A Platform for Collective Wisdom

Impact is measured in its outputs of measurement, which I believe is reported back on platforms like Philanthropedia, GiveWell and others.

However, challenges persist in measuring impact for traditional investments, such as time period for returns. I think it also stems from changing the narrative of how to make investments accountable for impact than for a simple value sacrificing compensation.

There’s more and more talk of blended capital – a host of investors out there awaiting the emergence of profitable enterprises that will improve the lives of the poor in fundamental ways. We’ve been waiting for a while. In the real world of the poor, real change still means stepping up with money that you don’t expect to get back while demanding maximum returns in the form of impact.

There are serious challenges for improving efficiency in measuring impact – the existing power dynamic between donors and grantees prevents a feedback loop for foundations to know what is working and what is not. Investors, philanthropists, and for everyone else, people are more likely to achieve results that they intentionally seek.

The interest of the public sector is that foreign policy often equates to economic policy. An economic prowess of promoting growth and development is a drive wedge for sustainable growth, stability, peace, and prosperity.

Governments’ traditional roles have been to strengthen the reach by opening foreign markets, improving governance, transparency, as well as conditions for private sector-led growth. Governments and some foundations now provide funding to improve the social, political, and regulatory environments in which social enterprises and their investors operate—essentially a market building activity.

Today’s political environment is often described as “smart power,” using means of trade, diplomacy, aid, and others for a value-driven policy where individuals, businesses, and institutions act through global networks.

For any government to secure national interest upon economic industrial links and trades, it needs to deliver solutions to sustainability and scalability in impact investing as well as advancing conditions for private sector-led growth.

National interests are no longer simply delivered through applications of intelligence and tact to moderate relations between governments; it rather embraces solutions to cross-cutting socioeconomic challenges.

The ability to understand the evolving environment and capitalize on trends is a crucial skill of today enabling leaders to convert power resources into successful strategies.

I hope by continuing to work on a platform – we begin to understand that for more difficult problems, more nuanced and ambiguous solutions are. More ambiguous the solutions, the more diversity of voices there needs to be. Through convening of intelligence, I hope to continue the work where we cultivate conditions wherein collective wisdom emerges over time.

The How-to Guide on Harnessing Private Capital for Good

Generalities.
Technologies.
Networks.

Space Tech for Good

Eighth Meeting of the Inter-Agency and Expert Group on Sustainable
Development Goal Indicator (IAEG-SDGs)

European Global Navigation Satellite System and Copernicus:
Supporting the Sustainable Development Goals

Space Supporting the Sustainable Development Goals

Space Activities to achieve Sustainable Development Goals

One giant leap for capitalistkind: private enterprise in outer space

Our Most Emergent Global Crises

Investing in sound value-driven opportunities that can significantly reduce global threats are “good” investments, not only in a humanitarian sense but also in driving monetary value.

So how do we know what lies ahead of our future? What is the greatest crisis of our generation? What is relevant to us?

There is a lot of noise to screen out what is certainly dangerous or not. I would personally refer to the World Economic Forum’s The Global Risks Report. The attached link is the version for the 2019. A quick primer on risk management is that it starts with identifying and estimating the probability and impact of a given threat.

The first thing you will see is a map of different colors into the following categories of risks: economic, environmental, geopolitical, societal, and technological.[1] It will also show you the likelihood of the event happening as well as the magnitude of the risk inherent. On the top right of the corner of the graph, you can view the events that are most likely to happen with the greatest magnitude.

For your interest, the top three items all belong to a single category – Environmental. They are – “extreme weather events, failure of climate-change mitigation and adaptation, and natural disasters.”[2] Another one that is close to the three is cyber-attacks under the category of Technological. There are other interesting graphs in the report, but I’ll leave them to you for your own pleasure.

The companies with the new promise of a future are often misunderstood. Another way that we value the “good” or a potential “impact” of a company might be the assessing the potential of the companies to hopefully bring the imminent risks (indicated above are natural disasters, extreme weather events, and failure of climate-change mitigation and adaptation) lower on the graph spectrum. In other words, to have less impact when it happens or less likelihood of happening.

One thing I would note is that these categories refer to systematic challenges, where the identified problems are interconnected in every field of human activity. Therefore, the attempts to solve one issue may unintentionally contribute to another – like a technology that attempts to predict extreme weather events may put government employees out of work or potentially contribute to asset bubbles in a major economy.

