Jacqueline Novogratz on "Patient Capital" [Video]

Jacqueline Novogratz [, founder of Acumen Fund,] is pioneering new ways of tackling poverty. In her view, traditional charity rarely delivers lasting results. Her solution, outlined here through a series of revealing personal stories, is “patient capital”: support for “bottom of the pyramid” businesses which the commercial market alone couldn’t provide. The result: sustainable jobs, goods, services — and dignity — for the world’s poorest.

What is “Patient Capital” anyway?

According to Joel Makower:

The term describes an amorphous but emerging set of business models. It is rooted in the notion that pursuing maximum growth and maximum shareholder value often dilute a company’s social and environmental mission, and that achieving financial, social, and environmental benefits can take time. At its forefront are companies like Patagonia and Newman’s Own — for-profit businesses with strong social and philanthropic missions not likely to meet The Street’s purely financial expectations. Right behind them are countless companies whose founders and investors support the values of sustainable business, clean technology, and “local living economies.” Some of these are “traditional” businesses in that their structures and financial models are much like conventional businesses. Others harness innovative new models, such as “B corps” — private companies that donate all of their profits to charity — the Newman’s Own model, since replicated by others.

Thomas Friedman’s Take (‘Patient’ Capital for an Africa That Can’t Wait from NYTimes)

Patient capital has all the discipline of venture capital — demanding a return, and therefore rigor in how it is deployed — but expecting a return that is more in the 5 to 10 percent range, rather than the 35 percent that venture capitalists look for, and with a longer payback period.