Q & A

We recently sat down with Jen Van der Meer to find out more about her passions, her calling and generally dive in deeper to get to know her.

2

What are some of the biggest challenges you’ve faced in your work over the last few years?

Speaking through a real estate lens: A lot of these community ownership  models ask for lower sums of money, and those are often not known to people who invest in bigger funds or developers. And a lot of those models with smaller numbers are often community-owned development projects.

So when we talk about not pursuing big numbers, what we’re really talking about is having something that's more locally-controlled with community members owning a stake, something that could translate into community wealth. These things are under the radar of most big investors, who are looking for large-scale return.

Financial evaluation is very much a pattern matching game. You have an investment thesis and you look for things that fit your thesis. In the entry-level positions in a financial firm, your job is to sort proposals, and alternative models often get sorted out because they're too small-scale or their returns are considered suboptimal. It takes a unique type of funder who wants social justice, inclusion, or better social cohesion to say, “I know these things don't fit the pattern, but here's why this looks interesting and why we should add this to our portfolio.”

3

Developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternatives want to balance profit and purpose and put a premium on sharing power and resources. Why is getting investments in this alternative model crucial for those who seek it?

We're shifting to an American economy that's going to have an industrial policy, which we haven't had in my lifetime. That's a unique opportunity. But through the lens of inclusive capital, it means there is a different kind of job to be done. You can't just expect to dole out funding and tax advantages to big developers without recognizing the local intelligence on the ground. You have to listen to the community and design towards a better more livable environment. . You have to wrestle with the infrastructure that has to be developed, understand the policy and what it's going to promote, understand stress-testing shifts, shifts in political landscapes, to see if you're covered if the electorate swings one way or the other. It's a totally different world in the last two years.

4

How do we shift the narrative about the role of capital in BIPOC communities and reframe the perceptions of the risk involved?

I think the big shift in narrative comes when you let the narratives of people who are already designing and developing for their own communities to describe the complex system they are in, what  should be done about it. You’ll get a very different answer than if you ask a foundation program officer, policymaker, or impact investor who lives in a different neighborhood and has a different lived experience every day.  

This question about narrative is key to unlocking the question about why inclusion is so critical. Narrative is not just story in finance. Narrative is the part of finance that models the future -often without just numbers. Just watch or read the stories about WeWork to see how this played out. Narrative and numbers combine to make up a valuation of a real estate investment, an energy saving tech investment, an offshore wind turbine, a rooftop solar panel project. The capital allocator class believes they they own the rights to listen to founder narratives and determine which narratives get funded. But with real estate and renewable energy, these investments are at risk of becoming worthless when the community rejects the big commercial building that will homogenize and gentrify the neighborhood, or the renewable energy investment that is delayed or shut down from local residents and activists.

If communities are included in the capital stack, the before/after narratives told at the local level will tell us if we’re doing any better than what came before. As a result, there's less loss of capital because it goes directly into the community–the dollar circulates directly within the community. The ownership stays within the community. When you're shifting from top down planning  to structure creation, to redesigning the capital stack, it has a faster and bigger impact.

5

What are the top three pieces of  advice you would give to BIPOC entrepreneurs, who are dedicated to both purpose and profit, as they are starting or scaling their business?

1. Assuming you are in and of the community, design the whole path knowing how you want ownership and power to shift. . Decide what the intent is: Is it generational wealth or is it an exit to community ownership? Know that you’ll have to negotiate this shift. The default organizational structures or financing schemes that are there laid out for you are likely not built to acheive your aims at the earliest stages of formation.

2. Plan out your early stage funding priorities to ensure you have the most amount of options later in your capital raise.

3. Figure out if you can iterate and experiment in any way that you can before it becomes big.

6

What is the call to action for investors who seek to promote social justice through investment solutions?

It really depends on the type of capital the investor has, but if an investor has the flexibility, they should really look at the activity level, not just the governance level. Environmental, Social and Corporate Governance (ESG) screens protect the materiality of the firm from risk. There's a place for that in the financial markets, but that's not actually going to get us to climate emissions reduction, and it's not going to get us to inclusion in the way that we need it fast enough. It's just simply not a powerful enough lever.

If you are someone in finance and you want to address inequality and historically excluded communities, you have to invest at the activity level and at the neighborhood and community level. That means opening up your aperture and your screen to ensure that you're looking for those things that fall out of your pattern. It means you have to look for projects that are deliberately designed to be the right size and shape for community ownership with investment time horizons that fit the community outcome, and that's going to get harder to do in a high inflationary environment. Right now, it's even more critical to pay attention to when you can actually make that investment.