In how companies create value, perhaps the first way of looking at sound companies is whether or not they are aimed at tackling systematic challenges or in a way to maximizes efficiency in a respective industry. In today’s globalized economy, often this is built upon a bedrock of transnational production, an inflow of people, goods, money, and ideas through multiple networks and other economic decentralization movements.  

Here’s an example. Cyber-attacks are happening more often in prevalence and disruptive potential. They present serious strategic critical infrastructure damage across the world including the government, railways, banks, and telecommunications providers, as the vulnerability to attacks increase with radical and systematic shocks.

One that may be well and alive in people’s memories is the North Korean government-sponsored hacking of Sony Pictures. North Korea could potentially hack into intelligence about nuclear deterrence in the United States or South Korea. Another adversary can also thieve nuclear material or sabotage nuclear facility by knocking out digital systems in nuclear facilities.

A growing trend that could mitigate this increased risk is the adoption of blockchain technologies. Blockchain technology can be used to protect systems and devices from attacks. They can protect data exchanges between IoT devices without a centralized authority and a data verification mechanism.[3] Implementing robust processes is essential for effective management of complex systems and is at the heart of long-standing quality management programs across the industry.

However, often technologies have been swept up in a web of restrictions, regulations, and international conventions. Innovators and investors can address the barriers in different ways, but more effective partnership mechanisms may be prudent. As technologies have been subjected to regulatory regulations or in scrutiny for a positive pricing environment, it might be more effective to identify shared priorities across stakeholders or finding a way to reduce costs in streamlining the industry.

For investors, this means having to navigate the policies of governments of uncertainties that require expertise. Perhaps this means providing early-stage risk capital for entrepreneurs to de-risk business models.

New technologies and dynamics have improved our ability to identify trends and assess risks. In investing into emerging markets, the way to realistically mitigate risk is to obtain insurance through Overseas Private Investment Corporation or partnering with government institutions, like USAID, which provides loan guarantees to encourage banks in poor countries to lend to targeted groups.

The goal for OPIC is to provide innovative financial solutions for private investors and provides upfront due-diligence to assess the ability to raise additional private equity capital. What is really interesting is that OPIC goes to the country to ask the locals for trends in local deregulation and indicators on how open the economy is to understand how returns will be made. They then connect with investors with the right skill set to capitalize on the opportunity in operating experiences, locale, and in the ability to add enough value for the entrepreneurs.

The proper risk mitigation starts with due diligence. Once we have vetted out what “issue” is interesting and is relevant, the investors conduct comprehensive due diligence covering legal, economic, technical, and others to assess eligibility criteria.

So, how do we invest in our most emergent crises? In sum, I would point to a business that can is operationally sound to curb its own organizational risks and systematically tackles inefficiencies in an industry in a given area – for instance, environmental or cyber. Match them with investors that are well-equipped for the operating environment to achieve its business objectives.

The role that promote a common platform for deals with risk profiles may be needed to build a momentum to build and scale. Investments could be better classified by factors such as performance, risk, expected return, and an exit timeline for investors preferences.

Greater collaboration among players can help lower due diligence expenses to realize synergistic potential. From a policy perspective, often this means supporting a more balanced analysis that helps companies and stakeholders to make strategic decisions about investment and collaboration opportunities.


[1] http://www3.weforum.org/docs/WEF_Global_Risks_Report_2019.pdf

[2] Ibid.

[3] https://www.forbes.com/sites/andrewarnold/2019/01/30/4-promising-use-cases-of-blockchain-in-cybersecurity/#7a7eba293ac3

What Makes an Investment “Impactful”?

Until early 2000s, investors have historically drawn a clear distinction between their investment activities and philanthropy. Recently, the impact investing industry is growing rapidly. The idea of impact investing came about from Christian ministries in the United States in mid-1700s when moral responsibilities of commercial enterprises came up against profiting from slavery, and boycotts.

Investors saw that “impact” based portfolios were much less affected by the 2008 financial downturn, and found that impact investment was a method to mitigate short-term risks for long-term value creation.

According to the Global Impact Investing Network (GIIN), a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing across funders, it defines it as “investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.

Impact Investing includes investments that range from producing a return of principal capital to offering market‐rate or even market‐beating financial returns…Impact investors actively seek to place capital in businesses and funds that can harness the positive power of enterprise.”

Impact investing is quite simple. It attempts to solve our social problems by mobilizing capital. While traditional investments lie on the spectrum without regard to social impact, philanthropy does not regard financial returns.

