Month: December 2017
Gets the heck out of Vegas. At least if it’s money from Zappos CEO Tony Hsieh’s utopian pipe-dream.
Five years ago, fresh off a $1.2B acquisition by Amazon, Hsieh immediately poured $350m of his net worth into an initiative called Downtown Project.
The goal: To turn downtown Las Vegas into “the most community-focused large city in the world” through $50m+ investments in startups, real estate, the arts, and a giant praying mantis that shoots fire from its antennae.
Too much Burning Man, not enough City Planner Man
Apart from being an undoubtedly successful startup leader, Hsieh is also an avid festival-goer. In fact, out of their total $86.6m recurring annual impact, $77.7m comes from their 3-day Life is Beautiful festival.
But, based on Downtown Project’s newly released economic impact report, the estimated $500m they’ve invested thus far has created fewer than 2k jobs.
Not exactly great news for the impact of the other 362 days.
Still, dreamers gotta dream…
And you can’t knock the vision or the dedication to the community. Heck, Hsieh even moved from a luxury apartment to a trailer park with his 2 pet alpacas to “maximize serendipity and randomness in [his] life.”
Revitalizing a city, however, takes a lot more than investing a bunch of money and hoping everyone is down with “PLUR.”
Patagonia’s VC fund (named Tin Shed Ventures after the company’s humble beginnings), is looking to invest $75m in companies that can replicate their success.
Now, they’re sticking with their roots. Not just in name, but by weighing a company’s environmental impact over short-term profit.
Yes, those really are their roots
It’s not just feel-good marketing. Patagonia’s founder, Yvon Chouinard, started selling mountain climbing gear out of a tin shack.
Then, right in the midst of a business boom, he changed his core product to be less damaging to the mountain, despite it costing him almost 70% in sales.
And, 40 years later, it’s certainly paid off — Patagonia’s currently doing $800m in annual revenue.
And since it worked before…
They’re betting it’ll work again. The VC fund is investing in companies with transparent supply chains, and tracking metrics like “toxins averted,” and CO2 reduced, not just returns.
Tin Shed estimate their investments in things like buffalo ranches and textile companies saved the planet 13k tons of CO2 just this year.
But how about those returns?
The rock hugging firm hasn’t released valuations for its investments, so there’s no way of knowing if it’s working out like they hoped.
However, the fund’s managing director says their portfolio companies have a 100% survival rate, and have seen double-digit increases in valuations.