Patagonia Invests: $20 Million & Change

Venture Capital Fund Makes Environmentally and Socially Responsible Investments

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Bureo, a B Corporation supported by Patagonia’s venture capital fund, makes skateboards from recycled fishing nets.
Photo by Kevin Ahearn

Patagonia launched $20 Million and Change, a venture capital fund, in 2016 to support companies that aim to do environmental and social good. Patagonia CEO Rose Marcario, who worked as a private equity investor before joining the company in 2014, says, “We wanted to take a completely different approach, to support businesses and hang in there for the long term. It’s very different from most models for startup capital.”

All fund recipients are early-stage companies, with no guarantees of success. But if they do grow, they will do so by “working with nature rather than using it up,” as Chouinard puts it.

Three funded companies, Bureo, California Safe Soil and Yerdle, exemplify what’s called the “circular economy,” which is designed to eliminate waste and pollution by turning products at the end of their lives, such as fishing nets, into something useful, like skateboards.

About 1,000 companies have sought funding from $20 Million & Change, according to Phil Graves who oversees the fund. “We spend a lot of time on due diligence, especially on the social and environmental side,” he says. “We ask each company to fill out the B Impact Assessment before we invest. This tool helps us separate the wheat from the chaff and provides a nice framework for our portfolio companies to maximize their positive social and environmental impact over the long term.”

Most investments are between $500,000 and $1 million, although Patagonia put $13 million into a Hawaii solar-energy fund with Kina’ole Capital Partners. Along with money, Patagonia offers advice, including guidance on adopting benefit corporation structure and certifying as a B Corporation.

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Patagonia provides access to partners and customers, too: “If [the startup] does relate to our supply chains, we try to help them or make connections,” Graves says. “That’s where we really can add value.”

7 Socially Responsible Investments in Companies Doing Cool Things

Beyond Surface Technologies, based in Switzerland, develops treatments for textiles — including durable water repellents — made from natural raw materials.

Bureo designs and manufactures skateboards using recycled fishing nets collected on Chile’s coast. The skateboards, shown above, are sold in Patagonia retail stores.

California Safe Soil uses anaerobic digestion to turn organic waste from supermarkets into a liquid fertilizer.

CO2Nexus has developed a waterless process for cleaning textiles called TERSUS. It uses recycled liquid carbon dioxide, saving water and energy. It can be used to clean raw fabric and finished clothes, extending garments’ lives. One Patagonia supplier is testing TERSUS.

Kina’ole Capital Partners, a solar-finance company, makes funds available for rooftop solar panels in Hawaii.

NuMat Technologies has developed ways to store gases, such as oxygen and methane, more efficiently.

Yerdle distributes an app that makes it easy for people to give away things they no longer want while earning credits to buy things they need.

This article originally appeared as a part of The Patagonia Adventure: Yvon Chouinard’s Stubborn Desire to Redefine Success in our Summer 2016 print edition.

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