Impact investing lays in a space where financial returns grow with impact. Impact investing can expect financial return or choose to accept a lower return. Investors and funders would have a range of expectations based on the risk continuum of financial and impact returns.

Impact investing ideally has the following mechanisms:

  • It is value-aligned: Transactions are mostly private debt or equity investments. There are publicly listed impact investments, but they are categorized under a screened socially responsible investment, in which investors seek to minimize negative impact than a proactive positive impact. An investor’s intention to have a positive social or environmental impact through investments is essential.
  • It has impact returns: The model of the business should be designed with intended effect on the target population may be much broader than the consumers. Values should be ideally integrated into the business model.
  • It has financial returns: Impact investments are expected to generate a financial return on capital or, at minimum, a return of capital. Range of return classes and expectations: Target financial returns that range from below market (sometimes called concessionary) to risk-adjusted market rate, and can be made across asset classes, including but not limited to cash equivalents, fixed income, venture capital, and private equity.

These investors operate across multiple business sectors, including agriculture, water, housing, education, health, energy and financial services. The impact objectives may vary such as mitigating climate change or providing assets for poor people. It can also take the form of different finance structures, such as debt, equity, or other like social innovation bonds. According to the Rockefeller Foundation and J.P. Morgan, they provide capital, expect financial returns to business designed with the intent to general positive social or environmental returns.

Impact investors could range broadly across sectors and objectives – private wealth managers, commercial banks, pension fund managers, boutique investment funds, companies and community development finance institutions. Essentially, there exist the funders (government, foundations, family offices, high net worth individuals, and other socially responsible investing) that fund impact investing intermediaries (microfinance institutions, social banks, social venture capital/private equity firms, and pension funds) that invest in social enterprises for beneficiaries.

Surveying Korea’s Impact Ecosystem

Korea’s growth initially depended on a low wage, educated and disciplined labor force to produce goods for exports from its predominantly agricultural state possessing few natural resources. When the state prioritized economic development with a combination of state planning and entrepreneurship, South Korea had set forth on a trajectory into a prosperous, industrial society.

A combined effort of state and entrepreneurs later became family-owned conglomerates, capital-intensive in manufacturing, construction, and steel industries. The conglomerates today including Samsung, POSCO, LG, and others became the foundation for the social innovation and IT entrants.

The government followed suit to ascertain its policy framework. The Social Enterprise Promotion Act (SEPA), which became effective in 2017, resulted in the establishment of the Korea Social Enterprise Promotion Agency (KoSEA), a state-run incubator for SEs. It followed suit with the establishment of the Korean Social Investment Fund (KSIF), a social consulting organization which promotes sustainability amongst businesses, the Seoul Social Economy Support Centre, as well as a range of SME financing products and preferential access to public procurement bidding.27

Areas of investments are thus defined by the social and local needs identified by the government. Social enterprises are defined as those that perform business activities of producing and selling products and services while pursuing such social purposes as providing vulnerable social groups with social services or jobs to improve the quality of life of the local residents.

Korean governments have made efforts to mobilize participation of the private sector and civil society in furthering social development. However, actual contribution of business and financial communities has been slow compared to other advanced countries.

In Korea, social investment has an impact-first orientation than as mechanisms for financial returns. Ventures that became interested in investing in social enterprises with social and financial returns came about with leading enterprise ecosystem with incubators and accelerators. Venture groups like D3 Jubilee and Crevisse Partners built awareness around impact investment opportunities by accelerating the operations, equity investing, and building capacities for shared learning. Social venture acceleration and incubation are also done by other institutions like MYSC, HGI, and SK Happiness Foundation.28 These incubators act as intermediaries for social entrepreneurs to build operations and secure external partnerships.

These incubators act as intermediaries for social entrepreneurs to build operations and secure external partnerships. Sopoong, which was launched by the founder of Daum, is an impact investing venture group. It invested in SoCar, a car-sharing company based in Seoul. SoCar obtained public parking spaces with the government support and then it obtained funding from the Seoul Social Investment Fund. And subsequently, the business secured funding from private investors Bain Capital and SK Group to exit.[9]

South Korea is one of the most business-friendly environments to foster entrepreneurship. There exists sufficient government support with incubation, procurement, funding, policies, and incubation expertise with government grants on public-private partnership investments, such as green finance, SIBs, and other investment mechanisms. However, despite the many approaches and investment opportunities, impact investing is still not as active in South Korea. There is a limited impact investment opportunities in public and real estate markets that would have competitive financial returns with impact. There is also general skepticism that impact investment could have high returns. The domestic laws also are not conducive for a more flexible impact investment approaches. For instance, nonprofits cannot keep more than five percent of its own equities.

