One of the Investors' Circle members, Jay Coen Gilbert, echoes that sentiment: "I don't think we should be pursuing values-led businesses or justifying values-led decisions on a rate-of-return basis. I think we should be doing them because they're the right things to do. And if it costs more money, that wouldn't mean it's wrong to forge a path to sustainability. It just means you have to work harder to figure out how to make a business model out of it."
Not all Investors' Circle members are as dyed-in-the-wool as Chappell and Gilbert, of course. They come from a wide variety of backgrounds and have many agendas. And while environmental sustainability and social progress are important for all of them, some are more committed to those principles than others.
Tasch is more radical than many of the members of the organization, and he has some very ambitious ideas for Investors' Circle, beginning with its structure and purpose. "There's a real herding-cats mentality to it now," Tasch says, describing the serendipitous nature of deal making that happens now, with the organization simply bringing entrepreneurs and members into the same space and hoping sparks fly. Considering the diverse and wide-spread membership and the challenges inherent in sustainable business and angel investing, Tasch says, the current approach "could be described as the most ass-backwards social-change strategy ever devised. How would anything ever get done? The beauty is, something is getting done, even without proactive direction from infrastructure. But maybe if we create a pooled vehicle that is dedicated, we can have an even better outcome for the companies and the investors."
Investors' Circle took the first tentative steps toward this goal in 2000 by starting a small fund called Common Capital. It started with $13 million and 30 IC members, together with 12 outsiders and two foundations. Tasch says the fund is now two-thirds invested and has some promising possibilities coming up. Even this, though, is not as focused as he would like, and is really just a way of testing the water. "I certainly hope that over the next five to 10 years there will be a family of social purpose entities that we can incubate," he says.
Tasch is particularly interested in agriculture, and Investors' Circle has received a grant from the W. K. Kellogg Foundation to explore a food fund that could help investors support organic-food enterprises that don't necessarily meet conventional venture-capital standards. But Tasch sees food as more than just an investment opportunity. He praises the Slow Food movement, begun in Italy in 1986 to promote regional traditions, wholesome ingredients and food as culture. "I look at the world food situation," he says, "which seems so dire, and at the same time I think people's approach to food can be a pretty powerful way to get them in touch with what's going on in the world. You put food in your mouth, so there's the pleasure part of it. We all know how much more satisfying it can be to buy food from a farm stand than a superstore. No one needs to put in words why you like driving down a road and seeing a small farm." But, he says, most people don't make the next leap and tie it all together into one worldview.
Tasch himself has made a leap from the Slow Food idea. He says he is now "noodling" with the idea of slow money.
"If it's all about speed and increasing shareholder value and 20-percent IRR and drive, drive, drive," he says, "you're going to get one kind of company. And if it's more about the other kinds of things we care about as entrepreneurs and people, we get another kind of company. So why can't we think about another kind of dollar that would be associated with that?"
He has, in fact, hired a staff person to explore whether some kind of fund might be set up to accomplish that very goal. In the meantime, there is an opportunity to test the concept with Farmers Diner, the local organic-food restaurant. The entrepreneur behind Farmers Diner has one restaurant now open in Vermont, but going from a single restaurant to a chain of them, particularly with such a stringent conceptual mandate, is an enormous challenge. "He's got his work cut out for himself," Tasch says, "and the cards are not stacked in his favor. From a venture-capital standpoint, all the red flags are waving. Every single thing you should not want is present. But he's a really talented entrepreneur, and to me this is a no-brainer. We have to try to help this guy. He's got a huge thing he's trying to do—it's really hard, but he's already gotten somewhere, so now it's no longer time to say, 'Here's why it's a bad deal.' We've just got to get in there and help him."
On the surface, this sentiment appears to be mere philanthropy (or gullibility). But Tasch has something altogether more radical in mind. He wants to revise capitalism itself, to rethink the driving force of profit: "Somehow we've got this bifurcation that we've got to invest, put the money we make into our own bank account, and then we can take 20 percent of it, 5 percent of it, 50 percent of it if we're really generous, and give some of that away. I don't get that. I really don't. To me, it's not about how much money I or any other investor can take out of a deal for our own benefit. It's more about how we can use the assets to create the most good the fastest, given the state of affairs in the world. Whether we get the benefit back into our portfolio or not, someone's going to get the benefit."
As we sat on Tasch's patio, with his unorthodox house behind us illustrating the point, he explained that this rethinking is driven less by philosophy than need. Between escalating habitat destruction, unchecked pollution and unexpectedly swift climate change it is simply not possible to go on with business as usual. "I just feel like we're an impoverished nation and society if the wealthiest people on the face of the planet cannot integrate the idea of investing and giving back," he says. "Given the state of the world, there's no time to do the wealth-now-philanthropy-later thing. We've got to engineer something, and it's got to be all at once, all at the same time: Do as little harm as possible while we're creating wealth."