When Lara Viada (Madrid, 1984) started working in the marketing area she realized that this was not her thing. After her experience as a volunteer in an NGO in India, she knew that she really wanted to have a social impact, so she specialized in international development.
By then began to talk about the investment of impact, under the premise of the need to put together two seemingly antagonistic worlds such as philanthropy and venture capital. "Only with the money of the NGOs is not enough, we need to move the big capital markets. To reach sustainable development goals, we need 4,000 million dollars and we only have 1,400 million, "Viada explains.
The investor defends that companies can also solve social problems. "The philosophy is to help with an accessible model that is more sustainable over time; Many philanthropic projects remain in limbo but a company, by definition, aspires to continuity, "he says. Viada has spent more than seven years in the impact investment sector, now as director of Creas Impacto, approved by the National Securities Market Commission (CNMV) as the first European Social Entrepreneurship Fund registered in Spain. On the verge of reaching its goal of collecting 30 million euros, we interviewed it in its offices in Madrid.
Why do you create?
Creas was born as a foundation 10 years ago with the intention of changing how business and finances were done in Spain; to change the mindset and start talking about shared value and purposeful investment. How this becomes a competitive advantage and helps you grow more. It also sought to change the mindset of investors and show that you can invest with a social focus without losing the financial perspective. During this time we invested through two small funds in a total of 14 startups, of which some have been sold, such as Bluemove or Impact Hub.
After this experience, a year ago, Creas decided to grow to become a large impact investment fund. Its purpose is to support companies in the growth phase with business models based on the creation of value for society and the environment.
How is the impact investment in Spain now?
It has grown a lot, but not enough. It is more known but there is a long way to go. In Spain there is only another large impact fund, GAWA Capital, but it does not invest here but in emerging countries. Then there are small funds such as Ship2B, which has done a great job building the sector in Barcelona. There are also organizations like Ashoka that are more dedicated to acceleration or support in the seed phase. Our desire is that there are more and more initiatives like this in the venture capital sector. That there is competition is positive.
Our mission is to ask what would have to happen to make the social sector grow
Is there also collaboration?
We are all the organizations of the sector together, even with some administrations, in the Impact Forum. The objective is to create a sector and become part of the Global Steering Group for Impact Investment (GSG), an international impact investment catalyst. Our mission is to ask what things would have to happen, what laws should be changed and what resources would be necessary to grow the sector in Spain. We want to identify needs and make recommendations for improvement.
What are those needs?
The measures we propose are not very different from those that other countries have already detected and applied. It is necessary that there be a budget for investment in social enterprises at an early stage; endow them with even a legal figure; provide tax incentives to investors; more standardization and consensus for the measurement of impact, and that the public sector also has a budget to promote this type of investment, whether state or European funds. It is important that the public acts as a catalyst. We also want to promote that the administrations work with pay-for-results structures, with the so-called Social Impact Bonds (BIS).
What are the BIS?
Let's take an example: a company goes to a public administration and offers a methodology to avoid recidivism of prisoners, that is, that they do not commit crimes again and enter prison again. The Administration on duty may or may not believe it but may not have the budget to pay the startup for this service. That's where an impact investor comes in, who decides to invest in it in exchange for the Administration to return a sum for each reinserted person, not a recidivist. That is, it only pays to success.
With what eyes does the public sector see this?
We are starting to fight with the administrations and with all kinds of parties to sensitize and convince them that it is worthwhile. There are private investors willing to bet on this type of project. Together with UpSocial, Social Finance UK and Inuit we have created an organization to promote the implementation of this BIS model in Spain. We have managed to finance feasibility studies and we are waiting for the approval of several bonds applied to initiatives in the framework of employment, assistance to the homeless and children in care.
What are the strengths and weaknesses found in the sector?
Social entrepreneurship does not cease to be entrepreneurship, to be sure, and shares with it the same basic problems: a lot of bureaucracy to set up the company and difficulties to obtain financing in the early stages, to attract talent to the startups (because it is difficult to find and pay) and to manage the exponential growth of the organization.
In which areas are there more or less initiatives?
There are many in the circular economy spectrum: sustainable brands, new products, sustainable mobility, shared mobility, sustainable fashion, recycling, energy efficiency … Where little has been innovated is in the care of the elderly. There are initiatives to share house and others like Joyners or Adopt a grandfather, but many more are needed. Regarding the field of education, there is a lot of innovation in digital products but less investment is made in the system and in pedagogy, in the foundations. In social innovation we also see few projects, except for some that apply technologies such as blockchain or artificial intelligence, still very incipient. More could be done in citizen participation or transparency. A critical issue in which I have not seen proposals is in the integration of immigrants and refugees.
In what does Creas invest?
By sectors, we invest in education, health, environmental sustainability and social innovation. In each sector we try to understand which are the most pressing problems that could generate the most impact and we not only wait for the projects to arrive but we actively seek them.
01. Savana. Use artificial intelligence to make available to physicians real-time data of thousands of patients to improve the quality of diagnoses. "He has a very good team, a good database and a very clear competitive advantage. He is being able to apply his technology in hospitals, "he says.
02. ComGo. It is a platform blockchain of traceability of social impact. It offers social organizations the possibility of making their impact, processes and investments transparent, traceable and more efficient. "It stands out for its real application of blockchain. Take full advantage of this technology. "
03. CodeForAll. Portuguese company that seeks adults and children to understand the world of programming. "This helps to get quality employment to thousands of people in a sector where demand is not covered and also to develop in children fundamental skills for tomorrow," he says.
04. Koiki. "It is a social and sustainable messaging company focused on the last mile in the cities, vital for online sales. It is social because it hires people with different capacities and it is sustainable because the distribution is carried out on foot, public transport or bicycle ", explains Viada.
05. Trilema Foundation. "Through teacher training, he is being able to change education in Spain at all socioeconomic levels. It shows that there is a different educational model that works. "
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