ImpactUs Opens Impact Investing Platform
Financial technology provider and FINRA member broker-dealer ImpactUs has announced the onboarding of the first issuers to its impact investing platform, ImpactUs Marketplace. The Marketplace is a community-driven, full-service platform offering institutions, individuals and financial advisors an extensive range of private impact investing opportunities.
Currently, ImpactUs Marketplace has products only for accredited investors but hopes to add additional products for non-accredited investors soon.
I spoke with Reginald Stanley, Chief Executive Officer of ImpactUs, and Liz Sessler, Vice President of ImpactUs, about ImpactUs Marketplace and the role the investing platform will have in directing capital to impact investments—Jason Howell
ImpactUs Marketplace’s Role in Impact Investing
“Traditionally, there have been barriers slowing the flow of capital allocated to impact investments. Among them are: finding a wide variety of deals that have been reviewed and have the potential to be reasonable investments, having the ability to search investments on themes (renewable energy, sustainable agriculture, microfinance), transacting with simplicity, and keeping track of investments that have been made. ImpactUs Marketplace addresses these issues by providing the advanced infrastructure to seamlessly connect investors and advisors with mission-driven institutions, allowing end-to-end transactional and capital management capabilities.
“ImpactUs Marketplace is the first large-scale project for ImpactUs. We are a broker-dealer and FINRA member specializing in impact investing and have the only online platform exclusively focused on private impact investments in the market. Our goal is $1 billion in transactions in the next five years.”
Early Adoption and Institutional Backing
ImpactUs Marketplace has signed on four early-adopter issuers who are mission-driven institutions dedicated to building strong, healthy and successful communities:
· Iroquois Valley Farms: A restorative farmland finance company providing land access to organic family farmers, with a focus on the next generation.
· Shared Interest: Utilizes impact investors’ capital as collateral to unlock local capital in Africa and build capacity for entrepreneurs in low-income communities.
· Envest Microfinance: Uses capital to enable universal access to financial services to create the conditions necessary to empower the world’s low-income people to meet their basic needs.
· CommonBond Communities: The largest nonprofit provider of affordable housing with services in the Upper Midwest, using impact capital to acquire and preserve multifamily housing for moderate-income workforce households who support the economy and our communities.
“Funding for ImpactUs Marketplace was provided by some of the leading organizations in impact investing including MacArthur Foundation, Ford Foundation, Enterprise Community Partners and City First Enterprises. Given the potential impact of ImpactUs Marketplace on investing, we anticipate additional investors in ImpactUs Marketplace over time.”
ImpactUs Marketplace: Companies
“Companies that choose to list with the Marketplace will undergo a due diligence review on the company and the investment before their listing is available through the Marketplace. Typically, the offering will represent a portion of a deal being offered, not the entire deal (for example, $100 million offered of a $250 million deal). The offering must be U.S. exempt security. Impact can be across all sectors and global but the security itself must be in the U.S.
There are three ways offerings are structured
A fund that will remain open for on a perpetual/ongoing basis
An investment will be for only one project (capital must be raised by a certain date). If sufficient proceeds aren’t raised, money would be refunded to investors
The investment (into a fund or direct to a deal) will not be contingent on an amount, but will have a close date
One important note is that we see a very important role for financial advisors in ImpactUs Marketplace and are not trying to bypass or discourage people from using them.”
ImpactUs Marketplace: Investors
“On the ImpactUs Marketplace site you’ll find customized search options are available depending on the investment being sought (renewable energy, affordable housing, etc.). A potential investor can search by product types (debt, equity), term, minimum investment, and estimated yield. A key feature which will appeal to many prospective investors is that all deal/offering documents are online for review as well as summary information, company financials, and risks. Investors can also compare investments through an advanced search function. Orders can be placed based on term, required interest rate and dollar amount. If orders are accepted, distribution type can be direct or in the form of a donation, when allowed, which is unique in the industry.
Our pipeline is currently open to new issuers and we anticipate many new investment opportunities in the coming months. Currently, ImpactUs Marketplace does not provide secondary market trading (cannot resale investments) but that is something we are looking at for future development.”