Yes, you can do good while making money, says fund manager
Faye Walsh Drouillard is co-founder of WakeUp Capital, a €50m early-stage impact investment fund to support emerging companies who share their vision for impacting systemic change that will benefit people, the planet and the balance sheets of their owners and investors.
The first clue to Faye Walsh Drouillard can be found in her name. Admittedly, ‘Faye’ is not purely American in origin it is no stranger at places like baseball parks and high-school prom dances.
Unsurprisingly, ‘Walsh’ is Irish, cascading down four generations from a great-grandfather who took the now topically famous Biden pilgrimage from Mayo to Connecticut in the early part of the last century. The ‘Drouillard’ part is more recent, coming from marriage to her French husband, Vincent, who she met while working in Paris.
Another clue to Walsh Drouillard is to understand her intention to, as she puts it, ‘do good and make money.’ She, along with her business partner Mark Peters, are currently full steam ahead on the development of an early-stage impact investment fund, WakeUp Capital, which they aim to close later this year at around €50m.
Their plan is to use these funds to support emerging companies who share their vision for impacting systemic change that will benefit people, the planet and the balance sheets of their owners and investors.
Walsh Drouillard (47) hails originally from Palo Alto, California, the epicentre of the venture capital industry situated in the heart of Silicon Valley. When her father, a government lawyer, was transferred to Washington DC her education continued at the progressive Sidwell Friends School, the alma mater of Chelsea Clinton and the Obama daughters among many notable others. The school motto is "Eluceat omnibus lux" (let the light shine out from all) and the already socially conscious teenager eagerly embraced this ethos and it has helped inform her career and life choices ever since.
A degree in international studies at University of Washington, an MBA at UCLA she blended her early career between philanthropic and corporate roles. One of the early projects she is most proud of is her role as Executive Director with the ‘Freedom Writers Foundation’ an education ‘not for profit’ which originated in the book by Erin Gruwell and movie starring Hilary Swank, which helped and encouraged underprivileged students to continue with their schooling. Her road took her eventually to Europe, Paris first, then Amsterdam and then nine years ago, to her immense surprise, Dublin.
“The first year I'd ever been to Ireland was in 2013,” she recounts. “Vincent and I were there for business and we thought it was absolutely beautiful and charming but I didn't realize how small it was as I'd always grown up in big cities. It was a lovely place to visit but it's not a place I could have ever imagined living.”
Or so she thought! A few months later Vincent, a senior executive with the aircraft leasing company AerCap, was asked to join the gathering migration of executive talent within that industry to Dublin. He phoned his wife with the ‘good’ news: ‘guess what, we’ve an opportunity to move to Ireland and we need to be there by the summer.’ His wife’s initial reaction to the suggestion didn’t include many unrestrained jigs of joy.
“There was somebody else was telling me where to move,” she explains. “That was probably the hardest thing. It was just because I didn't feel like I had any agency. There were some tears, I'll be honest. I said ‘okay,’ but I didn't feel like I was captain of my ship.”
Was there any compensation in the prospect of returning that Walsh DNA back to the old sod?
Faye Walsh Drouillard is far too polite and much too mannerly to greet this question with a dismissive eye roll, but her response suggests that there is one in there, somewhere, trying very hard to get out.
“Biden's Ireland is very much indicative of a population of Irish Americans who just absolutely need to go back to what he always refers to as the ‘home country,’” she replies, pointedly. “What was interesting for my grandfather is that when he went back, he was sort of shocked because he didn't know that he would be going to find a ruined old cottage with dirt floors! As much as I was familiar with my Irish heritage, I was also familiar with my Scottish, Finnish and Jewish heritage too.”
Walsh Drouillard uses the term ‘obsession’ quite a bit when describing her interest level in raising capital for ‘impact investing,’ the buzzy new movement in funding, the intention of which is to generate positive and measurable social and environmental outcomes while returning a meaningful profit as well.
She has long had an involvement in investment communities and ‘angel’ funding for projects that were consistent with her environmental and societal ambitions. Projects that are “scalable and that solve a problem that matters," but when she sought like-minded people to join with in Ireland the level of risk aversion that she encountered here came as yet another major surprise.
“I think there was a lack of risk appetite here and not so much innovation on the funding model side.” She theorises on the cause of this "cross your fingers and hold your nose’’ attitude when the subjects of money and wealth comes up in her newly adopted country.
