Diversity in investing has become a large topic of conversation recently in the startup sector, however it has mainly concentrated on investing in more female founders and particularly in America investing in black founders. Now, please don’t get me wrong, both these groups are very much under-represented in portfolios of Investment Companies and both groups deserve more investment and publicity.
However an even larger minority group, persons with disabilities, have a far smaller representation in the investment sector. There are very, very few disabled founders receiving investment and I am not sure of all the reasons. I don’t know if there is intentional bias / discrimination but there is most certainly unconscious bias – the problem of low expectations and concern over ability and talent.
This article has been written by one investor trying to do something about funding disabled entrepreneurs and disabled people who want to start a business. Hardeep has come to know the world of disability, primarily through his child with cerebral palsy and is attempting to take action to help many other people with disabilities.
In order to help many people with disabilities Hardeep must continue to raise investment so that he can continue to be able to invest in many disabled entrepreneurs. Please read his story below and if you have funds you wish to invest or know of other people, organisations or philanthropic institutions who may wish to invest in the disability field please let them know about this article. You just never know where quality interest is going to come from. And as Hardeep’s article reveals it is the quality of investors he works with that matters, not the sheer numbers.
Hopefully we can all do more to bring this important issue of investing in disabled entrepreneurs to the attention of other investors and let them know about the importance of diversifying their investments even further.
Global impact investing – A new frontier in entrepreneurship ?
Written by Hardeep Rai, Managing Director at Kaleidoscope Investments
I wanted to share with you all my inner most thoughts and feelings about an event I was recently very privileged to attend. It was the Financial Times (FT) Global Family Office Summit in Dubai on the 21st / 22nd March.
When I arrived, I didn’t quite know what to expect. I wondered if I might feel a little intimidated talking about Entrepreneurs with Disabilities (EwD) amongst all these super rich families that invest in properties and conventional assets around the world. However, I remained fixated on my mission which was to accomplish two things:
- To raise awareness of EwD on a global platform and highlight why now was the right time to be investing in them.
- To find a specific family office or two, that might be interested in helping Kaleidoscope Investments (Ki) grow internationally.
There were two sessions that I was speaking at. The first was on day 1 as part of a panel on the topic of Impact Investing through healthcare, education and societal development. The second was a breakout session on day 2, which was optional for people to attend. The topic was specifically on EwD, trends in the sector, success stories, and why now was the right time to invest in disability. This session was subconsciously unnerving me because I was worried about attendance levels. However, I did my best not to think about it and just focused on day 1.
My first memorable moment came at lunchtime. Preeya, my colleague, and I were in the lunch queue speaking to someone we knew, about Ki. There was a gentleman in the queue who overheard our conversation and in under 1 minute he had given us his business card explaining how he was linked to a family office and a royal family and that they would be very interested in learning more about Ki. This was a wonderful and exciting start to lunch. In stark contrast was a 20 minute conversation with a nice and friendly local gentleman, who was in the world of property and real estate. Whilst we discussed some interesting subjects – we didn’t exchange business cards as there was no alignment to disability for him.
Although obvious – this reminded me of the importance of the word ‘alignment’ and it kept resonating with me. Alignment is core to Ki and our ethos and those that either work with us or invest in us, must have experience with, or a genuine interest in, disability.
After lunch, I was mentally prepared for my session and approached the stage when my name was called. I had resolved that I would just do my best to speak openly and from the heart when asked various questions.
I was given the opportunity to define my motivations behind why I set up Ki and talk about how, through my son’s disability, I had been introduced into the world of EwD. I explained a little about how Ki works and why I thought now was the right time to start investing in EwD. Perhaps the most interesting moment in the session however, came around a question that was asked from the audience. It was about whether people / investors would need to ‘squeeze margins’ in order to enable / facilitate growth. I answered the question from the point of view of Ki first. I said that we already do squeeze margins from the perspective of negotiating lower equity stakes but also said that we should not underestimate the capabilities, potential and intelligence of EwD.
I then provided examples of the following remarkable individuals who have all become global phenomena’s despite having a learning disability of some sort:
Ford, Henry Ford – (worth US$188bn), IKEA, Ingvar Kamprad – (worth US$22bn), Virgin, Richard Branson – (worth US$5bn), Tommy Hilfiger (worth US$1.6bn) and Apple, Steve Jobs (late) – (worth US$3.2bn).
There were then a few seconds of pin drop silence in the auditorium as people digested what had just been said. It was like that ‘the penny has dropped’ moment. There and then, I was reminded of my initial desire to make Ki a breeding ground for the next generation of successful EwD. They don’t all have to be, billionaires but I want to create an environment where we enable EwD to operate at their optimum level and maximise their full potential.
