Introduction

Hi there! This is Romy and welcome back to another episode of the Bonfires of Social Enterprise. Today, we are moving to the Impact Investing Inglenook to talk to Don Lee. Don has been quite a visionary around social enterprise local investing and has begun to change the way many people are investing in the Detroit area. His has passionate rationale and incredible enthusiasm – It is quite contagious actually. We have a very special surprise artist at the end of this episode for your listening pleasure so stay tuned! Before we jump in, let’s see what Luke has for our Fun Fuel…

Fun Fuel

Hi, this is Luke Trombley, and I am bringing you the fun fuel for this episode.

Don Lee makes a huge impact on businesses with his investing, much like how meteors make huge impacts on earth itself. The world's largest crater is located in Australia, before impact, it split into two pieces, each 6 miles across. This created two craters covering around 250 miles of Australia's beautiful countryside.

The second biggest crater is located in South Africa. The meteor was between 5 and 10 kilometers and was traveling around 20 kilometers per second. That is around 12 miles a second!

Thank you for tuning into this fun fuel. Enjoy the episode!

Transition

Thanks, Luke! I love this idea of thinking about Impact Investing making large scale impact. That just gave me a different visual. In some ways, impact investing has turned the financial markets a little sideways when it comes to local investing. Many said it couldn’t be done, but, as you will hear from Don, it is happening right now! Let me not delay one more minute and let’s jump over to my conversation with Don…

Main Interview

Don: Romy, thanks for having me. Man, it's been ... it's just been so cool what's been happening the last couple of years when we connected and what we're doing with, in the city of Detroit. It's just amazing, creating over 44 jobs in three entities, that we invested in with your leadership and help. It's been great so thanks for having me.

Romy: Gosh, I feel like, I'm just an administrator here, you've been part of the visionary and I think it's been, I'm glad you said only a couple of years because I think it's been closer to four years that we've been doing this. But that's good, time flies.

Don: Scary.

Romy: I know. Hey, you know what? This has been awesome to have you on here because I've been wanting to have you one here, we get so many questions around impact investing and you are a walking example of somebody who kind of caught the bug a little bit, had the idea, and you've journeyed from actually putting your money into it, both direct and private equity funds that you help design and now help oversee. You, sort of, we'd say, officially caught the bug for impact investing so I'd love to just start at the beginning and take the listeners back to how did you even become interested in kind of local impact type investing. Do you remember?

Don: Yeah, well if you go really far back, I came to the state of Michigan or the great city of Detroit with minus $5,000 in my pocket. So I would be ... I wouldn't consider myself wealthy and my net worth wasn't above zero so ... But what I do, and when I reflect back and I start reflecting back after mission trips that there were so many wonderful men and women that came into my life that really helped me grow as a human being with their time, treasure, and talent that I have been able and put in a position to be able to give back. I, Romy, as you know, I do a lot of mission trips around the world and I would go there with the whole attitude I'm looking to help those folks, which I hope I did, but I always come back changed saying, "Wow, I feel better about myself now than I did when I left and what's changed."

How I got the bug was, I have been a C Level executive for the last 23 years from CEO, CMO, to COO and I wanted to use my gifts and as I read a book called, "Job Wars" by Jim Clifton of Gallop that just turned me on and I said, "You know what? We got to create jobs if we really want to turn our country around, not saying it's bad, but if we really want to mobilize people we need to give them hope." I think with jobs gives a whole thing of confidence and purpose and that's when my journey started. Then I met you and met my partner in crime Jeff [inaudible 00:03:29 ], not in crime literally, but we came together and developed this fund which just knowing what we've done in the past. Not taking anybody else's model and putting it together to mobilize dollars, mobilize people to impact under resourced communities.

That's where the bug started. I feel pretty good about myself for helping another individual or another human being no matter who they are.

Romy: And then how did you get the idea Don to invite others to the table saying, "Hey, let's get a bunch of our social circle together and try to do this together." How did you get locked on to that? Was that also from kind of mission work, team work?

Don: Right, and I look around ... we have a really ... I go to a really cool church so I've got a really cool community of people that I hang out and I'm like, "How do I mobilize these folks? What can I do to get these guys and gals involved?" The one thing I always know, you got to put your money where your mouth is and there had to be some type of commitment dollar wise to get people's commitment in time wise.

So just through talking with people, understanding ... Just saying, "How would you like to mobilize your time, treasure, and talent as a C level executive or a director of manufacturing and marketing? We could use you. Would you want to invest in other human beings, just like other human beings invested in you in your career. I want to give you that same opportunity." And that's how impact investing started.

A lot of people do the talk but until you write a check, that's a whole different ... that gain goes up 1,000 percent. So that's where we got money involved.

Romy: Yeah, that's so true. You put some money down on the deal and that changes the game. You guys were really successful, I think in that first one we got 40 investors. Was that surprising to you? Or was that a smaller number than you were trying to get?

Don: Well, of course we wanted way more, we set big goals, however, we were surprised by how many people didn't really understand social enterprises three years ago, four year ago and today it started with everyone asking me about it now. Also, you have to understand there's early adopters and people who were early adopters really weren't so that was disappointing but now they're starting to come around.

What turned around for people listening to the story, and Romy you're a big part of this, we put an unbelievable platform of accountability and transparency. We also built the why, how, and what for what the fund is going to be. The why, was just a simple to engage and empower leaders, who I was talking to, to lead social change and provide economic hope. That was our why. Now I didn't say what we're going to invest in or what we're going to do, we just wanted something bigger than ourselves. I think that was the impetus of people saying, "I'm in, I'm in, I'm in". And we raised closed to, I think, around a million dollars and then we, through your team we syndicated other foundations and now we've had another round to raise more equity and did more stake into our enterprises.

So I think it's the accountability, transparency, and the heart that we showed that really attracted our first 48 investors.

Romy: And now that I ... thanks for bringing all that up. This accountability thing became far more important, I think, than any of us envisioned, I think, because we all came out of careers that required accountability that maybe brought some of that personality to it. But I can tell ... I can tell you myself, I really didn't have a feel for how much non accountability there was in the market place of impact investing. Can we press into that a little bit more? What has that done for your personally in terms of either reporting or how has that affected you in terms of a comfort as an individual investor?

Don: Makes me sleep at night. What we promised in those meetings, raising funds, is all come true. So we basically said, "You're going to have a document to sign, you're going to be able to see our books online, you're going to see assessments on a regular basis of our identities we are investing in. We build a board, we build an investment board." Because I'm like, "Who would give me money?" I'm asking ... I'm competing against a lot of other companies, foundations, and great causes for money and so I really felt in being an engineer ... I just wanted to make sure that people knew we had a governance around our dream that would give people the freedom to invest. That has really paid off for the enterprises we're investing in b