Pymwymic: Pioneering the Change in Venture Capital
Pymwymic is a venture capitalist firm and cooperative (co-owned) movement of European Wealth owners looking to pioneer an industry-wide conversion to impact investing. They are striving to open people’s eyes to the positive impact that investment can have on the world not just on capital.
Granted B-Corp status in 2013, the first company in the Netherlands to achieve such a feat, they are no stranger to being the frontrunners. I spoke to the managing director, Rogier Pieterse, about what inspired such a forward-thinking company and what continues to drive the company today.
What is the philosophy that drives Pymwymic?
Rogier Pieterse: Pymwymic comes from a put your money where your meaning is community. It is the oldest impact investor in Europe, starting in 1994 with a group of pioneers who thought that investing at the time just for capital return was no longer appropriate. They, therefore, made a groundbreaking decision to start investing with a philosophy of the 3 P’s, People, Planet, Profit. Pymwymic, started to look at how can you put your capital to work whilst also preserving and conserving both human life on earth and the earth in general.
What structure do you have in place at Pymwymic to ensure this philosophy remains the focus?
R.P.: Pymwymic has always been positioned and will continue to be positioned as a pioneer. Our current theory of change at Pymwymic is focussed on three main pillars. The first pillar is creating proof points because there is a lot of skepticism surrounding impact investing at the moment, many people do not believe it is possible to create positive impact whilst also having positive financial results.
The second pillar is setting new norms, this is focussing more on our pioneering drive to be a company enabling change. An important element for us in relation to this is that we act like an open book and everything new that we do and learn we try to share with the broader public and the broader industry, all the time challenging the current standards that are deemed normal. The best example of this is the Impact Methodology that we have developed over the years and share yearly through our Impact Reports.
The third pillar is what we call influencing the industry in order to offer actionable earnings, so as well as everything we are doing to change norms we want to make sure we are also catalyzing other people into joining the movement. This goes back to the foundation of Pymwymic, as an awareness platform, not just an investment fund. Therefore, from the first investment round, more people started to get excited by the premise, and this attracted private investors. A lot of these investors were wealthy families who were looking to invest their money in something that would have a positive long-term, multi-generational, outcome.
At Pymwymic you employ a Cooperative structure. Walk me through how you landed on this idea and how it works.
R.P.: As the market for Impact Investing has developed further, we at Pymwymic want to maintain our pioneer status in order to keep driving the sector forward. In 2016 we decided that the best way to do this was to use our awareness platform to convert our structure into what is called a cooperative, which is essentially an entity owned by the shareholders in a reciprocal fashion where our 150+ members and investors all give and take. We set up this cooperative in order to give a leading voice to our members, and with this cooperative, we catalyzed the capital in the cooperative as an entity and set up specific sub-funds for the money to be invested in.
Before this change, we had impact entrepreneurs who would come in and present, and then one or two families would pitch in and invest. This meant that our investments all remained quite small and it also did not catalyze the creation of other capital. So now what we have done with our specific sub-funds is that we are now able to institutionalize capital and the cooperative acts as the cornerstone for this. Then institutional investors will invest and adopt our impact methodology, which is a great example of how Pymwymic is moving the capital from other areas to the Impact segment. The new structure simply allows us to be more successful at this as we are able to invest more money upfront, allowing us to better attract other investors.
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What is your investment strategy at Pymwymic and how does this help your portfolio companies stay focussed on Impact?
R.P.: Since 1994 we have invested over €60million in a wide variety of sustainable industries. However, with the introduction of this new cooperative in 2016, we are investing larger amounts each time in more focussed sub-sectors.
Initially, we were focussing on Healthy Ecosystems, specifically innovative and disruptive business. But since the Covid-19 pandemic, we have come to appreciate how essential our food industries are, so right now our prime focus is food systems and promoting a transition to more sustainable practices in the food sector.
What makes us different is that we really act as Impact Guardians, so entrepreneurs come to us and although we are not as large as other funds, we offer a much higher level of impact governance. We do this, amongst others, by developing a theory of change and setting Key Performance Indicators (KPI’s) that help keep companies on track from an impact perspective. This is something that large financial situations are not as interested in. We, therefore, do bring a different “tone of voice” for the entrepreneurs.
This support system is important as often the first service to go when companies become more “owned” by various shareholders, is impact. Companies scale up in the pursuit of higher returns, resulting frequently in losing the true essence of their impact. The business then experiences mission drift and Profit becomes more important than People and Planet. The business then experiences mission drift and Profit becomes more important than People and Planet.
This is where at Pymwymic we look to steer businesses back on course, we have a traditional venture capital approach to our investment but with an Impact focussed twist. When companies come to us for funding the first questions we ask are based around Impact: Is Impact at the core of the business? Is the company a B-Corp?, If the management at the business are not already impact focus, are they willing to make this a key objective? Is management gender diverse? We are asking the key questions, and this means that we are often able to tell within the first ten minutes whether a company is appropriate for our portfolio. More importantly, whether the result of our investment is going to have a positive long-term impact on the world.
In the cover picture: Pymwymic Team Photo Credit: Pymwymic
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