Impact Investing in Camels, Not Unicorns with Edward Dugger III
Venture investor Edward Dugger III’s extraordinary success investing in diverse and inclusive companies has been based on a very different approach than the unicorn model widely adopted by Silicon Valley venture capitalists. Informed by a learned historical understanding of cultural change and his own critique of socio-economic transformation — which, in a recent post, he calls The Third Reconstruction — Dugger has focused on building “camel caravan portfolios.” “Contrary to unicorns, camels prioritize profitability over growth so they can effectively survive and thrive in harsh environments with limited resources. Low failure rates coupled with low cash burn and profitable growth translate into high performing investment returns.”
The results of his approach to camel investing speak for themselves. While only six to ten percent of unicorns become successful investments, Dugger’s camel caravans have historically had a sixty percent success rate, with a 30% IRR. In this program, Impact Entrepreneur’s Laurie Lane-Zucker welcomes Reinventure Capital’s Edward Dugger III for an expansive journey through the history of social justice investing and into the present, where we will discuss his investment philosophy and spotlight some of his favorite impact “camel” enterprises.
Edward Dugger III
Edward Dugger III’s VC career began at age 25 and accelerated at age 27 when he became CEO of one of the larger venture capital firms in the nation, backed and mentored by such board directors as the CEO of Morgan Stanley and the Chairman of the Executive Committee of JP Morgan. As head of one of the earliest impact VC funds, he invested in growth industries to consciously expand business opportunities for entrepreneurs of color, achieving an IRR of 32% during its last decade. In addition to generating a top quartile return, Ed also helped launch some of the nation’s most successful African American controlled companies, both private and public, and assisted them in attracting over $2 billion in conventional capital, while achieving 30% diversity among managers and employees and generating over 7,000 family supporting jobs.
Most recently, Ed has responded to our nation’s current challenges, stemming from persistent racial, social and economic inequities, by forming Reinventure Capital. Once again, he is targeting the vast, untapped reservoir of innovative, entrepreneurial talent, comprised of those of color and women consistently overlooked by the mainstream investment community. In so doing, Ed is implementing a proven contrarian investment playbook, as before, ensuring an impact rich return on capital AND inclusion.
Laurie Lane-Zucker is Founder and CEO of Impact Entrepreneur, LLC, an impact economy business that hosts the Impact Entrepreneur Network — a large, global network of “systems-minded” entrepreneurs, investors and scholars of social and environmental innovation — and publishes Impact Entrepreneur Magazine. For over 30 years, Laurie has been a “pioneer” (Forbes) and recognized leader in sustainability, social enterprise, and impact investing. Laurie was the founding Executive Director of the international environmental organization, Orion Society, which publishes the celebrated Orion Magazine, as well as the founder of a global sustainability think-tank, the Triad Institute, and Hotfrog, a Founding B Corporation, GIIRS Pioneer Company, and the first company ever to complete an equity transaction on an impact investment exchange. Laurie is the bestselling and multiple award-winning publisher and editor of books and magazines on sustainability and social impact, and the author of numerous articles on entrepreneurship and impact investing.