My Path to Investing in Vital Neighborhoods
An Update from Melissa
After a two+ year journey, my work life is taking an exciting turn. I’m investing in purpose-driven entrepreneurs with a fantastic family office. I'm also an advisor to two groups working on neighbourhood vitality. My work feels meaningful and natural. Every step I took when transitioning out of my start-up led me here, but it didn’t always feel like it at the time.
Read on to learn what I’m up to, and for some musings on following a winding path.
Roots
I started my career at Blue Ridge Commons, a 500-unit public housing project in Virginia. It was founded by some cool, green architects to upgrade our nation’s affordable housing. My work involved transforming our community into a better place to live. Things like tending community gardens and hosting financial literacy programs for kids. We were trying to make a business case for investing in the neighbourhood. Our work, we would prove, could reduce costly evictions and vandalism for property management.
It was here that I gained a nuanced understanding of poverty and place in America. I saw how socioeconomic factors, often determined by geographic boundaries like zip codes, impact not only access to services but the very fabric of our daily lives.
It is also where I first learned to use business models to solve social problems.
Transitions
Ten years later I was living in Nairobi, Kenya. I built a primary care enterprise that has provided >500,000 visits for slum residents. My startup Access Afya was my platform to work on health and the environment. I started a program to improve health in schools and factories. Eventually, our tech-enabled clinics demonstrated a profitable and scalable franchise model.
I stepped down as CEO two years ago to return to my roots. We were solving for health access, but I saw so many more opportunities to maintain good health rather than treating it in our clinics. I missed the early stages of building something new. I was ready to explore the world of business models that offered the foundations of better health and livelihoods.
Exploring the Foundations of Vitality
I honed in on a few community-level metrics, which, coming from my healthcare background, I called the Neighborhood Vitals.
Access to fresh and affordable food. Safe, affordable housing. An environment that invites movement. Community spaces, ideally green ones. Water and sanitation, which my neighbours and I might take for granted in London, but present a huge barrier to living well for billions of people around the world. Safety, which includes protection from pollution. I explored the role of beauty in supporting mental and environmental health.
If we could better measure these things - create a scorecard - we could start to improve them. After talking to a bunch of experts I learned my first instinct was wrong.
We have a fairly broad consensus on what makes a neighbourhood vital, and some awesome groups working on data visualisation. The challenge now is to figure out funding, distribution to vulnerable communities, and how to maintain services and infrastructure as people move and governments change.
Linking the Dots
My efforts to zoom out and take an ecosystem view of urban vitality over the past two years led me down a winding path.
I received a fellowship to spend time researching and ideating business models to tackle the foundations of vitality.
I worked with an emerging venture capital firm investing in Africa and learned about building new funds.
I started this newsletter and wrote regularly about social investing, entrepreneurship and building vital places.
I helped design and run a course showing investors how to think differently about funding healthcare in Africa.
I looked into starting an investment fund that would back high-impact entrepreneurs building the future of healthy cities.
This last job was like a capstone project. I knew from my conversations with entrepreneurs that early-stage investment was the hardest to find. I knew our fund model needed to be unique to cater for companies with more physical investments. From my time in venture capital, I knew exactly which classic fund elements, like exit timelines, to change. This all flowed into a business plan and pitch for a new type of impact investor.
An Ecosystem Investor
I started to develop a recipe for a vital neighbourhood that is intersectional. The foundation is impact investing, and it includes venture building, as well as a business model for the commons.
Risk Capital as a Cornerstone
There has been a lot of talk about how the world needs more funds targeting zebras than unicorns. In Africa especially, there is so much infrastructure to build that the VC mantra of backing “asset-light” businesses is limiting.
One of my favourite examples of this is an East African entrepreneur who is creating chemical-free wastewater treatment. Rapid urbanization has overwhelmed municipalities in Kenya, meaning up to 96% of sewage ends up in open air or surface water. Their technology can’t be layered on top of the existing infrastructure for waste management because that infrastructure doesn't exist. To invest in businesses like this one is to be comfortable with a much longer timeline to profitability or exit in a market that carries substantial risk.
My new role with Wrightwood Investments lets me spend most of my energy on this ingredient. We are exactly the type of investor that I find so rare in the ecosystem: patient, long-term thinkers who are willing to get behind ideas that carry short-term risks, but just might change the world. We’ve invested in entrepreneurs working to improve women’s health in the Middle East and sanitation in East Africa. I am supporting our current portfolio, but also looking at new deals that fit my vital neighbourhoods thesis.
Targeted Venture Building
In East Africa, many founders including myself end up building a lot of things tangential to our core businesses. I ran a healthcare network in a country with <20% insurance coverage, so we should also be working on healthcare financing, right?
Venture building could integrate well into an urban impact fund. For instance, if a portfolio company making affordable housing out of recycled plastics needs an ethical recycling partner to scale up, the fund could design a venture to address that gap. This approach leverages input from founders’ knowledge and needs.
I’ve joined a London-based venture builder called Zinc as an Advisor to their Healthy Environments cohort. We’re designing businesses that do things like reduce air pollution, combat urban heat islands, and reduce falls. Being able to shape this next generation of mission-driven urban startups is a rewarding way to invest in the ecosystem.
A Business Model for the Commons
Social entrepreneurs and community groups are getting stuff done. Unclogging hospitals or boosting test scores with rooms of well-nourished children. It’s pretty hard to get paid for these things, with the exception of a few social impact bond programs. The fact that the state, or other organizations, ultimately benefit from these programs is a robbery of credit.
One of my mentors, David Aylward, is working now on a business model for “the commons”, which would measure the long-term impact of investing in vitality at the neighbourhood level. How much money is being saved on healthcare, incarceration, and other social services?
I get to bring my perspective to this ambitious work too. I’m thinking through the investment model, and mapping the bundle of interventions they are looking at in Colorado to the context and entrepreneurial scene in Nairobi.
Walking Onwards
If you made it to the end, you know me pretty well! What motivates me, and how I navigated a few big career jumps to wind up where I am today. So what?
We could talk! You know my deal now, and if you see some intersections, let’s connect.
Learn from my winding road. This deserves an essay itself, but my process of navigating a career transition involved a lot of experimentation paired with time for reflection and writing.
Have a reflective end to the year, wherever you are! And please let me know in the comments what you are working on, and how you found your way there.
Thanks
for the stimulating conversations that helped me write this down, for always making time to read a draft, and for giving me a format to share this update, and a lot of support along the way.
This is so exciting, Melissa! "Every step till now ..."
This is really inspiring, thank you! We’re currently trying to align the interests of insurers and local communities in the UK. I’d love to chat.