I was recently joined by Caroline Bressan, CEO at Open Road Impact, to discuss how Open Road funds companies combating climate change and the importance of keeping impact on track. Caroline has worked in impact investing her entire career, across the investment process in the U.S., Latin America and Africa.
Jeff Gitterman: Hi, and welcome to The Impact on FinTech TV down on the floor of the New York Stock Exchange. I’m your host, Jeff Gitterman. I’m joined today by Caroline Bressan. She is the CEO of Open Road. Caroline, welcome to the show.
Caroline Bressan: Thanks so much for having me Jeff.
Gitterman: So it’s a tough time in the nonprofit space right now, and I don’t want to get in right away to the politics of all of it. I want to get into the solutions and how you’re helping the space and some of the issues that you’re facing right now. So we’re going to get into all of that, but before I do, I always like a little bit of backstory of why are you using your genius and your talents in the impact space and not out trying to make money on Wall Street or an investment bank?
Bressan: Sure. So I went to University of Michigan for undergrad, which had some great thinkers about the kernels of impact investing. CK Prahalad “Base of the Pyramid,” and I was a liberal arts student that felt like I was learning about all the problems of the world, but had no tools to solve them. And so enter impact investing, enter finance. I started learning about finance, and microfinance specifically, and figured out that I could kind of help the world while also using my financial skillset.
Gitterman: Amazing. So talk to me about the space, and obviously it’s a very challenging time right now. What are some of the ways that Open Road is supporting nonprofits?
Bressan: Sure. So Open Road’s kind of mission reason for being is to unstick capital. And I know unstick is not a real word, but it is what we do. We provide bridge loans to accelerate impact when organizations have incoming funding but haven’t quite gotten the check in the mail, so to speak. And so imagine you’re an entrepreneur, you have just successfully raised $2 million, you’re so excited you can’t wait, and then the actual legal documentation takes eight months to close. What do you do?
Gitterman: How do you stay afloat?
Bressan: If you have friends and family, maybe they’ll chip in. But keeping your team together is the number one thing you’re thinking about, keeping your organization growing. And so Open Road comes in really quickly and we’ll provide these bridge loans to keep organizations’ impact on track.
Gitterman: Talk to me about the business conversion at Open Road that just took place.
Bressan: Yeah, so our first fund, we were a for-profit, we thought bridge financing, they do this on Wall Street, let’s create an impact investing bridge financing fund. And it turns out that there’s a real trade off for us between impact and risk. And in our investment committee we found that we were having to say no to organizations that really needed another month or two, but the outcome was somewhat uncertain. And so we decided that we could raise both philanthropic capital and investment if we were in the form of a nonprofit. So we just converted to a nonprofit as of December.
To catch the full conversation, you can watch my interview with Caroline Bressan.
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