Solving for the Positive Flywheels – How companies Like Goodr Will Get Us There Faster

By: Brandon Boros

One of the questions I frequently get asked is what sorts of enterprises make great impact investments. With the impact sector growing at a breakneck pace it would seem that it should be easier to find these investments. But in some ways the plethora of options only makes it harder. Is there a profile of what makes a great impact investment or is each one different?  

I wanted to share a bit about what types of companies tend to get us excited at Align. A good place to start is by recognizing that big investment opportunities can typically be found where there are big challenges to solve. Very successful impact enterprises tend to be ones that either have an innovative idea or unlock value by linking solutions in a positive flywheel to overcome existing roadblocks to solving some of our biggest and most persistent social or environmental challenges while offering investors a compelling financial return.

Solutions don’t have to be overly complex and can be elegant in their simplicity. Goodr is a wonderful example of an investible enterprise that took a fresh look at an enduring social problem – hunger – and is delivering on impact’s promise to provide investors with multiple bottom-line returns.

The company’s mantra of feed more; waste less was inspired by Goodr Founder and CEO Jasmine Crowe’s first-hand experience. Solving hunger had always been a passion of hers, and she used to take extra food she had to make meals and feed people from her home. From the early days Jasmine was troubled by the prevalence of hunger across communities despite the plethora of excess food that exists in so many places. She created Goodr as a way to scale her vision.

The brainwave she hit upon was that hunger is not a scarcity issue but a logistics issue. Businesses and venues were simply tossing their excess food instead of trying to get it into the hands of those that needed it most. Goodr’s technology platform provided a solution – corporations pay Goodr a fee to collect and distribute their excess food to local organizations that can provide it to those who are food insecure. Corporations receive tax deductions from food they donate and are able to track everything through Goodr’s platform. The result is a scalable, revenue generating business where none existed before.

Goodr is not the only one working to solve food waste and hunger. But they have created what I call a positive flywheel – a way of creating multiple positive externalities for a range of stakeholders by helping them overcome barriers to solving a challenge.

In the United States 38 million people suffer from food insecurity while 108 billion pounds of food is wasted annually. When food is wasted, the energy and water it takes to grow, harvest, transport, and package it is squandered. Wasted food generates the equivalent of 32.6 million cars’ worth of greenhouse gas emissions. For investors, Goodr offers the possibility of compelling investment returns from a growing, profitable business as well as the ability to participate in important social and environmental outcomes. For customers Goodr offers a way for them to reduce their tax burden, meet internal sustainability goals or be a more responsible member of the communities where they operate. This is the type of positive flywheel that gets us excited.

So where do you find the next Goodr?

Finding companies that solve multiple externalities and also present attractive investment opportunities is hard to do. What’s more, these types of individual investment opportunities tend to carry more risk than fund investments because they are less diversified. The prudent investor will want to work with an advisor who can assist with sourcing and, even more importantly, the careful vetting of these types of deals using traditional market due diligence expertise along with a thorough understanding of impact outcomes. If we can direct capital to companies that solve for multiple externalities at once, together we can make headway against our world’s biggest challenges.