At the end of October, the New Jersey Innovation Institute (NJII) unveiled its plans to collaborate with Michele Bongiovanni, founder and CEO of HealRWorld, a social impact company located in Somerville, in accelerating businesses aimed at fulfilling the 17 Sustainable Development Goals (SDGs) set by the United Nations.
The launch of the Sustainable Business SDG Accelerator was the result of two years of hard work by all the stakeholders, said Don Sebastian, NJII president and CEO. He added that the background work was aided by Rochelle R. Hendricks, “who married our efforts together” when she was the well-respected secretary of higher education for the State of New Jersey.
In a recorded address, Gov. Phil Murphy said that he knew that the accelerator will be focused on startups that will “embed themselves in our communities and truly become a transformational presence in them,” hiring locally and investing in the neighborhood.
Bongiovanni, who has a lot of experience in the corporate world, said that she was grateful that NJII was receptive to the idea of creating a sustainability lab and accelerator. “We can all agree that New Jersey’s diverse landscape of corporations” contains a number of leaders in sustainable innovation.
Getting Investment Dollars to Innovators and Startups
“While most of my career has been in roles where I’ve innovated within large corporations, I can tell you that there has been no greater challenge than when I left D&B five years ago, on my own, to start the social impact company HealRWorld.”
Raising money was hard, and “that’s even with partnerships with Dun and Bradstreet and Dow Jones, who are here tonight,” she said, referring to corporate partners that appeared on a later panel.
“While we hear a great deal about social impact investments, I can tell you with great surety that most of those dollars are not going to the innovators and the startups, but instead to more mature organizations.”
Diverse and women-owned companies are at an even greater disadvantage, as it is well known that they receive very little of the VC money out there.
“Yet women are creating sustainability companies,” she said. Gender and diversity, per McKinsey, are clearly correlated with profitability, yet women and minorities continue to be underrepresented. Even though some of the VC megafunds out there are clearly devoted to social impact investing, they give out $30 and $40 million at a clip, and they look for later-stage companies with less risk, she said.
The need is great, she noted. “While we don’t have all the answers, the more we can collaborate to support innovation in this arena, the better off New Jersey and our world will be.”
George Nikolaou, NJII’s executive director of financial services innovation, explained that the incubator will create an ecosystem of large companies interested in sustainability, entrepreneurs, academics, investors and public agencies.
Creating a Sustainable Goals Ecosystem
“Our goal is to commercialize innovation in partnership with you,” he said, referring to members of the audience. Corporations can augment their own innovation efforts by participating in the ecosystem, and they can create a virtual R&D department by outsourcing their R&D on activities crucial for sustainability.
The best way for philanthropies to achieve their sustainable goals is to fund innovation ecosystems such as HealRWorld. “This is capability funding, not investment funding.” Accelerator members will be nurturing breakthrough ideas into fundable business plans, he added.
The accelerator’s initial focus will be on health, gender equality, clean water and sanitation, decent work and economic growth, industry innovation, infrastructure and sustainable cities.
One of the first initiatives to be housed in the new NJII accelerator will be the Disruptive Data Network – a global human trafficking data-sharing consortium that brings together major global data and news providers, NGOs, thought leaders and academics to create new risk data and products.
At the launch event, Hendricks spoke to NJTechWeekly.com about her role in getting all the pieces of this sustainable accelerator together. “I first met Michele at a New Jersey Entrepreneurial Network event. I was immediately impressed by her passion, her experience and her commitment.” What Bongiovanni was doing was “truly innovative and cutting-edge in a critical area.”
“Here is something that was woman-led; could have global impact; and was dealing around social impact, which is something dear to my heart.” Rochelle R. Hendricks
Hendricks said that she wanted to promote entrepreneurship in the state, and decided to introduce Bongiovanni to the leadership team at NJII. At that time, NJII was just getting started, and Hendricks didn’t know where the introduction would lead. But she was excited about it. “Here is something that was woman-led; could have global impact; and was dealing around social impact, which is something dear to my heart.”
Once they got together, NJII and Bongiovanni had to decide how their partnership would work. “I’ve been staying the course,” Hendricks said, noting that she is also on the NJII board.
The accelerator was first discussed at the United Nations by Joel Bloom, president of NJIT.
The Sustainable Business SDG Accelerator will also be advised by R. Paul Herman, a globally recognized expert on rating investments based on future risk, return potential and social/environmental impacts, as well as the founder and CEO of HIP Investor Ratings (San Francisco); Rev. Fr. Emmanuel Lemelson, founder and president of the Lantern Foundation (Marlborough, Mass.) and founder and chief investment officer of Lemelson Capital Management (Marlborough, Mass.); and John Pyrovolakis, entrepreneur as well as the founder and CEO of Innovation Accelerator (Omaha, Neb.).
They will focus on the creation of a new sustainable-investment fund for small and medium-sized enterprises that will leverage the deal flow generated by NJII and Human Rights Watch through the accelerator, as well as investments sourced from HealRWorld’s global database of over 1 million businesses.