From Dot-Com Bust To Impact Investing Boon

Forbes 2 months ago

For Jim Sorenson, what started as a devastating setback became a vehicle for changing lives. The Utah entrepreneur has been at the forefront of innovative philanthropy for over a decade, funding microfinance as it emerged, investing in Pay for Success projects, and advocating for impact investing — allocating capital to companies producing a measurable social benefit. It all started with his company’s near failure during the dot-com crash. “Sometimes insurmountable obstacles can lead to great opportunities,” he says, “and that’s what happened with Sorenson Communications.”

Sorenson was already an experienced entrepreneur when he launched Sorenson Communications. He’d acquired Utah Biomedical Test Labs early in his career and spun out a promising division into an independent venture. The resulting company, DataChem Laboratories, became a national leader in environmental testing. So during the internet boom of the late ’90s, Sorenson turned an entrepreneurial eye towards the new industry of video conferencing technology. 

All seemed to be going well for Sorenson Communications as it prepared for an IPO. And then, Sorenson recalls, “It was the next day — the very next day — the dot-com bubble burst.” Suddenly, Sorenson Communications was losing nearly $1 million every month. Sorenson considered folding the venture entirely.

Soon after, Sorenson’s Deaf brother-in-law Jon Hodson approached him with a proposal for taking the company’s videoconferencing technology in a new direction: a product that would enable Deaf and hard of hearing users to communicate through a remote sign language interpreter over the internet. Sorenson agreed and the company quickly reoriented, investing in technology that created a better experience for Deaf and hard of hearing users, providing them with video phones free of charge, and becoming the second-largest employer of the Deaf community in the country. Looking back, Sorenson sees this experience not only as a comeback, but as a remarkable turning point in his life.

What made Sorenson Communications so revolutionary was the way it provided a social benefit while also turning a profit. Although Sorenson says he didn’t fully comprehend his company’s social impact at first, he was soon touched by the way the technology improved lives. “Seeing the impact and hearing the stories of how the technology has changed the way that this community is able to live and to communicate,” reflects Sorenson, “it was really a profound moment for me.”

In only three years, Sorenson Communications went from losing money to annual revenues of $120 million and roughly 75% market share. It was then acquired in one of the most lucrative private equity deals of the time. “That really led me to believe there were other sectors, and there really was something to this,” Sorenson says, “doing good while doing well.” 

Sorenson is bullish on solving some of the world’s most intractable issues. “I am optimistic that with this new approach, through impact investing, that we can address these problems.”

After his experience with Sorenson Communications, Sorenson became active in impact investing. He launched the Sorenson Impact Foundation to invest in innovative companies that meet the needs of underserved populations as part of their business model. For example, the Foundation invested in Liberty & Justice, a Liberian enterprise which employs women and donates one school uniform for each sale to a Liberian child in need. Lack of access to school uniforms often prevents children in the country from attending school, and Liberty & Justice funds their donations by selling a line of clothing at Nordstrom.

Sorenson has reason to be optimistic about impact investing. Growing interest has fueled rapid growth in the sector, which registers positive social returns for communities and market rate returns on the majority (66%) of investments. Global Impact Investing Network (GIIN), a nonprofit dedicated to augmenting the “the scale and effectiveness of impact investing,” reports that more than 1,340 organizations across the world currently manage $502 billion in impact investing assets, compared to $228 billion in 2018 and $114 billion in 2017.  The organizations involved include financial institutions, private foundations, family offices, and NGOs, and their investments in social enterprises have already improved millions of lives

Sorenson plans to continue his efforts to promote the industry. He says, “frankly, I’d like to leave the world a better place, but to do it in such a way that after I’m gone, it’s like the ripple in a pond that continues to touch and hopefully move future generations.”

Source link
Read also:
CNN › 1 week ago
There's never been a better time to let Alexa into your life-- right now the 3rd Gen Echo Dot and Echo Dot with Clock are discounted to their lowest prices ever. You can score the Echo Dot for just $22 (originally $49.99) and the Echo Dot with Clock...
Business Insider › Lifestyle › 2 months ago
If a red dot appears on your Apple Watch, it means that you have unread notifications. It's easy to check the notifications on your Apple Watch in just a few steps, and remove the red dot so you're up to date. You can also turn off the red dot for...
The Daily Beast › 1 week ago
The Echo Dot is the perfect way to introduce a smart speaker into your home without much effort. Right now, both the new Echo Dot and the Echo Dot with the new LED clock have never been cheaper. Grab the third generation of Echo Dot for just $22 or...
Forbes › 2 months ago
Sorenson Communications found financial and social returns by focusing on the Deaf and hard of hearing in the face of seemingly insurmountable obstacles.
CNN › 1 month ago
First things first. If you're thinking, "Hmm, this new Echo Dot looks just like the old Echo Dot... with a digital clock on the front," well you're correct. From a design and internal hardware standpoint, they are nearly identical. The new Echo Dot...
CNN › 2 months ago
Rather than redesigning a whole new Echo Dot, Amazon is introducing the Echo Dot with Clock. For $59.99, the Echo Dot gets an LED clock built into the side and keeps two colors options. And yes, you can pre-order it today.
Business Insider › Finance › 1 month ago
Stock prices have run well ahead of underlying corporate profits, exposing them to a sharp sell-off similar to the dot-com bust, according to Societe Generale's Albert Edwards. While it's not entirely unusual for investors to pay a premium for elusive...
Business Insider › Finance › 1 month ago
Robert Shiller's "Irrational Exuberance" is a seminal book that forewarned investors about the dot-com bust and housing crisis. In an exclusive interview with Business Insider, Shiller highlighted a more recent book that addresses lingering...
Forbes › 1 month ago
Impact investors are betting on the imperative of unleashing the economic potential of refugees, and are pioneering a movement of refugee lens investing.
CNBC › 1 month ago
Some 85% of individual investors, and 95% of millennials, are interested in impact investing, and 52% are engaged in "at least one sustainable investing activity."
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google