Better Ventures: Backing Entrepreneurs Building a Better World

by Jennifer Walske and Laura D. Tyson
01 Jan 2017

This case centers on BV as it seeks to raise $20 million for its first standalone fund between 2014 and 2016. Wes Selke and Rick Moss, the two BV co-founders, had built their experience in impact investing when they founded and managed Hub Ventures (HV) (a smaller accelerator-type fund of $500,000) immediately prior to founding BV. Encouraged by the economic return and social impact from those early-stage, mission-driven HV investments, both Selke and Moss decided in late 2014 to raise a separate and much larger fund called Better Ventures Fund II (BVFII). This new fund would allow BV to make larger initial investments in its early stage portfolio companies and provide the needed capital to make add-on investments in subsequent financing rounds. The case discusses the challenges of raising capital for this new fund as well as BV's investment and impact theses, deal sourcing, and post-investment approach. The case eventually explores the next steps for BV, after successfully raising this first-time fund.

Learning Objectives

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The purposes of this case are fourfold: 1) to illustrate the challenges of establishing a venture capital firm in the emerging impact investing sector 2) to understand how both venture capital and impact investing are changing, so that a micro-VC firm like Better Ventures (BV), positioned in the seed stage investing category, can emerge and grow 3) to discuss the trade-offs, when making investment decisions in early-stage, mission-driven companies, between the pre-determined investment and impact theses and the desired financial and social impact returns, and 4) to explore how a venture capital firm can remain sustainable, by achieving these both types of returns, building out the operations, and preparing to raise its next follow-up fund during the next two to three years.

Details

Pub Date: Dec 31, 2016

Discipline: Social Enterprise

Subjects: Finance, Entrepreneurship, Venture capital, Corporate social responsibility, Green business

Product #: B5882-PDF-ENG

Industry: Venture capital,Finance & insurance

Geography: California

Length: 24 page(s)