Social Enterprise + Impact Investing


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Morrison & Foerster is a committed participant in the social enterprise and impact investing space – a position we have championed for more than 20 years. Our team across our corporate, finance, tax, patent, and licensing practices is passionate about solving the world’s biggest problems through creative business models and mission-focused investments. We have long recognized that impact investing and social entrepreneurship have unique legal challenges, as investors, companies, and organizations determine how to embed social and environmental missions into governing documents, investments, and business strategies.

Our practice supports:

  • Social enterprises of all sizes and from all sectors;
  • Nonprofit organizations and hybrid/tandem enterprises;
  • Investors focused on impact in addition to returns, including foundations, public charities, family offices, development finance institutions, governmental entities, and private funds, and mainstream investors considering ESG (environmental, social, and governance) factors in their investments;
  • Fund sponsors in their formation and operation of impact funds, including in collaborations with impact-focused organizations for the provision of advisory and technical support; 
  • Private companies seeking to embed ESG issues into operations; and
  • Public companies as they refine ESG strategies and navigate the business and human rights landscape.

We are widely recognized for our work in this sector. Practice group co-chair and partner Susan Mac Cormac was honored by the Financial Times in 2015 as the Most Innovative North American Lawyer for her work championing legal innovation for social enterprises and impact investors 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 MoFo again in its 2016 North America Innovative Lawyers Report as joint winner with firm client NPX Advisors for structuring the world’s first Impact Security, and we were recognized once again in 2018 for our work with The Carbon Endowment to reduce carbon dioxide emissions while supporting communities adversely affected by the clean energy transition.

Our experience includes:

  • New corporate forms, including social purpose corporations, public benefit corporations, low-profit limited liability companies (L3Cs), public benefit limited liability companies (PBLLCs), and benefit corporations;
  • Creative solutions for traditional forms, including joint ventures and nonprofit/for-profit “hybrid” or “tandem” structures;
  • Impact investments and Impact fund formation:
    • Structuring funds and investments to promote and/or preserve mission and measure impact, in addition to ensuring economic returns;
    • Structuring collaborations for the provision of impact investment advisory services;
    • 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;
  • ESG counseling:
    • Effective means to measure and benchmark performance related to impact goals and the UN Sustainable Development Goals;
    • Creation of ESG policies and guidance on corporate governance and reporting;
    • Due diligence and impact assessments related to business and human rights issues such as supply chain, worker rights, and community health and safety;
    • Disclosure requirements and new integrated reporting guidelines; and
  • Preserving social and environmental mission following a merger or acquisition.

Corporate form

Our impact team believes that the corporate form has the power to effect change. Our lawyers work with clients to blend social and environmental missions into traditional corporate forms, particularly corporations, through use of protective provisions, information rights, and shareholders agreements, and into LLCs through negotiated language ensuring mission focus and reporting. We also advise on the formation of and conversion to new legal forms, such as the Social Purpose Corporation (California), the Public Benefit Corporation (Delaware), and other forms of benefit corporations that allow companies to pursue social and environmental purposes in addition to promoting shareholder profitability.

Hybrid structures

Many impact-focused clients have relied on our team to create sophisticated “hybrid” or “tandem” structures with nonprofit and for-profit entities that are closely tied through equity ownership, funding, or contract. We have helped clients scale their missions through creative structuring, such as establishing a joint venture between a for-profit and nonprofit, structuring a fund using both for-profit and nonprofit entities, establishing a nonprofit subsidiary of a for-profit, and many other iterations.

Impact investments

We also specialize in representing “impact” investors, from those that focus on impact first but expect to generate returns in the long term to those that prioritize returns but want to ensure positive social or environmental impact and/or mitigate negative impacts. We counsel clients in structuring debt, equity, and program-related investments to incorporate mission and measure, verify, and report on ESG factors in a way that is commensurate with financial reporting. Our team also provides guidance to private equity, venture capital, and hedge fund investors who consider ESG issues in mainstream investments.

