Social Enterprise + Impact Investing

For more than 20 years, Morrison & Foerster has shown commitment to the social enterprise and impact investing space. Practice group chair and partner Susan Mac Cormac was honored in 2015 by the Financial Times as the Most Innovative North American Lawyer for her work championing innovation in social enterprises and impact investing and was named by California Lawyer as Attorney of the Year in 2012 (for creating a new corporate form, now the Social Purpose Corporation) and in 2016 (for impact investing and sale of Imprint Capital to Goldman Sachs). The Financial Times recognized the firm again in its 2016 North America Innovative Lawyers Report as joint winners with firm client NPX Advisors for structuring the world’s first Impact Security. Along with Ms. Mac Cormac, the firm has a team of attorneys in the corporate, finance, tax, patent, and licensing groups who are passionate about solving the world’s biggest problems through innovative businesses and mission-focused investments.

We offer a cutting edge legal practice that supports:

• Innovative social enterprises;
• The full range of investors that seek impact in addition to returns;
• Non-profit organizations and “hybrid” or “tandem” enterprises; and
• Mainstream companies seeking to incorporate impact into current operations.

Our attorneys work with clients to blend impact into traditional corporate forms, particularly corporations, through use of protective provisions, information rights, and shareholders agreements, and LLCs, through negotiated language ensuring mission focus and reporting. With respect to new corporate forms, Susan Mac Cormac co-authored the legislation in California that created what is now called the Social Purpose Corporation (SPC). The SPC and the Public Benefit Corporation (Delaware), together with other forms of benefit corporation, represent a new for-profit business form allowing companies to pursue social and environmental purposes in addition to promoting shareholder profitability.

We also specialize in representing “impact” investors, both those that focus on impact first but expect to generate returns in the long term and those that prioritize return but want to ensure positive social or environmental impact and/or mitigate negative impacts.

Further, we have deep experience and expertise in providing advice to boards and committees on fiduciary issues, conflicts of interest, and other corporate matters related to environmental, social, and governance (ESG) issues.

A representative list of some of our impact investing/social enterprise expertise includes:

• New corporate forms, including social purpose corporations, public benefit corporations, low-profit limited liability companies (L3Cs), and benefit corporations;
• Creative solutions for traditional forms, including joint ventures and non-profit/for-profit “hybrid” or “tandem” structures;
• Structuring funds and investments to promote and/or preserve mission and measure impact, in addition to ensuring economic returns;
• Creation of ESG policies and guidance on corporate governance and reporting;
• Vehicles for tax-exempt entities to make debt or equity investments in for-profit social enterprises;
• New forms of securities, such as green bonds, social impact bonds, and impact securities;
• Structuring traditional debt, equity, and program-related investments to incorporate mission;
• Effective means to measure and benchmark performance related to impact goals; and
• Disclosure requirements and new integrated reporting guidelines.

Selected social enterprise and impact investing clients include Revolution Foods, Medicines360, Planet Labs, The Nature Conservancy, PRX, DBL Partners, Goldman Sachs, Calvert Foundation, Pacific Community Ventures, Brightpath Capital Partners, RSF Social Finance, OPIC, Capricorn Investment Group, Omidyar Network, and New Island Capital.