The California Bay Area has a well-developed impact investing ecosystem. But trace any one initiative, and chances are it will lead back to Kristin Hull. A Bay Area native and former educator, Hull drew on her insights from education, grad school and the family investment business to become an influential voice and leader in the impact field. She is a founder of HUB Oakland, an angel investor and an outspoken champion of women and entrepreneurs of color. We spoke recently with Kristin about her multi-pronged approach to investing for change.
How did you get into impact investing?
My dad started a trading firm in our garage. I wasn’t that interested in capital markets as I didn’t see the connections to everyday life, yet from age 14 I knew about buying low and selling high as often as possible in one day. I wanted to address our vast social inequities and became a teacher in urban schools, yet kept my involvement within the family business, including summers on the trading floor in Chicago.
In grad school at Cal I learned lots about systems change and identifying the core racial justice issues being re-created, perpetuated, and exacerbated within our largest institutions. I focused on how to address issues at the roots.
My world came full circle when I founded a charter school in Oakland. When it came time to purchase our building I helped cobble together our financing—loan guarantees, grants and partnerships from the city. I realized that in addition to teaching skills, financial skills were of great value.
I really got into impact investing in 2007, after we sold our family business and started a foundation. That year I attended my first philanthropy conference, and there was a session titled “Two Percent.” Several large foundations were arguing whether they could put up to 2% of their foundation endowments towards their mission. A light bulb went off for me. I thought, wait a minute, it should be 100%! I didn’t have any history in this field so I didn’t have any artificial hurdles or barriers to my thinking.
I left the conference and started moving that money—we took it out of the market in 2007 and put it in seven different community banks, all of which were addressing our mission in different ways, from local lending to fostering financial literacy. In 2008, our endowment was up about 2% when, nationwide, foundations were down 28%.
You have a number of investment vehicles, including Nia Community and Nia Global Solutions. Can you briefly describe them? What’s the common thread?
Nia is the Swahili word for intention and purpose. Nia Community is about investing in community in Oakland. That was my original focus.
I personally was not invested in any public equities. I loved that and was happy with my investments and returns. Yet I realized my 100% impact invested portfolio was difficult for some others to understand, because it didn’t include publicly traded companies. I hand out copies of my portfolio to anyone who would like it. I use it as a teaching example, offering all kinds of local and impact investments, so I want to include every asset class – early stage angel deals, loans, loan guarantees. So I needed public equities.
I looked at what was out there. The Generation fund (known as the ‘Blood & Gore’ fund for its famous founders, Al Gore and David Blood) was at that time known as the premier public equities fund, yet I saw Nestle on the buy list. I’ve been protesting against Nestle since I was in high school! But that was the best there was.
That led me to eventually found Nia Global Solutions, bringing intention and purpose into global public equities. We use a venture-like approach of looking for and moving toward the solutions that will be needed to transition us to the next, fair, just and sustainable economy—health care, sustainable transportation, renewable energy, financial access, communication and education, and designed the portfolio around these themes.
At Nia, a strong value is diversity and inclusion, and we look for companies that include women and people of color. All of the companies we invest in have diversity in leadership. We also weave a gender lens throughout the portfolio by selecting companies with products or services that benefit women.
Is Nia Global just for accredited investors?
We currently offer a separately managed account program. Right now the minimum is $100,000. Once we reach $100 million in assets under management we will be able to offer a mutual fund, which had always been my goal so that everyone has the opportunity to invest in quality, solutions focused companies through their 401(k)s. So those early investors that are coming in now will have the extra impact of helping this portfolio reach a broader market.
Your newest addition is a Registered Investment Advisory…
Yes, Nia is now its own RIA. More on that to come!
With Nia Community, what do you look for in an investment?
I don’t look for them anymore, they just arrive in my inbox. The minute people know you’ll do angel investing with no paperwork, your door never closes! I invest in women and people of color doing game changing work. I believe when environmental justice and social and racial justice meet, the thesis and the business venture will be stronger.