Impact fund formation

Our impact fund team represents a spectrum of investors – from family offices to foundations to private equity and hedge funds – on developing the most effective structures to aggregate and deploy capital. We advise on mechanisms for investment funds to focus on ESG factors, tailoring our recommendations based on the social and environmental missions of the firm and its investor base. We also help structure collaborations between fund sponsors and impact-focused organizations for the provision of technical and advisory experience in connection with investment decisions and portfolio oversight. 

ESG counseling

Our team helps clients identify the most material ESG issues for each company and provides complex counseling on ESG matters in the private and public sector, including fiduciary issues, corporate governance and reporting, shareholder activism, human rights and supply chain, and ESG risk analysis, due diligence, and strategy. We help design effective strategies to reduce legal exposure and reputation risk, as well as identify opportunities for differentiation.

Impact through mergers and acquisitions

As mainstream companies enter the impact space through a merger or acquisition, our team helps to protect the social and/or environmental mission following an M&A transaction. We advise on the use of a new corporate form (such as the PBC or SPC) for the subsidiary post-acquisition, composition of an impact committee at the parent company to advise on impact-related activities, tying impact to earn-out and options for management, and the metrics, measurements, and reporting of impact performance.

Social enterprise and nonprofit clients include:

  • Amp Politics
  • Beneficial State Bank
  • Ceres
  • Change.org
  • Common Sense Media
  • Digital Divide Data
  • Drip Drop Hydration
  • Etsy
  • Greyston Bakery
  • Medicines360
  • The Nature Conservancy
  • Planet Labs
  • PRX
  • Revolution Foods
  • Year Up

Impact investing clients include:

  • Brightpath Capital Partners
  • DBL Partners
  • Calvert Foundation
  • Emerson Collective
  • Goldman Sachs Asset Management
  • New Island Capital
  • Omidyar Network
  • OPIC
  • Pacific Community Ventures
  • Pontifax AgTech
  • The Rise Fund
  • The Rockefeller Foundation
  • RSF Social Finance
  • Vision Ridge Partners

Committed to furthering sustainability, MoFo also proudly serves as a lead founding firm of the Lawyers for a Sustainable Economy, a first-of-its-kind initiative to advance sustainability around the world. Through the program, we have committed to providing free legal services worth at least $2 million by 2020 to entrepreneurs and community-based nonprofits taking on key sustainability challenges.