Here are the recommendations for each stated industry.

Government

The idea of social innovation is considered as derived from the political left. This is due to the forefront advocate of social innovation was from Park Wonsoon, the Mayor of Seoul City.[10]

Social innovation is seen as a partisan. The main point of criticism is that a social innovation budget will be used to support many activists and practitioners, mainly from the civil society. Civil society organizations are seen as more progressive and often in opposition to those with conservative perspectives.

The word “social” is misunderstood, as traditionally, South Korea has been a government and corporation driven society. When the Korean government’s social innovation task force first talked about social economy, they found that the general public were uncomfortable with the word ‘social’ and asked “if it meant socialist.”[11]  

The most effective way to address these challenges is to create a public consensus and influence policy. By pursuing a blended finance model or large government-led funds, they can spread awareness of social investment opportunities and also pursue a mechanism where it shares risk with the other stakeholders.

From the government arm, it needs to lay the groundwork for the agenda to be embraced and embedded across the funders – institutional and venture capital. The momentum needs to also be balanced with political commitment, alignment with local cities, and the existing infrastructure to allow for the legal framework for impact investors and social innovators to flourish. 

Asset Management Funds

A well-constructed impact portfolio is globally diversified with multiple asset class and sub‐asset class allocations. The primary difference between an impact portfolio and a traditional portfolio involves the investment philosophy and process of the underlying managers and funds the portfolio invests with; asset managers that are integrating environmental, social and governance (“ESG”) criteria into their investment process and are transparently monitoring the impact of their efforts are preferred when constructing an impact portfolio. Furthermore, although portfolio risks and returns are compared against traditional benchmarks, impact metrics are also tracked.

However, challenges persist for social innovation sectors to participate in the global economy in South Korea, as there is simply a lack of public equity listed companies with competitive financial and impact returns.

In the United States, asset management solutions pursue a blended finance model with social goals integrated into the investment process. Adoption of corporate shared values, sustainable development goals, and global agendas are still nascent in the Korean social venture scene. For large asset management institutions in Korea without blended social objectives, there is a niche to invest in risk or growth capital for social enterprises. An impact-based portfolio could invest in market‐rate and/or below‐market‐rate investments, depending on the investor’s risk‐ return profile and impact intent.

Across geographies, sectors, or stages of market or company development, over-investment in impact practices may create a drag on financial returns. Whether this drag is an acceptable “tradeoff” for the level of impact return and/or level of evidence of impact is a choice each investor will need to make. It may be possible to surmise that certain investments with particular impact goals and standards for impact evidence are likely to have a wider range of potential deviations from “market-rate” returns.

Impact Enterprises

In South Korea, the idea of social innovation focuses on citizens leading the ideation, planning as well as implementation of projects. One of the existing obstacles is that there is simply a lack of social enterprises capitalizing on financial returns or have strong operational resilience. Korean institutional frameworks separate strictly the planning and implementation stage when funding social enterprises. Impact enterprises should be diligent to carve out a unique competitive differentiation in their respective markets to ensure sustainable financial viability. Similarly, they should be diligent to seek out collaboration opportunities to achieve the benefits that derive from size and scale.

For these social enterprises, they should proactively measure the social and environmental objectives as directly tied to the business model. Therefore, the measurement of these indicators may be no different from measurement of the business indicators. In addition, reporting of the impact and financial metrics will help to drive further accountability and transparency among organizations.

These organizations can also enroll in approval processes that help promote sector accountability and transparency. B Corp that evaluates the social and environmental impact of companies and funds and assigns them a score based on certain criteria. GIIRS measures the social and environmental impact of funds and companies and provides comparable and verified metrics and ratings. These ratings in such approval processes can help legitimize social enterprises and further its global potential applications.

A common language around social metrics and standards allows stakeholders to communicate more effectively, benchmark and compare investments, and evaluate social and environmental performance. Comparable metrics like using SDGs allow investors to employ different strategies on the social bottom line, and thus are important for mainstreaming impact investing. Intermediaries can play a key role in advancing this common language. South Korea can maximize its competitive edge in technologies and entrepreneurship, have them adaptable for SDGs to extend its global reach.

