The venture capital firm Better Ventures (formerly Hub Ventures) — which seeks out so-called “social ventures” (e.g. Tesla, Patagonia, etc.) to help fund and support — has raised $21 million in new funding via a second funding round, according to recent reports.
The news comes direct from the Oakland-based company’s managing director and co-founder, Wes Selke.
Here’s some background for those unfamiliar with the company: It was originally founded to help entrepreneurs looking to make a social or environmental impact, and was known as Hub Ventures at that time. After 3 years of operation (in 2013), the founders (Wes Selke and Rick Moss) decided to transition to become more of a “high engagement seed fund.”
What this means in practice is: investing larger amounts of capital and sticking with founders for “more than a few months of bootcamp-style mentorship,” according to Selke.
Tech Crunch provides more: “Limited partners in Better Ventures’ second fund are a mix of high net worth individuals, and mission-based investors. They include: Prudential’s corporate social responsibility group, the Schmidt Family Foundation, Treehouse Investments, and individual VC’s and tech executives including Foundry’s Brad Feld, KPCB’s Tina Ju, Evernote CEO Chris O’Neill, and Recurrent Energy CEO Arno Harris.”
How does the company choose which investments to make? Selke commented:
“A large number of companies claim to be good for people or the environment. And some industries are inherently ‘good,’ like healthcare or education. But a lot of startups make products that will only be available to people who can afford to spend, and that could actually exasperate divides in our society. A good litmus test is to ask if your company’s product or service closes an opportunity gap in society. …
“As soon as you say impact investing a lot of people will roll their eyes and think ‘concessionary returns.’ But we only invest in startups that have an opportunity to build a very exciting, scalable business. Our investment angle is that entrepreneurs are just more intrinsically motivated when they’re personally connected to a problem they are solving. When they are mission driven, they can also attract and retain top talent, people who are looking for a higher purpose in their work, which we are seeing play out in our portfolio.”
The venture capital firm apparently has a preference for working with firms working to bring down the costs and accessibility of renewable energy technologies, but does work with companies in a variety of fields, including: the financial industry, the healthcare field, and HR.
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