Entrepeneurs thinking more about society


One specific industry getting investment focuses on socially responsible businesses, anything ranging from fair trade tea to renewable energy. But this flow of money goes against the grain.

According to a new report out from the University of San Francisco, the sour state of the economy has driven the confidence of Silicon Valley venture capitalists to an all-time low.

In a world teetering on global recession investors are justifiably nervous. Starting a new business may seem near impossible in this tight credit market, but there actually is one arena where money is flowing.

Kevin Jones, an investor with Good Capital and founder of the 2008 Social Capital Markets Conference told ABC7, "I think there is a wave of new investing where people are not wanting it just to be about their money, but also to be about their impact in the world."

Jones and his partners at Good Capital, a San Francisco venture capital firm, say if you're looking for investment money during these tough economic times, the way to go is with a business venture that's socially responsible.

"There's a crush of new entrepreneurs doing a radical range of activities and sectors," said Good Capital Managing Partner Tim Freundlich.

Jones added that from healthcare to consumer products, fair trade kinds of things and financial services, there are ways to make money and do well.

To help people learn more about launching and getting investment for a socially responsible company Jones started a conference called "So-Cap" or "Social Capital Markets."

Organizers hoped for at least 250 people to show up at this first-ever October gathering in San Francisco. The turnout of around 650 people showed the hunger of a new generation of social entrepreneurs and investors.

Attendees came from around the world, all wanting to find out how to get a piece of the estimated $25 billion that's in the U.S. investment market for businesses focused on "doing good."

"The whole idea of social enterprise is becoming really big in the United States. I mean I think we're seeing that there's something between pure business and pure charity," said Jim Fruchterman, President of Benetech.

Some companies already operate this way. For 19-years the Silicon Valley non-profit Benetech has been using technology to serve humanity and the social sector by doing things like developing software for disabled students, human rights activists and environmental activists.

Another Bay Area social enterprise called Inveneo is also harnessing the power of technology for the greater good. It's already working in 15 Sub-Saharan African countries to help set up low-power and solar-power computer systems at remotely-located schools and health clinics.

"So we bring technology out so that people in organizations can access it to change people lives," said Inveneo's Co-founder Kristin Peterson.

Inveneo is one of many social enterprises excited about the possibility of cashing in on some of the existing "good" investment dollars.

Jim Fruchterman says, "The world needs more businesses to think about society."

Some investment analysts do say the best time to start a new business can be during a market downturn.

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