How has your investment philosophy evolved?
In the beginning, in 2007 when I first started on a mission for impact, I was really just trying to get the money out into the “good stuff,” as Joel Solomon [of Renewal Partners] calls it. But then, as I got going, and especially when I got toward the target of being fully invested, there were two things that were epiphanies for me:
1) If I did less private equity and started structuring investments as loans, I might actually have more impactful results. I’d have more liquidity and the entrepreneurs could keep more ownership of their companies. I’ve definitely been rethinking terms sheets for sure. I’m also looking at what exit strategies can look like and how to keep the impact growing as companies mature.
2) I just can’t invest in any more white men unless they’re part of a diverse team. They’re already getting the money. Knowing that women receive less that 4% of venture capital and people of color just 1%, that is the most meaningful and impactful place for me to invest.
Of your portfolio, how much is women and people of color?
Every investment from the last few years is women and people of color. I did invest in Better Ventures led by two white males—they’re great tenants of our co-working space Impact HUB Oakland. I didn’t have any venture funds in the Nia community portfolio, and if you’re trying to have a sample/example portfolio, you’ve got to have funds. They’re putting that diversity lens on now when they think about who they invest in.
How do you measure the impact your investments have?
It’s a bit of a Pandora’s Box. As an impact investor I consistently ask myself: What are we measuring and what is the impact? I had my own 100% mission invested portfolio, and I realized that the most impact I could have, beyond what my individual companies were having, was to help grow the space and welcome other people into it. That’s when I decided to accept more speaking invitations, to share my portfolio publicly, and to build Nia Global Solutions. I still haven’t measured that impact!
Measuring is so hard to do accurately and effectively. Is it how many jobs? Or is it the quality of the jobs? Do benefits and flexibility come with those jobs?
I’m trying to up my impact all the time. At Nia Global we publish an impact report every quarter for our investors and advisors. It’s almost more of a teaching and engaging piece. We pick a theme every quarter—sustainable transportation or access to capital, for example—and write up why we believe it’s important. We use large print, simple designs and pretty colors—we’re really trying to invite the reader in.
You’ve made a lot of local investments in Oakland, which must offer a very tangible sense of their impact…
My local investing feels pretty tangible. When I wanted to start HUB Oakland and I didn’t have the right team, I found Awaken Café and said, that’s what I want to see. I was happy to invest in [founder Cortt Dunlap]. Awaken was a central gathering spot Occupy Wall St as well as for organizers working to bring president Obama to Oakland. Awaken has served as a gathering space for the community. Once that was up and running, I found an awesome team and we were able to launch HUB Oakland. Entrepreneurs and community members feel nurtured there and that was our intention. We just became a B Corp, so we have to measure that now, for example, how many people are starting businesses out of there.
How do you view the current state of impact investing?
We’re so ripe to grow this movement, and yet we’ve got to get it right. To be catalytic, and to achieve real change, this cannot be a white male-led movement. I started the hashtag #realimpactinvesting because just finding the Stanford guys that that have some new tech or something that we need is not enough. There are some sustainable business ideas that are great, yet unless they’re rethinking traditional hiring practices and are committed to baking in inclusivity, they won’t end up being impactful in disrupting business as usual.
We really need to see our dollars invested in the world that we all want to live in.
What advice do you have for others who want to have more impact with their investments but are not sure how to start?
My advice is, just start. Don’t get caught up in trying to do it perfectly. That can be paralyzing. I usually suggest trying to carve out some little thing that you can do on Monday. I often tell people to start with RSF Social Finance. I love that they have their investors meet with their entrepreneurs receiving their loans to determine the interest rate together. This practice is truly transformative. And with a minimum of just $1000, RSF is accessible to many. Another important step is to talk to your financial advisor if you have one. Let them know that local, inclusive and sustainable are important to you as an investor.
On another level, it’s really about getting everyone to see that they are an investor. Everyone who has a savings account, anyone who spends money—they’re all investors. We’re voting with our dollars, wherever we choose to put them.