Representative Experience

Impact M&A
  • Imprint Capital in its acquisition by Goldman Sachs
    Represented Imprint Capital Advisors in its acquisition by Goldman Sachs, marking the first instance of an impact investment firm being acquired by an institutional suitor. This significant transaction serves as a model for institutional Wall Street investors seeking to explore acquisitions to enter into impact investing instead of developing their own investment vehicles or ignoring the space.
  • Beneficial State Bank in acquisition of Pan American Bank
    Represented Beneficial State Bank in its acquisition of Pan American Bank, both Community Development Financial Institutions (CDFIs). Beneficial State Bank is a social enterprise bank founded in 2007 with a triple-bottom-line focus of social justice, environmental resilience, and economic sustainability.
  • PBS Digital sale of Kids Sprout
    Represented PBS Digital, a wholly owned subsidiary of PBS, in the sale of its ownership of PBS Kids Sprout, a children’s television channel, to NBC Universal Cable Entertainment.
  • Vision Ridge Partners’ in acquisition of controlling interest in EVgo
    Represented Vision Ridge Partners, an impact investment firm, in its acquisition of a controlling interest in EVgo, the nation’s leading public fast-charging network for electric vehicles. The investment will allow EVgo to expand its charging network and strengthens Vision Ridge’s leadership in sustainable projects that can deliver financial returns while preventing further impacts from climate change.
Impact Funds
  • Structuring impact fund for Rare
    Represented Rare, a nonprofit that manages a for-profit fund, in structuring its for-profit activities in a manner enabling it to attract top talent and mainstream capital to their mission-advancing activities, while providing a financial return to the nonprofit and protecting its tax-exempt status. Rare uses behavior change principles in inspiring and empowering communities around the world to responsibly use natural resources so people and nature thrive. Rare also partners with NGOs, governments, and the private sector to deploy private capital and public finance and achieve measurable development and conservation outcomes at scale.
  • Formation of investment arm for Common Sense Media
    Represented Common Sense Media, a San Francisco-based nonprofit, in the creation of a for-profit investment arm, Common Sense Growth LLC, and subsequent private equity investment into Common Sense Growth. This structure allows Common Sense Media to expand its impact and program services providing education and advocacy to families to promote safe technology and media for children.
  • Establishing the Catalytic Capital Consortium with The Rockefeller Foundation
    Represented The Rockefeller Foundation in establishing the Catalytic Capital Consortium, a $150 million initiative with The MacArthur Foundation and Omidyar Network dedicated to addressing financing gaps in impact investing, particularly for funds and intermediaries that are not a fit for conventional investment.
  • Formation of impact fund for The Nature Conservancy
    Represented The Nature Conservancy in forming a global water and agriculture investment vehicle, sponsored by Renewable Resources Group. The Nature Conservancy’s goal is to invest in the restructuring of water and agriculture assets in the Western United States and South America.
Impact Corporate Structures
  • Forming PBLLC for Higg Co.
    Represented Higg Co. in its formation as one of the first Delaware public benefit limited liability companies. Higg Co. is a technology company that delivers, implements, and supports the Higg Index for consumer goods industries. The Higg Index is a suite of sustainability assessment tools that enables brands, retailers, and facilities of all sizes to accurately measure and score a company or product’s environmental or social performance.
  • Structuring for-profit spinout for Year Up
    Represented Year Up, a leading nonprofit that provides technical training and job placement to at‑risk youth, in the establishment of a for-profit subsidiary, Year Up Professional Resources, or YUPRO, for outplacement services, capitalized with funding from private equity and other sources. By providing companies with motivated trained professionals, YUPRO is able to generate profit that directly contributes to the continued mission of the Year Up program.
  • Structuring The Carbon Endowment with The Nature Conservancy
    Advised on the structure and launch of The Carbon Endowment, a nonprofit and for-profit partnership with The Nature Conservancy, universities, and institutional funders. The Carbon Endowment is designed to offload 1.2 billion tons of coal reserves in a way that can alleviate the economic disadvantage posed to communities dependent on the mining industry in the United States. The program also leads environmental restoration projects, invests in renewal energy initiatives, and designs education and workforce development programs.
  • Structuring a hybrid corporate form for Medicines360
    Representing Medicines360 in several corporate matters, including structuring a hybrid corporate form and negotiating partnerships. Medicines360 is a nonprofit pharmaceutical company devoted to the medical needs of women in the developing world and is the first nonprofit pharmaceutical company to spin off a for-profit company. MoFoguided the company as it structured a $600 million licensing deal with the for-profit pharmaceutical company, Allergan. The company is selling a medical device for women’s health to combat the Zika virus and using the profits to subsidize the cost of the same device for women in developing areas.
  • Structuring hybrid form for Digital Divide Data
