Apparel brand TOMS, the poster child of the one-for-one business model, is taking its support for fellow purpose-driven businesses to the next level. The newly launched TOMS Social Entrepreneurship Fund is investing in up-and-coming startups that can make a difference.
Founder Blake Mycoskie made the announcement on November 11 at an event in New York. He said that after selling half of TOMS to private equity firm Bain Capital last year, he wanted to put the money to good use.
"When the Bain transaction happened, I woke up. It was like I was in a dream. All of a sudden, I had all this wealth that I never thought I'd have, because that was not the [company's original] purpose," Mycoskie said. "I thought, what can we do differently? And I realized we could really continue to catalyze social entrepreneurship."
The fund’s portfolio includes 11 initial investments, including:
- Food startup Back to the Roots;
- Outdoor gear and apparel company Cotopaxi;
- Change.org, which lets anyone create a petition;
- Ava, which creates software for the hard of hearing;
- Online shopping club Thrive Market (not to be confused with ethical coffee company THRIVE Farmers);
- Luxury natural skincare company Laxmi;
- Artlifting, which sells art on behalf of the homeless;
- Andela, which provides software development education to Africans, financed by client work the students do upon completing their training;
- Kairos Society, a network for young social entrepreneurs;
- Owlet, creators of a smart sock that monitors infants’ heart rate and oxygen levels; and
- Rubicon Global, the company behind “an Uber for trash.”
TOMS is famous for its shoe donations and other philanthropy tied to each sale. Since its launch in 2006, the company expanded to sell coffee, eyewear, and bags, and donations from the revenue have funded water projects, sight-saving surgeries, prescription glasses, medical treatments, and training and materials to assist child birth.
"When we started, nobody was talking about business and giving [together]," Mycoskie said. "Then we started to see more and more companies add the one-for-one model, and I thought that the impact that TOMS could have 50 or 100 years from now won't be measured in shoes or eyesight [we've improved], but actually the people we've influenced to incorporate giving into their businesses."
In 2013, the company launched the TOMS Marketplace, a curated collection of over 200 socially conscious products. The TOMS Social Entrepreneurship Fund will further support social entrepreneurs by providing much-needed financing.
The fund will consider equity investments in companies which meet the following criteria:
- Have an innovative business model that creates meaningful change.
- Be a for-profit business.
- Have a direct social mission (at scale, make the world a better place).
- Has launched, or is preparing to launch within the next 90 days.
- Have a product or service with a clear revenue stream(s) with paying customers.
- If you’re making a technical product, your team has the necessary skills to develop and manufacture the product without outside expertise.
- Have an Investment Presentation or Business Plan (minimum 15 slides/pages) that describes the problem your company is solving; the market opportunity; the background qualifications of your team; and the financial terms of the investment opportunity.
- A minimum of $100,000 of commitments from other Accredited Investors, Venture Capital Fund(s), or a Startup Accelerator.
The TOMS Social Entrepreneurship Fund will not lead investment rounds and is self-described as a “strategic, follow-on investor.” To apply for an investment, entrepreneurs must mail a hard copy of their investment presentation or business plan to the organization’s P.O. Box in California.