The funders generally are left to government, a program introduced by institutional investors, nonprofits, and other accelerators than from its value-driven institutional asset management model.

What South Korean ecosystem currently lacks is a mechanism to import knowledge of overseas impact investing trends. With strategic partnerships with global fund managers, the incubated companies can extend their reach and learn from best practices. Multi-stakeholder partnerships and collaborations will become increasingly important in realizing these shared value opportunities.


[1] AVPN, Social Investment Lanscape in Asia – South Korea

[2] Inter-American Development Bank, 2016, Study of Social Entrepreneurship and Innovation Ecosystem in South East and East Asian Countries: Final Reflections

[3] 뉴스프리존, 부산시, ‘CCVC 코리아임팩트 펀드’ 195 조성, http://www.newsfreezone.co.kr/news/articleView.html?idxno=88223   

[4] Ibid.

[5] Global Innovation Exchange, KOICA, https://www.globalinnovationexchange.org/organizations/korea-international-cooperation-agency

[6] KOICA, Guideline for KOICA to Utilize Impact Investment and Blended Finance, https://www.koica.go.kr/bbs/koica_en/717/317815/download.do 

[7] Ibid.

[8] 이철영, 임창규, 임팩트 투자, 투자의 미래,

[9] Ibid.

[10] Social Innovation Exchange, Conversation with the Social Innovation Task Force, https://socialinnovationexchange.org/insights/conversation-social-innovation-task-force-government-south-korea

[11] Ibid.

Impact Investing in Asia

Asia has felt so far away but is less new to me now. With the help of family, friends, and gracious hosts, I learned tremendously. I breathed in secondhand smoking, met my mentors at the Asia Venture Philanthropy Network (AVPN), ate Ya Kun Kaya Toast, met with friends from Temasek a sustainability fund, and went surfing with family friends. Here is what I learned:

Asia is complex. The impact investing ecosystem is still at its early stage. The government is allocating capital through green bonds or lending mechanisms, but there are only a handful of investors or family offices devoted to the field. Korea has an advantage of its thriving entrepreneurial ecosystem and growing corporate and government initiatives, but from what I learned, Hong Kong and Singapore may need more pioneers to build upon the existing ecosystem and contribute to a cultural shift.

I thought I could be helpful with my experiences in the U.S., but I ultimately felt like taking language from the States perhaps is not the most effective, as they reflect a more Western mainstream attitudinal approach. Network or platform based country-specific initiatives were more effective in attracting private investors, banks, and policymakers for long-term sectoral engagement.

With the protest happening, I kept thinking these populist trends in ethnic, political, or religious divides draw parallel to other countries and trickle down to the Southeast Asian market. Impact investing began after the financial crises that it did not ride with the plunge. Institutionalizing impact investing across asset classes also translate to asset diversification effectively hedging geopolitical and environmental risk for long-term value creation. I’m so grateful for the insight and advice and for new friends who fiercely pioneered through the Asian market.

Moving Toward Value-Based Financial Systems

(Originally written: 11.13.2018)

I’ve been thinking cross-culturally about finance institutions and how we can reinvent the modern systems in a value-based investing approach.

The growth of finance made civilizations possible, as the role of finance and institutions – money, bonds, banks, corporations, helped urban centers to expand and cultures to flourish.

Finance was at key moments of history as different apparatus, as products were developed and reinvented in the course of history. Finance innovations emerged to solve economic problems of time and geography. An example – a religious institution like Templar that became a legal system in Europe to adjudicate disputes and rights became a theoretical foundation for Europe’s unique financial architecture. While its extensive geographical network provided for an easier transfer of money through space, Templar dissolved. Its distribution of wealth made it a political target, a loss of its original mission.

Chinese financial system was different from the Greco-Roman to be more nimble – the political context determined its solution. For Europe, its reliance on capital market lies in the fragmentation and weakness of medieval states.

Finance markets and political context today coexist and complement, but the past gives us lessons on how we can risk share and adapt variations of the tools to different kinds of societies. Discoveries of financial solutions led to its civilizations most important achievements – writing, mathematics, how we save and invest, and how to harmonize global economy. It also created problems like slavery, imperialism, and other crises.

Financial thinking in a modern economy is difficult – as crashes and bubbles always take people by surprise – and I think it is because we rely too much on specialized tools from legal arguments to modern portfolio theory. As we move toward a collective global civilization with a greater proportion of the population in complex societies, finance needs to keep up.