    Advising Digital Divide Data (DDD), a nonprofit organization that works to enable low-income people to obtain professional opportunities and earn higher incomes. DDD sought to generate income from the digital content, data, and research services it sells to paying clients to fund its training and education programs. We helped DDD create for-profit subsidiaries of the nonprofit to conduct DDD’s work in Cambodia, Laos, and Africa. We also created a similar structure that enabled the nonprofit to launch Liberty Source, a U.S. company that creates employment opportunities for spouses of military personnel stationed in Fort Monroe, Virginia.
  • Structuring hybrid form for Kepler’s
    Representing Kepler’s, a beloved but financially strapped independent bookstore in the San Francisco Bay Area, in creating an affiliated nonprofit entity, Peninsula Arts & Lectures. The nonprofit runs literary events, including authors-in-schools programs in nearby low-income schools. The creative hybrid arrangement, hailed as a national model for sustainable independent bookstores, kept the bookstore from going bankrupt and ensured that students in low-income schools benefited from vibrant literary programs.
  • Structuring reverse auction for The Nature Conservancy
    Representing The Nature Conservancy on its reverse auction to raise funds for the organization’s BirdReturns program, which incentivized rice farmers to provide habitats for migratory birds. This innovative structure created an exportable model that The Nature Conservancy is looking to replicate in other regions and for other species. The BirdReturns program is a successful example of reconciliation ecology, a burgeoning movement to increase biodiversity in human-dominated ecosystems.
  • Establishing green infrastructure development company for The Nature Conservancy
    Representing The Nature Conservancy in its creation of a green infrastructure development company, District Stormwater LLC. This effort will reduce the polluting effects of storm water on regional waterways and will generate income for the nonprofit through increased participation in Washington, D.C.’s new Stormwater Retention Credit Trading Program.
  • Assisting Omidyar Network in establishing and funding First Look Media
    Representing Omidyar Network Fund LLC, an impact investing firm, in numerous transactions, including its establishment and initial funding of First Look Media and affiliates. First Look publishes robust coverage of politics, government, business, technology, and investigative news. First Look Media is composed of several entities, including a nonprofit journalism organization and a company established to develop new media technology.
Impact Investments
  • Representing Revolution Foods in multiple venture capital financings
    Represented Revolution Foods in general corporate work, as well as in multiple venture capital funding rounds, totaling $140 million. Recently, we assisted the company in its $35 million Series I round led by Emerson Collective. Revolution Foods is disrupting the traditional student meal model, providing U.S. schools with healthy foods and nutrition education. Revolution Foods has been featured in and honored for boosting the health profile and quality of school lunches by various publications and television programs nationwide. Since its inception, the company has served over 200 million meals to students across the country.
  • Representing Virgo Investment Group in 80 Acres Farm investment
    Represented Virgo Investment Group as lead investor in the $17 million Series A financing of 80 Acres Farm, the world’s first fully automated indoor farm.
  • Representing Omidyar Network in eCurrency Mint investment
    Represented Omidyar Network in its investment in eCurrency Mint, a fintech startup that enables central banks to issue digital fiat currency.
  • Representing The March Fund in Engage3 investment
    Represented The March Fund in the $12 million Series C financing of Engage3, an AI-powered data analytics company.
  • Representing Omidyar Network in Andela investment
    Represented Omidyar Network in the $24 million Series B financing of Andela, a social enterprise that blends outsourcing and in-house hiring by training and integrating remote software developers in Africa to Fortune 500 companies around the world.
  • Representing Emerson Collective in Angaza investment
    Represented Emerson Collective as lead investor in the $10.5 million Series B investment in Angaza, a cleantech startup providing sustainable energy devices to over 30 developing countries. Angaza offers a pay-as-you-go platform for solar power, allowing families to purchase clean, reliable electricity in small, affordable increments.
  • Structuring investments for The Rockefeller Foundation Zero Gap program
    Represented The Rockefeller Foundation in the structuring of the Zero Gap commingled fund and securities to combat climate change. The Zero Gap portfolio aims to create the next generation of innovative finance vehicles capable of mobilizing capital from the private sector to fund the UN Sustainable Development Goals.
  • Representing DBL Partners in Off-Grid Electric investment
    Representing DBL Partners as lead investor in the $25 million Series C financing of Off-Grid Electric, a micro-solar leasing platform.
Imprint Capital in its acquisition by Goldman Sachs
Representing Imprint Capital Advisors in its acquisition by Goldman Sachs, marking the first instance of an impact investment firm being acquired by an institutional suitor. This significant transaction serves as a model for institutional “Wall Street” investors to explore acquisitions to enter into impact investing instead of developing their own investment vehicles or ignoring the space.
