How Can We Decolonize Impact Investing?

Raven Indigenous Capital Partners is paving the way for economic reconciliation

Why It Matters

Over the last two years, impact investing in Canada has grown by a massive 81 percent, with $14.75 billion now invested in purpose-driven solutions. But according to Jeff Cyr, of Raven Indigenous Capital Partners, there's one big problem with traditional impact investing: its lack of Indigenous inclusion. We caught up with him to learn how we can decolonize social finance.

We started #FutureOfGood Twitter chats to dive deeper into hot topics that have been resonating with our community. It’s hosted Thursdays from 12-1 p.m. ET.

We recently spoke with Jeff Cyr — managing partner of Raven Indigenous Capital Partners and Innovation Council Chair for the Indigenous Innovation Initiative at Grand Challenges Canada — about Indigenous impact investing, social financing, and economic reconciliation.

 

Photo via Raven Indigenous Capital Partners

You recently told the Globe and Mail that Raven Indigenous Capital Partners provides a pathway to “economic reconciliation.” What does economic reconciliation mean for you & Raven Capital?

Economic reconciliation means two things. First, it means building economies that work for Indigenous people where they’re at and which support Indigenous ways of knowing and being. Second, it means having the full economic participation of Indigenous people in the economy.

We have the basic drivers of economic growth wrong. What is GDP really measuring? Not prosperity. I don’t think it’s valuable. So we also need to meet entrepreneurs where they are at and with what they value.

 

What are some of the barriers Indigenous communities currently face in accessing traditional funding?

Collateral is a huge problem, since it drives most debt financing. Given colonialism and the Indian Act, it is not as easily available to Indigenous people, and intergenerational wealth is largely absent. So there is a big gap in access.

It is also hard to grow a business on debt, especially in tech and bio-tech. That’s why we focus on equity. Working with Indigenous business, private capital is key. We’re currently drinking from the straw of private equity — we want to open the fire hose.

On the debt side, Aboriginal financial institutions do a really good job in the marketplace. In general, though, there is never enough funding for communities and government funding is often burdened with conditions and ridiculous reporting. I think there is plenty of evidence over the last 200 years that it’s not working. It isn’t getting better.

 

How do you Indigenize or decolonize impact investing?

Decolonize — love it! Indigenous ownership and control is key, of both the business and the capital. Following that, we need to focus on different impact measures and build Indigenous indicators of success that matter to communities. This leads to different decisions and outcomes. We often say that we’re profit-seeking, but not profit-maximizing.

 

As we move away from investing models that place a premium solely on profit, how can Canadians invest more holistically?

Canadians need to take more control of their investing. Ask for the social impact of your products and make the money people respond. That pressure works.

Some funds have environmental, social, and governance screens and impact narratives, but look deeper. Ask tough questions. Big change can come through investment practice — even reconciliation.

 

How do we modernize the way that Indigenous culture and knowledge is preserved and communicated to bridge the gap between Indigenous and non-Indigenous communities in a digital world?

Good question. I see a role here for intellectual property and its modernization, with room for control by Indigenous people. Along with that, there is a role for data sovereignty, which has a value and confers control. It may help bridge the gap.

 

Can you tell us about a couple of Indigenous social enterprises that are leading the way?

For sure. Our first investment at Raven Capital is Animikii, an innovative digital agency with a cutting-edge impact narrative, great innovation and growth. It’s Canada’s first Indigenous B Corp, and just recently closed $1 million in funding.

Next is Aki Energy. We’re undertaking Canada’s first community-driven outcomes contract with Aki Energy, which is a hotbed of innovation and creating social enterprises, and we’re innovating financial tools on top of their on-the-ground work.

 

You closed your first round of funding for Raven Capital earlier this week — congratulations! What’s next?

Thank you! We’ll close Raven Impact Fund I in October. We’ve already seen way more ventures and investment excitement than expected, so we’ll raise Fund II targeting $50 million, and it will start to be a real game-changer.

Raven Capital will also be building more investment vehicles with communities and creating more community-driven outcomes contracts, since there’s appetite and opportunity to bring this to scale.