Sustainable Food
& Agriculture
Portfolio
Materials Reuse/
Recycling/
Reduction
8
Confidential
Tech-Enhanced Services
Efficiency/Grid/
Infrastructure
Business Services
Digital Media &
Web Services
Impact Validation: Credentials supported by the
Industry
9
Participating as
one of 12
domestic Pioneer
Funds
Selected to list of
Top 50 impact
investing
alternative assets
Will be the first
national fund in
the new Impact
Investing Program
We are a
registered B-Corp
We have
conducted ten
years of impact
reporting
Non-profit affiliate
drives impacts
across thousands
of social
enterprises
Confidential
Our limited partners are early leaders in impact
investing that seek strong financial returns
10
Confidential
Evolution of SJF - Heron Partnership
11
• $500,000 in SJF II
• PRI Investment
• Expectation for belowmarket rate returns
• Endowment investing
separate from mission
investing
• $2MM in SJF III
• MRI Investment
• Expectation for abovemarket rate returns
• Movement to 100%
mission investing by
unified investment team
• $340k in grants over last
10 years
• Interest from SJF II PRI
investment
• Wealth building assistance,
impact assessment tools
• General support and
capacity building grants
through 2012
• Leverage network for
additional PRI partners and
‘equity capital’
Confidential
SJF Ventures and Institute PRI Model
PRI
Limited Partners
Interest income
Limited Partners
$
PRI
$
SJF
Institute
Escrow Account
Held by SJF Institute
$
Returns
10% Capital calls
10% Capital calls
$
$
SJF Ventures III, LP
Venture Capital Limited Partnership
$
Equity investments
$
Returns
$
Portfolio companies
12
Confidential