With our #ESGinVC initiative, we want to foster a discussion around ESG and help each other develop and improve our frameworks. As part of this initiative, we spoke to leading managers and LPs about their ESG frameworks. The long-form interviews will be published in a reader on our website, while we will regularly post interview extracts on our social media channels (Linkedin — Twitter — Medium).
The extract below is from the interview with Jake Gibson, Founding Partner at Better Tomorrow Ventures
Previous interviews include: Kinga Stanislawska (Experior VC, European Women in VC), Miki Yokoyama (Tech Founders), Fabian Heilemann (Earlybird, Leaders For Climate Action), Kanyi Maqubela (Kindred Ventures), David Teten (Versatile VC)
How do you address ESG responsibility at Better Tomorrow Ventures?
We have at least one LP with an impact focus, and so we fill out the B Impact Assessment each year and have our portfolio companies do it as well. However, as a new, small fund that invests primarily in new, small companies, there’s only so much we can do. So the real answer is that we believe financial services provide some of the biggest levers possible for improving human outcomes, and that’s where we focus. The companies we get the most excited about backing are ones where we can see a clear path to better access to financial products, and growing the global pie for everyone.
Do you have any conversations around ESG and positive impact with your portfolio companies?
We use the B Impact Assessment as a bit of a motivator to get companies thinking about their own impact, diversity of their teams, how well they take care of their employees and customers, etc. Beyond that, we don’t specifically talk about ESG initiatives, but we are always talking about impact.
“…we believe financial services provide some of the biggest levers possible for improving human outcomes, and that’s where we focus.”
Some examples of companies that we’ve invested in include bringing better financial services to audiences like truckers or farmers in the US, or small business owners in emerging markets. Similarly, we’ve backed companies bringing better, cheaper insurance products to underinsured markets like LatAm. So impact is always at the forefront.
Have you talked about ESG with your LPs? What are their perspectives and how are they different from yours?
We’re pretty aligned. We have a number of LPs who invested in us because of the impact angle from financial services that I described. Even though we never market ourselves as an impact fund or ESG-focused, it’s clear from our portfolio that it’s something we pay attention to, and we have LPs who really appreciate that.
What needs to change for the VC industry to become more diverse and what are the most important actions each VC can implement here?
The industry is going to go wherever the money goes. VCs absolutely need to do a better job of investing in underrepresented founders, but at the same time, those founders are often building solutions for audiences that your average VC doesn’t understand. So we also need more underrepresented VCs.
“…ultimately a lot of the responsibility falls with LPs, who need to do a better job of backing underrepresented investors…”
This can mean that the VC industry needs to do a better job of hiring and training underrepresented investors, but that process can take a while and there’s not a lot of attrition at the partnership level of most VC firms that would free up decision-making seats for those new investors.
So ultimately a lot of the responsibility falls with LPs, who need to do a better job of backing underrepresented investors, who can back those founders and create whole new generations of great founders and great investors.
About Jake Gibson
Jake is one of two founding partners of Better Tomorrow Ventures. Before BTV, Jake co-founded Nerdwallet, one of the original consumer Fintech companies. Without any outside funding, Jake helped Nerdwallet grow from 2 people into a world-class, mission-driven team, working to build the future of personal finance. Jake stepped down in early 2014 and since then, has used his experiences to help other entrepreneurs and small businesses in any way he can.
About Better Tomorrow Ventures
BTV is a $75m fund that leads rounds in pre-seed and seed-stage fintech companies globally. They take a broad view on fintech, and many vertical SaaS and marketplace businesses fit in their purview too. BTV´s initial ticket is usually between $500k and $1.5M as a lead or co-lead investor in a pre-seed or seed round.
About Marco Cesare Solinas
Marco is an Analyst at Blue Future Partners, where he is responsible for sourcing and analysing new investment opportunities. He is passionate about Technology and Venture Capital and making an impact with investments. He focuses on both direct and indirect investments.
Previously, he has built an international and multicultural background across Italy, US, Germany, Turkey and Malaysia. Marco holds a CEMS Master’s in International Management and a Bachelor´s in Economics and Finance from Bocconi University.
Linkedin — Twitter — Medium
About Blue Future Partners
Blue Future Partners is a Fund of Funds with decades worth of experience in investing in Venture Capital. We specialize in backing Emerging Managers focused on early-stage technology investments. We are people-centric and relationship-driven. We have a global mandate and existing relationships with Emerging Managers in the US, Europe, Israel, China and South East Asia.
Website — Linkedin — Twitter — Medium