Structuring reverse auction for The Nature Conservancy
Representing The Nature Conservancy on the reverse auction to raise funds for the organization’s BirdReturns program, which incentivized rice farmers to provide habitats for migratory birds. This innovative structure created an exportable model that The Nature Conservancy is looking to replicate in other regions and for other species. The BirdReturns program is a successful example of reconciliation ecology, a burgeoning movement to increase biodiversity in human-dominated ecosystems.
Establishing green infrastructure development company for The Nature Conservancy
Representing The Nature Conservancy in its creation of a green infrastructure development company, District Stormwater LLC. This effort will reduce the polluting effects of storm water on regional waterways and will generate income for the non-profit through increased participation in Washington D.C.’s new Stormwater Retention Credit Trading Program.
Assisting Omidyar Network in establishing and funding First Look Media
Representing Omidyar Network Fund LLC, an impact investing firm, in numerous transactions, including its establishment and initial funding of First Look Media and affiliates. First Look publishes robust coverage of politics, government, business, technology, and investigative news. First Look Media is comprised on several entities, including a non-profit journalism organization and a company established to develop new media technology.
Representing Vision Ridge Partners in EVgo investment
Representing Vision Ridge Partners, an impact investment firm, in its major investment in EVgo, the nation’s leading public fast-charging network for electric vehicles. The investment will allow EVgo to expand its charging network and strengthens Vision Ridge’s leadership in sustainable projects that can deliver financial returns while preventing further impacts from climate change.
Representing Capricorn Investment Group in True Green Capital investment
Representing Capricorn Investment Group, an impact investing firm, with respect to its investments in True Green Capital, funding the development of over 20 renewable energy projects comprising over 100 megawatts  
Representing Brightpath Capital Partners in Sungevity investment
Representing Brightpath Capital Partners, an impact investing firm, as lead investor in Sungevity, a leading company in the global residential solar market. The investment allowed Sungevity to expand into new U.S. states and promote its mission of building the world’s most energized network of customers who power their lives with sunshine.
Representing DBL Partners in Off-Grid Electric investment
Representing DBL Partners, an impact investing firm, as lead investor in Off-Grid Electric’s $25 million Series C investment round. Off-Grid Electric is a micro-solar leasing platform and its latest financing will allow the social enterprise to enter its second African Market, Rwanda, as well as scale its partnership with the Tanzanian government to power one million homes by 2017.
Representing Revolution Foods in multiple venture capital financing
Representing Revolution Foods in general corporate work as well as multiple venture capital funding rounds, totaling $140 million. Recently, we assisted the company in its $35 million Series I round led by Emerson Collective. Revolution Foods is disrupting the traditional student meal model, providing U.S. schools with healthy foods and nutrition education. Revolution Foods has been featured and honored for boosting the health profile and quality of school lunches in various publications and television programs nationwide. Since its inception, the company has served over 200 million meals to students across the country.
Structuring a hybrid corporate form for Medicines360
Representing Medicines360 in several corporate matters, including structuring a hybrid corporate form and negotiating partnerships. Medicines360 is a non-profit pharmaceutical company devoted to the medical needs of women in the developing world and is the first non-profit pharmaceutical company to spin off a for-profit company. The firm guided the company as it structured a $600 million licensing deal with the for-profit pharmaceutical company, Allergan. The company is selling a medical device for women’s health to combat the Zika virus and using the profits to subsidize the cost of the same device for women in developing areas.
Structuring hybrid form for Digital Divide Data
Advising Digital Divide Data (DDD), a non-profit organization that works to enable low-income people to obtain professional opportunities and earn higher incomes. DDD sought to generate income from the digital content, data, and research services it sells to paying clients to fund its training and education programs. We helped DDD create for-profit subsidiaries of the non-profit to conduct DDD’s work in Cambodia, Laos, and Africa. Most recently, we created a similar structure that enabled the non-profit to launch Liberty Source, a U.S. company that creates employment opportunities for spouses of military personnel stationed in Fort Monroe, Virginia.
Structuring hybrid form for Kepler’s
Representing Kepler’s, a beloved but financially strapped independent bookstore in the San Francisco Bay Area, create an affiliated non-profit entity, Peninsula Arts & Lectures. The non-profit runs literary events, including authors-in-schools programs in nearby low-income schools. The creative hybrid arrangement, hailed as a national model for sustainable independent bookstores, kept the bookstore from going bankrupt and ensured that students in low-income schools benefitted from vibrant literary programs.

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