“The Irish Catholic ethos has infiltrated every corner of this society and has also had an impact on the way people think about money. Even talking about money in philanthropy is almost dirty or vulgar and I found that to be just shocking. I’m an American and we talk about everything! I think it contributed to sort of black and white culture around investing and risk taking. If we lose it all, or we blow it all, there's going to be a lot of shaming and blaming and guilt. So, I said to myself, ‘okay, maybe this is an opportunity to be a pioneer.’ Maybe I can build my own environment, my own business, my own model."
She started to research the Irish environmental and social governance (ESG) market, talked to friends, interviewed entrepreneurs, met the banking and funding institutions and gradually codified the funding model she wanted to help build and promote. She recounts how she scanned everywhere to try work out “who's doing what, where the money being allocated, who was allocating sources of funds and I realized there wasn't anything”.
This gap in the market was the seed that was to grow into WakeUp Capital.
“We have planetary boundaries,” she continues. “We're working with a population that is growing and that is out of control. But the solution for that it's not just going to be charity, philanthropy or a bunch of big tech or governments working alone. We really need to re-engineer our products and services and how we live on the planet.”
In the meantime, Walsh Drouillard had become involved with an investment syndicate in Dublin but grew increasingly impatient with the orthodoxy and conservatism in the criteria in building investment portfolios. She sensed a prevailing mood that people reasoned that doing good things for the planet and making money at the same time were mutually exclusive propositions.
There was plenty of focus on technology, ICT or biotech but little discussion on renewables, sustainability, climate change and social impact as profitable vehicles. It was time to evangelise her viewpoint more vocally as she explains.
“When I joined, I was kind of careful when to speak and then I started speaking quite a bit. ‘Why are we not seeing any deals focused on sustainability, climate or social impact?’ I asked. “This is the next biggest thing for investment, the biggest opportunities for investment in Europe, globally. And I was pretty sure that most of the people in the room didn't understand what I was talking about. Maybe they were thinking that it’s just that crazy American.”
But another of the attendees, Mark Peters, a German national who’d arrived in Ireland with Microsoft and later moved to Google, had listened and more importantly, had understood exactly what she was talking about. He approached Walsh Drouillard privately and asked her to go deeper into exactly what she had in mind.
“That was a real turning point, a lightbulb moment of sorts,” she recalls. “I told him that there is an incredible opportunity to pull together a financial structure where we're looking out for innovation, combating climate change, and also things related to social inequality. Mark's biggest concern was to make sure there is a deal flow and market opportunity. He wanted to be more convinced of it and he wanted data.”
An analyst was engaged to scrape the data Peters needed, to turn it upside down and inside out, and eventually a database of high-potential companies that hit their investment criteria emerged. It contained a list of three hundred prospects. They were up and running and hard questions now needed to be answered.
What was the best way to build their fund and how much of their own skin they were willing to risk in the game?
“I wanted to have a closed-ended fund where we would have an investment committee and committed capital and I also wanted to do it at scale,” she says. “I wasn't interested in doing a little deal here and there. We were going to start fundraising and then COVID hit and we thought: okay, we have no idea where the economy's going, so we said, let's do our own deals just to show what we're trying to achieve and that proved a great decision on our part.”
Peters and Walsh Drouillard financed some early deals from their personal assets both as a statement of belief in their enterprise and also to use as a calling card to attract ‘limited partners’ (LPs) from better-resourced funding establishments.
“If we were going to raise the quantum of funding that we had envisioned, it needed to come from serious LPs. It wasn't going to be coming from our friends and our family and our own money,” says Walsh Drouillard.
The companies they have already added to WakeUp Capital’s investment portfolio is a vote of confidence in the values expressed in their vision statements. Start-ups such as Magrowtec (pesticide reduction in the farming industry) Provenance (verification of sustainability claims by multinationals). Also included are ‘&Wider’ (authentication of statutory human rights compliance in global supply chains) and the emerging Irish software company, Inclusio, whose product helps complex organisations measure the levels of diversity and inclusiveness in their workplaces.
The diversity and imagination of those early investments provide yet another clue to Faye Walsh Drouillard. Her willingness to take risks in a still uncertain investment space. She has an unshakeable confidence that her strategy will pay off and that someday soon she will be breathing cleaner air in an unchanging climate while walking past pristine rivers — all the way to the bank.
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