Connecting Community to Opportunity Through Impact Investing
Recently I sat down with Brian Smith, CEO of Rhiza Capital, Co-Founder and owner of Persephone Brewing (both fellow B Corps) to discuss how investing in local, forward-thinking businesses can deliver strong returns.
Bernie: So, why would you step down from a successful and growing craft brewery to start an impact venture fund?
Brian: There’s a huge opportunity investing in companies that have innovative product and that can also move the needle on the critical issues we face – like climate change, health, isolation and food security. I also noticed a gap in funding available to early stage businesses where a savvy fund manager could create real value.
Bernie: Tell me more about Rhiza.
Brian: Rhiza Capital has a portfolio of funds that bring impact investing to the masses. Our flagship fund, Coast Venture Root 3 (VCR3) is our most ambitious yet with a goal of $25 million into high-growth/high-return ventures that are screened for their positive social or environmental impact. Rhiza is unique in that we’re an investment firm born out of a credit union and Community Futures, a non-profit that provides business finance on the Sunshine Coast. We have a solid foundation, have made more than 20 investments so far, and are ready to welcome new investors to move things to the next level.
Bernie: What can investors expect when they come into CVR3?
Brian: Right away, a 30% refundable tax credit. We are a registered VCC which means there is an immediate tax benefit to investing – individuals get 30% back from the Provincial government. Over the lifetime of the fund, investors should expect about a 15% annual return on their capital.
Bernie: And what about fees?
Brian: Part of bringing impact investing to the masses is proving to our partners that investing with integrity, sustainability, and diversity at the forefront can deliver above market returns. A big part of that is ethical, transparent fees. I’ll save the technical details here, but our fees are capped.
Bernie: When you say “impact” – what does that mean?
Brian: We’re sector agnostic to a certain extent, but every investment we make is in some way related to the UN Sustainable Development Goals and delivers a social or environmental good. We use the B Corp Impact Assessment to verify that every business model has an ethical, equitable business model.
Bernie: Anything else potential investors should know?
Brian: No longer do we need to separate our philanthropy from our investing portfolio. The time to make an impact with our money is now. The field is mature and the opportunity is real. You can invest in local, impactful companies and make money. I sincerely hope that qualified investors choose Rhiza to invest with, but honestly, I just hope that people en masse choose to align their capital, their insurance, their mortgage, and all their investments with the things they care about. With Rhiza, they will be investing in BC-based, well managed, innovative companies such as Food Mesh that will make a difference in their home province and deliver a sizable return.
For more information about Rhiza and the opportunities it provides, contact Brian by email at [email protected] or connect with him at 604-928-8931.