FARM: An Impact Investing Collaborative

Overview:

Tom Bird, founder of the early-stage impact investment nonprofit The FARM Fund, settled into his seat for a flight from Boston to Amsterdam in February 2016. The seven-hour transoceanic flight would give him plenty of time to mull over two dilemmas – one a long-term question of the future of FARM and the other an investment opportunity FARM had recently been presented.

Bird and some like-minded associates had founded FARM in 2011 to invest in for-profit enterprises that were looking to make a positive social contribution with their work, an area called impact investing. Overall, the portfolio the fund assembled was strong: financially, the fund had outperformed traditional venture capital benchmarks, and its companies were generating meaningful social impact across the globe in the areas of health, education, energy, and poverty reduction. Bird was considering the next chapter for FARM. He managed the fund’s growing portfolio without dedicated full-time staff. Bird felt stretched thin and was considering other options in his life.

Over the preceding year, Bird had put together a number of ideas about how the fund might proceed. The flight would provide much needed time to ponder the options. Bird also had more a pressing decision to consider. He had to decide whether FARM would invest in OnFrontiers, a company that was approaching its fundraising deadline.

Founded in 2014 by Anne Kroijer, OnFrontiers provided its clients with access to a broad network of experts in emerging markets to serve as ad-hoc, short-term consultants. Despite the company’s strong traction to date, Bird had doubts about the investment. From a financial standpoint, the outlook appeared to be attractive – OnFrontiers offered a unique service and had put together a robust customer pipeline. However, FARM’s mission had been to invest in companies that would help serve the nearly 4 billion people living on less than four dollars per day and OnFrontier’s customers primarily consisted of well-heeled western companies.

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Teaching Note:
No
Suggested Citation:

Patrick Sissman and AJ Wasserstein, "FARM: An Impact Investing Collaborative," Yale SOM Case 18-022, December 28, 2018

Keywords:
  • Impact Investing
  • Leadership Succession
  • ESG
  • Socially Responsible Investing
  • Venture Capital
  • Emerging Markets
  • Donor Advised Funds
  • Deal Sourcing
Perspectives:
  • Asset Management
  • Entrepreneurship
  • Investor/Finance
  • Leadership & Teamwork
  • Social Enterprise
  • Sustainability

Acknowledgement

This Yale School of Management case has been made possible in part by the generous support of The Kenneth H. Colburn ’78 Curriculum Development Fund.