The market is driven by spontaneous, mutual hope, often irrationality or optimistic dream. Businesses play a game of skill and chance, where it relies on average results of many investments through ebbs of hope and cold calculation. A large portion of it depended on spontaneous optimism than mathematical expectation.

Gambling investors based on hopes of new technologies enabled technological progress. Companies that harness the spirit – enable the markets to overcome the financial inertia – a force in the economy. The market sentiment that often holds the economy back because of irrational fears, managed correctly with public expectations, could become a force for good.

The risk in individual investing is often inside us – how well can we ride out plunges and the market – how much experience do I have or confidence do I have and go against the current? Could I make a lot of money? Can I rely on my willpower to endure the probabilities and consequences?

Progress is based on optimism. Good innovation can be celebrated where modern economies reward activities that create value than extract them. The shared values – where creating of value can be more collective – based on a dynamic division of labor focused on problems that 21st century are facing – can be more sustainable and preliminary to an economy where we create value than extract them.

It’s an essential thesis that optimism has and continues to drive financial markets and fund economic growth, and that optimism can be tied to higher motives and collective goals.

Translating Risk for Social Impact

“Successful private equity needs macro-economic and micro-economic factors. These include political stability, sophisticated capital markets, corporate governance, strong entrepreneurial structure, and proper benchmarking. Other factors include fragmented markets, low competition, and comparability of funds.”

— Markus Ableitinger, Director of Capital Dynamics

(Originally written: 10.12.2018)

Businesses did not begin to champion social impact or corporate social responsibility until they were truly faced with understanding counter risk to global operations – the effects of environmental, social, and governance in networked operations and stakeholder management. They saw that portfolios with “impact” or ESG indicators have outperformed those during the 2008 downturn, and found impact investing as a method to mitigate short-term risk for long-term value creation. Essentially then, risk tolerance becomes to what extent do we want our dollars to be philanthropic and the type of risk to a portfolio, climate, technology, etc., are equivalent to the opportunity of innovation in the portfolio companies.

However, there is substantial lack of language of risk mitigation in impact investments or studies of political determinants of venture capital investments. Yet, VCs include political stability among the important determinants of receiving VC funding.

The supply of VC comes from the share of risk capital provided by private investors. Along this line, the macro factors are mainly general economy, technological opportunities, entrepreneurial environment, and political risk.

Markus Ableitinger, Director of Capital Dynamics says, “successful private equity needs macro-economic and micro-economic factors. These include political stability, sophisticated capital markets, corporate governance, strong entrepreneurial structure, and proper benchmarking. Other factors include fragmented markets, low competition, and comparability of funds.”

Moreover, venture capitalists and investors are growing in Singapore taking advantage of the country’s political stability, highly educated workforce and strategic location. Despite the fact that micro, macro and even legal determinants of VC financing have more or less been analyzed; changes in political stability of countries have received little attention.

VC investment intensity is the total value of stocks traded, the significance of IPO in a fixed effects model, GDP growth (GDP) as well as inflation, labor market rigidities, and some of the political risk variables – investment profile, socioeconomic conditions, corruption and other determinants.

Given the increasing frequency and intensity of political/economic crises, a more systematic method of measuring political risk and evaluating its impact on market prices is required for emerging markets. Businesses can successfully mitigate and manage macro-political risk in emerging markets with targeted preventive investments into portfolio companies.

For instance, with Khashoggi, the United States is about to sanction specific entities and France and others could also back sanctions, which would affect countries with commercial deals with Saudi Arabia and have a certain number of days to wind down the activities depending on the products being sanctioned – that would translate into – from relying exclusively on export products to opening up domestic companies and technologies less variable to political activities.

For VCs, where we’re concerned with risk in maintaining profits, sustaining economic growth and protecting investments from market fluctuations, we have to manage threats in regulatory relationships, overall legal environment, and geopolitics critical to smooth operations.

Today’s environment requires innovation by companies by both sensing and understanding these risks and in adapting risk management to include networked-based models of information sharing. Each area of risk management is becoming a strategic value for an enterprise, and must be mainstreamed into the entire organization’s value proposition – beyond philanthropy and the CSR paradigm.When portfolio companies are scanned for threat and vulnerability for types of risk, we’re also able to measurably predict the role of companies with business processes that can conduct mitigation potentially as a supply chain partner. We can effectively then incentivize companies for mergers and acquisition, monitor its capacity for IPOs, and others – by geopolitical prediction.