As I walked back to my seat I was greeted by some people shaking my hand. One particularly memorable individual was the Chief Investment Officer (CIO) of a family office. He gave me his business card immediately stating that he wanted to get more involved in helping us. I must confess – this was a proud moment for me. I felt that those global family offices and investment professionals in that room that manage funds in excess of US$250 bn, were beginning to listen to what we had to say about EwD and their capabilities and potential. This was my first mission accomplished.
For the remainder of the afternoon, I felt an inner sense of warmth and purpose as more and more people approached us asking more and more questions as well as congratulating us on our initiative. By the end of day 1, I would say that Preeya and I had had around 12 meaningful conversations with people. This was very encouraging and more than I had expected. However, the pressure was now on to ensure that I was well prepared for my session the following morning.
One of the main organisers of the event, Rob Garrett, from Hezar Ventures had forewarned me about the breakout sessions. Given that the topic was very specifically about disabled entrepreneurship, he advised me not to be too disappointed if the turnout was low and that it was about the quality of attendees and not the quantity. Whilst I nodded in total agreement, I definitely was not prepared for the shock that was about to come! The room could take around 40 people and I had been secretly hoping for at least 20 from the audience of around 200. However, I was up against a very successful technology investor who was speaking in the main auditorium and many of the people present had an interest in tech investing.
Rather embarrassingly, when the time came to begin my session, there were just 7 people that attended and one of those was Preeya…
I confess to feeling quite disappointed and somewhat disheartened, especially when I looked around at all those empty chairs. This was the first time that something like this had happened to me and it was quite distracting. However, I started the session with a small joke saying that the number of people in attendance today, reflects the interest in EwD in today’s world. I continued by saying that in 2 years from now, I would hope to be back talking about the same topic, but with a queue of people standing outside the door waiting to join my session with standing room only.
I explained to those present, that to date, Ki had been approached by over 425 disabled entrepreneurs from across 21 different countries and we then discussed a few case studies. I also shared that the top 5 growth sectors for the ideas that we received were Technology, Travel, Education, Health and Food & Beverage.
After the question time was over, Preeya and I were approached by two of the attendees who were very interested in further conversations with the potential of investing. Rob’s words of ‘quality, not quantity’ rang in my ears and I felt content and a true sense of happiness that my second mission looked like it was heading in the right direction.
After a short period of reflection and calm once the session was over, it then suddenly dawned on me, like a revelation from the good Lord, what our global strategy for growth must be. It was like a vision that was so crystal clear. Ki must collaborate with family offices across the world, that are looking to diversify their portfolios internationally. Each family office only need to allocate a very small fraction of their Funds under Management to Ki. As a collective we will then grow the EwD movement worldwide. It was really that simple.
Why do I say this?
Many of the family offices I have spoken with have set up their own foundations and are interested in impact investing. Whilst almost all still invest in traditional bricks and mortar style investments or listed stocks and shares, there is a big appetite for placing a small amount of capital into higher risk investments especially those that have a positive impact on society. Many also have a mindset that is venture philanthropy based which means they do ideally want their investment back with some return, but they are typically not as aggressive on what those returns are. Families also tend to be more nurturing by nature and therefore more patient with their investments. Patience is an absolutely critical quality in the world of disability and I have witnessed this first-hand on a number of occasions.
There was an interesting report I read recently that was published by the FT called *‘Innovation in Family Businesses’. Following a survey of 113 UK based family businesses, the conclusion was that although many family offices invest less than 5% in Research and Development (a proxy for Innovation), a considerable number were able to convert this into revenue generation that was greater than other firms that had invested more heavily in R&D.
My personal observations following the conference was that there was a definite appetite to invest in an alternative market place as many investors are searching for new trends and initiatives. After being in the world of entrepreneurship for almost 10 years and working specifically with entrepreneurs with disabilities for the last 2.5 years, I can genuinely and honestly say that I have learnt about a new breed of entrepreneur that I didn’t know existed – the EwD…
Their resilience, passion, enthusiasm, determination and drive – is beyond comprehension and it comes from a deep inner place that most of us cannot even come close to touching or begin to fathom. A place where all hope was once lost…but then found – and transformed into an insatiable hunger and desire to achieve and give back. All they need is nurturing, guidance and direction and to be given a chance, and that is exactly what Ki was created to do.
If Ki joins forces with family offices from around the world and we all collaborate, then I am convinced beyond doubt, that we can make disabled entrepreneurship the next global phenomenon that it truly deserves to be.
My sincerest thanks go to Rob Garrett for giving me the opportunity to have a voice on this incredible global platform. I would also like to thank and congratulate the Financial Times on hosting an excellent conference in all aspects, but particularly from the point of view of the agenda, the speakers, the attendees and the superb moderator (Hugo Greenhalgh).
If you are a family office that are interested in getting more involved then we would love to hear from you. Please contact:
[email protected] or call 07720 242 548
Event itinerary: http://familyofficeforum.ftadviser.com/events/dubai.html
Rob Garrett: http://www.hezarventures.com