San Francisco, CA
Ethic wants to change the way the world invests, by bringing sustainable investment options mainstream. The founders of the company have spent years advising esoteric investment strategies and have seen that value-based investing does, in fact, offer competitive returns.
At Access Ventures we strive for complete mission-alignment with all our funds. Most of our activities, especially direct debt and equity investments, are a straightforward fit with our mission. These investments match a pre-existing investment or program vertical, we screen management for impact purpose, and we remain close to the operations to monitor progress.
However, when it comes to funds placed in public markets, ensuring mission fit can be tremendously difficult. The first challenge is to find meaningful impact information to evaluate. Some companies may provide some corporate-responsibility data, but most do not provide enough information to become comfortable with fit.
Secondly, traditional wealth managers are not equipped to see value in this type of investment. A fixed, portfolio management theory, approach sees value-alignment as a limiting factor of diversification, thus increasing overall risk.
These challenges, along with numerous others, is why Ethic exists. The team is dedicated to making value-based investing a logical choice. They start by building a system to evaluate value-alignment of organizations based upon structured and unstructured reporting. Essentially, they pull together a corporate profile based on impact reporting that is largely narrative-based.
The company is then able to create low-cost equity products, similar to index funds, that provide wide diversification while removing toxic elements from your holdings.
This focus on value-based investing provides differentiation in a crowded and fast growing market of robo-advisors, which is on it’s way to managing over $2 trillion.
How We Helped
We participated in a quasi-equity round of investment that provided capital necessary to complete product build out and initial go-to-market efforts.
In addition to our investment in the company, we are also going to use the platform to manage some of our public-investment dollars.