During the Global Entrepreneurship Summit (GES 2016) at Stanford University today, AngelList, the equity fundraising platform, and activist Shiza Shahid announced a partnership to form a fund called NOW Ventures that will back what they’re calling “mission-driven” startups.
That’s the latest label for businesses that want to make a positive social and environmental impact, while generating profits. These startups have been previously known as for-profit for good companies, world positive or social ventures, and double- or triple-bottom line businesses.
NOW Ventures promises to invest in startups whose founding teams are diverse and include women.
An advocate and activist for girls’ education and gender equality since she was 14 years old and living in her native Pakistan, Ms. Shahid is best known as a co-founder of the nonprofit Malala Fund with Nobel Prize winner Malala Yousafzai and her father, educator and activist Ziauddin Yousafzai.
For the unfamiliar, the Taliban attempted to assassinate Malala Yousafzai in October of 2012 when she was just 15 years old. She was targeted because she repeatedly wrote and spoke out about her experiences trying to attain a good education under the Taliban’s increasing military hold on her town. The Taliban shot her in the head, neck and shoulder while she was seated on a school bus en route home. She survived and continued to share her story.
By the time she was discharged from the hospital in January 2013, a huge international and online outpouring of support for her and her family helped bring about a change in laws in Pakistan. The country ratified a Right to Free and Compulsory Education Bill in light of her struggles.
The Malala Fund works to enable girls to complete at least 12 years of safe, quality education, according to its website, in communities across: Pakistan, Nigeria, Kenya, Sierra Leone and for children who are displaced Syrian refugees.
Ms. Shahid said despite her success building awareness and organizations in the nonprofit world, she is convinced that companies that generate profits to sustain themselves, while also helping others, have a better chance to effect big changes in the world, and can do so more quickly than nonprofits and philanthropists.
“The hypothesis we aim to prove is that mission-driven companies are a better investment than purely profit-driven companies. We believe that they are creating more loyal customers, and generally aim to solve large problems, rather than to create cute apps,” Shahid said.
A graduate of Stanford, Ms. Shahid admits she has no experience running a for-profit company or investing in startups, so she has enlisted AngelList’s Chief Executive Naval Ravikant and Chief Operating Officer Kevin Laws to teach her the ropes and run the fund with her.
According to Laws, he and Ravikant will help NOW Ventures raise capital from limited partners, scout deals, conduct due diligence reviews of startups considered for investment and participate in the investment committee for NOW Ventures, casting votes that decide which companies the fund will back and how much they will invest.
Silicon Valley Bank will serve as an advisor to the fund, as well, but does not have any members on the firm’s investing committee.
Laws said that in addition to helping NOW Ventures form its fund and make deal decisions, AngelList will provide research organizations with extensive data about founders and investors, so they can determine “what works in mission-driven investing, and what doesn’t.”
And, of course, deals where NOW Ventures invests its own capital will be syndicated via AngelList to the site’s network of accredited investors, who may add their own capital.
NOW Ventures is raising its first fund as a 506c offering, which allows NOW Ventures to broadly solicit and advertise the fact that it is seeking capital from limited partners.