Canopy Launches Innovative Investment Research and Education Program
Last week we at Canopy published the beliefs and guidelines that are guiding our approach to investment research and capacity building here in the Pacific Northwest. The sixth, but arguably most critical of these “Investment Beliefs” is this:
A thriving regional investing ecosystem will require new systems, tools and intermediaries to meet the unique nature of place-based investing. Communities lack the capacity to absorb capital at the scale that drives global investment markets. The same innovation and rigor used to build today’s capital markets can be transformed to develop healthy regional capital markets.
It is with this guidepost in mind that we are excited to announce that Gilded Rogue is the first investment fund selected by Canopy for investment research, training and capacity building.
Focused on scaling businesses in rural communities in Oregon and Washington, Gilded Rogue’s strategy is aligned with Canopy’s investment beliefs and criteria. As private equity investors, Gilded Rogue invests in companies representing annual revenue of $1-10MM, providing capital, expertise and a path to profitability. Their preferred exit strategy is to broad based employee ownership such as ESOPs (employee stock ownership programs) and other structures looking to keep equity and grow income equality in rural communities. Their fund has made initial investments into two rural companies: Basil & Berries and Roguewood. Gilded Rogue is beginning a $40 million fundraise.
By engaging with Canopy, our hope is that Gilded Rogue will gain visibility with institutional investors and investment advisors, and become better prepared to unlock institutional capital and scale their work.
Canopy is conducting research on new and early-stage regionally-focused investments in the Pacific Northwest. We’re doing this as part of an initiative to help address some systemic challenges many entrepreneurs and investment fund managers face in the market.
One of the widely-held objections and relative unknowns for regional investing revolves around the lack of quality investable opportunities and deal flow. This is attributable in part to an investment process developed to support large pools of institutional capital and the prohibitively high costs of conducting quality investment manager due diligence. Developing an actionable investment pipeline through a regional lens is a costly and time intensive process. Canopy exists to break down the current silos that create these barriers to entry, and open the tent to create a robust regional investing ecosystem.
Canopy will begin to address these issues by conducting, in partnership with Threshold Group, a regional capital scan of the Pacific Northwest. In the process, we’ll gather data, identify capital gaps and opportunities, and map players in the ecosystem, including incubators/accelerators, investment fund managers, public funding sources and unique collaboratives operating and investing in the region. Canopy will also publish case studies around innovative approaches to solving regional investment challenges and share learning from regional stakeholders.
The capital scan will serve as the starting point to identify investment opportunities for Canopy’s research process. Selected managers will benefit from our engagement in three ways. First, following the completion of investment research, it will be shared with Canopy’s members. Canopy will not provide investment recommendations however; based on the information provided, members will have the option to independently or collaboratively invest. Second, Canopy and its strategic partners will provide feedback to managers on the due diligence process. This feedback will help managers understand gaps in process, terms and documentation so they can pursue other sources of institutional capital. Finally, managers will participate in a hands-on training program led by Canopy and the Global Impact Investing Network (GIIN) and be paired with experienced mentors. This training will help managers develop the acumen to navigate an institutional diligence process and track regional community outcomes.
Leading up to the release of the capital scan in late 2015, Canopy continues to move forward with a “pilot” approach to investment opportunities that are aligned with our investment beliefs and criteria. We are undertaking initial manager research to test our process and provide early Canopy investors with actionable investment information.
For more information or to contact Gilded Rogue directly, go to www.gildedrogue.com or email firstname.lastname@example.org.
Canopy’s welcomes your thoughts/questions/comments below or feel free to email us here.
Additional information on Gilded Rogue
by Craig Muska, President & Founder, Canopy