A New Model for Angel Investing

Kim Scheinberg's new venture fund plans to institutionalize the idea of paying it forward. At its heart this new idea was thought up by a kale...

Kim Scheinberg's new venture fund plans to institutionalize the idea of paying it forward.
At its heart this new idea was thought up by a kale pusher. When you walk into her loft you are greeted by a slight and energetic women wearing a shirt that reads "EAT MORE KALE." After a few minutes of sitting down, adamantly reassuring her that you are both full and fine, you find yourself both enjoying and preaching the merits of Kale chips.

This women is named Kim Scheinberg, and she is a writer and an angel investor. Today she announced a new way of investing that could provide a new model for angel investment that melds the philanthropic with the excitement of the start up-all while creating an ongoing wave of new enterprises that do good for the world.

Normally this is how it works:

You have an idea, find an angel to invest in you, decide how much your idea is worth, give them a piece of it, get the money, build the company, sell the company (hopefully), and then the standard outcome is that the angel gets rich based on whatever percentage you agreed on at the beginning, which is fine and as far as it goes.

Kim has a different idea for her fund, called Presumed Abundance, and it works like this:

It begins the same as with other angel investments: you have an idea, find her fund, pitch your idea, pick a value, give a percentage, and get cash. But that is where the similarities end. With Presumed Abundance, if you sell the company, the percentage you gave up is no longer just owned by the angel but by both of you. The only stipulation is that you reinvest it in another exciting business that does good for the world.

This means that if your business is successful and you sell your company, then the very next day you yourself become an angel investor. Together, in partnership, you get to decide what the next great company is going to be and together you help another young entrepreneur get their grounding and get going. It's a variation on a trend that's been building for some time, sometimes called venture philanthropy or social venturing. This opportunity has emerged out of the blending of high-tech venture capital, social entrepreneurship, and traditional philanthropy.

This idea, which was privately launched last week at the StartingBloc New York Institute, and today is being announced to the public, is in the final stages of closing its first investment of $25,000 to a group called Open Action.

"We just struggled as an organization to valuate our company. We began as allies working together, and then by putting percentages on things our conversations turned into a negotiation," says Mike Wenger, one of the two founders of Open Action. "We were just two young social entrepreneurs, and what Kim eventually proposed to us was such a powerful idea that it immediately stuck."

The fund is initially capitalized at $250,000 and is set to fund 10 to 20 new businesses with investments between $5,000 and $25,000 over the next two years. If even one of the groups reaches liquidity it should enable another ten to start setting off a wave of new enterprises that will change this world.

The "Presumed Abundance" clause, with its simple "fund it forward" language should be a fundamental part of every new investment in social enterprise. It changes the nature of the relationship between investors and entrepreneurs. It honors trust and collaboration, and most importantly, it has the potential to mobilize entrepreneurs to change the world we are building from one of scarcity to one of abundance.

Dev Aujla is the founder of DreamNow. Photo by Flickr user kevindooley.

Ottawa Humane Society / Flickr

The Trump Administration won't be remembered for being kind to animals.

In 2018, it launched a new effort to reinstate cruel hunting practices in Alaska that had been outlawed under Obama. Hunters will be able to shoot hibernating bear cubs, murder wolf and coyote cubs while in their dens, and use dogs to hunt black bears.

Efforts to end animal cruelty by the USDA have been curtailed as well. In 2016, under the Obama Administration, the USDA issued 4,944 animal welfare citations, in two years the numbers dropped to just 1,716.

Keep Reading Show less
via I love butter / Flickr

We often dismiss our dreams as nonsensical dispatches from the mind while we're deep asleep. But recent research proves that our dreams can definitely affect our waking lives.

People often dream about their significant others and studies show it actually affects how we behave towads them the next day.

"A lot of people don't pay attention to their dreams and are unaware of the impact they have on their state of mind," said Dylan Selterman, psychology lecturer at the University of Maryland, says according to The Huffington Post. "Now we have evidence that there is this association."

Keep Reading Show less
via Real Time with Bill Maher / YouTube and The Late Late Show with James Corden / YouTube

A controversial editorial on America's obesity epidemic and healthcare by comedian Bill Maher on his HBO show "Real Time" inspired a thoughtful, and funny, response by James Cordon. It also made for a great debate about healthcare that Americans are avoiding.

At the end of the September 6th episode of "Real Time, " Maher turned to the camera for his usual editorial and discussed how obesity is a huge part of the healthcare debate that no one is having.

"At Next Thursday's debate, one of the candidates has to say, 'The problem with our healthcare system is Americans eat shit and too much of it.' All the candidates will mention their health plans but no one will bring up the key factor: the citizens don't lift a finger to help," Maher said sternly.

Keep Reading Show less

There is no shortage of proposals from the, um, what's the word for it… huge, group of Democratic presidential candidates this year. But one may stand out from the pack as being not just bold but also necessary; during a CNN town hall about climate change Andrew Yang proposed a "green amendment" to the constitution.

Keep Reading Show less
Me Too Kit

The creator of the Me Too kit — an at home rape kit that has yet to hit the market — has come under fire as sexual assault advocates argue the kit is dangerous and misleading for women.

The kit is marketed as "the first ever at home kit for commercial use," according to the company's website. "Your experience. Your kit. Your story. Your life. Your choice. Every survivor has a story, every survivor has a voice." Customers will soon be able order one of the DIY kits in order to collect evidence "within the confines of the survivor's chosen place of safety" after an assault.

"With MeToo Kit, we are able to collect DNA samples and other tissues, which upon testing can provide the necessary time-sensitive evidence required in a court of law to identify a sexual predator's involvement with sexual assault," according to the website.

Keep Reading Show less