NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, September 19, 2013

Socially-minded investors in Ontario who want to make a difference while making a profit have a new financial tool at their fingertips.

The MaRs Discovery District’s Social Venture Connection, or SVX, is launching at the Toronto Stock Exchange Thursday.

Billed as the first of its kind in North America, the online “impact investing platform” at SVX.ca, aims to mobilize private capital for the public good, said Adam Spence, associate director of the MaRs Centre for Impact Investing, who heads the initiative.

“It is like e-harmony for impact investing,” he said in an interview. “We connect investors looking for opportunities to generate a positive impact with social entrepreneurs looking for capital investments.”

Accredited Ontario-based investors who register with the site will be able to search for investment opportunities, view entrepreneurs’ YouTube videos, business descriptions and references and put their money on the line knowing the SVX has vetted each venture for social or environmental impact as well as sound financial footing.

The new platform, (MaRs can’t call it an “exchange” for technical reasons) will be open to Ontario-based enterprises with less than $25 million in revenues.

The goal is to raise a modest $2.5 million for at least 10 of the 30 ventures it hopes to list in the first year. Eligible sectors include affordable housing, employment services, food security, renewable energy, sustainable agriculture, education, renewable energy, food security and initiatives for First Nations and new Canadians.

So far, 12 social or environmental enterprises have made the cut. They include an Oakville shoe company that sells footwear made of sustainable material and hand-crafted by African artisans; a Toronto jeweler who uses fair-trade-certified gold; a Kingston social service agency that wants to build affordable housing for people with mental health and addiction problems and a bio-gas co-operative that turns manure from the Toronto Zoo into electricity.

Would-be investors include “high-net-worth” individuals, foundations, financial institutions, philanthropists, “impact” fund and asset managers.

“We are not looking to replace the role of charities and good public policy,” said Spence, who developed the concept six years ago when he was head of the Ontario Association of Food Banks.

“Our objective is to be complementary to government, to unleash new tools, talent and capital to tackle social problems.”

The impact investing sector in Canada is expected to grow from $5.3 billion to $30 billion over the next decade, he said. The SVX can play a huge role in directing those funds, he added.

Ontario Minister of Economic Development, Trade and Employment Eric Hoskins said the SVX concept is being watched around the globe.