Alex Weisberg, Head of Partnerships & Impact at JSC Impact dives into key takeaways from the 2023 Nexus Global Summit
Every year at the end of June hundreds of next generation global leaders in social change, entrepreneurship, and impact investing descend on New York City for the Nexus Global Summit where they convene to learn about global challenges, workshop solutions, and network to supercharge the impactful projects they are working on. JSC Impact was invited this year to present on the topic of Hybrid Structures for Driving Change. The assembled panel had diverse viewpoints from the impact investing ecosystem including law, entrepreneurship, asset management, and brokerage. I had the honor of introducing the panel and participating as a presenter. The panel was well attended, and the discussion was lively.
I walked away from our panel and the larger summit with several take-aways. I was struck by the number of fund and asset managers in attendance in the impact venture capital space that are interested in exploring alternative fund structures that may lead to more equitable outcomes for stakeholders and communities. While venture capital is certainly more equitable than the buy-out industry, it still largely relies on an extractive model in which wealth is generated for founders and investors, often with limited regard to the communities and contexts that these companies operate within. It may be that because venture capital as an industry saw its major growth in software companies that deploy their products across digitized distributed networks, not much thought has historically been given to the siphoning of wealth from local communities to the centralized coffers of companies and their investors.
An examination and review of this financial structure seems to be afoot, even if the exercise is still emerging. There is interest in learning how to restructure funds and investments in ways that lead to more equitable outcomes. Hybrid structures that combine for-profit and not-for-profit entities together are one possible way forward, where wealth is redistributed to communities through the non-profit side of the house. Nonetheless, the problem would remain that the for-profit side of the house concentrates capital through its activities. This may just be a reality of capitalism and markets that must be accounted for through redistribution. The outcome of the panel on this note was that governments are not the only actors of redistribution. Companies and asset managers can also engage in just wealth transfer without breaching fiduciary duty to their shareholders, as long as this goal is made clear in the governing documents or operating agreements.
