Issue:  Vol. 47 / No. 50 / 14 December 2017
 

Business Briefs: Startup allows LGBT clients to tailor their investments

NEWS


m.bajko@ebar.com

OpenInvest co-founder Josh Levin
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San Francisco-based startup OpenInvest is empowering LGBT investors to ensure their stock portfolios include only companies deemed to be supportive of LGBT rights.

The online investing site, which claims to be the world's first Socially Responsible Investing (SRI) platform for retail investors, makes it as easy as swiping left or right for its users to decide if they want to divest or invest with a certain company. And such decisions can now be made during a person's commute, as OpenInvest this week released its first mobile app for its clients to manage their accounts on their handheld devices.

The platform can also notify users about stockholder initiatives and proxy fights targeted at companies in their portfolio and allow them to take action. It will also send users a notice when a company takes an action they may not support and ask them if they want to divest from it.

"Your investments really are one of the most powerful ways to change the world," said Josh Levin, co-founder and chief strategy officer at OpenInvest, a Y Combinator and Andreessen-Horowitz -backed public benefit corporation. "You have a political vote and consumer choices, but your assets, if you have investments, really have an outsized impact. This weapon for most people is sitting on the shelf collecting dust. The goal with new technology is to get people into the game and make change in ways that never happened before."

Instead of lumping all of a client's investments into one fund, which makes it impossible to pick and choose individual companies to invest with, OpenInvest asks users to select from a dozen different themes, such as the environment or LGBT rights, that they care about it. Based on those choices, it will then suggest companies deemed supportive of those causes for a person to invest in.

In terms of gauging if a company is LGBT-friendly or not, OpenInvest uses the Corporate Equality Index released annually by the Human Rights Campaign, the national LGBT rights advocacy group. The 2017 CEI report ranked a record breaking 517 businesses with a top score of 100 percent and the coveted distinction of "Best Places to Work for LGBT Equality."

"We make it easier for people to hit a button and it instantly moves your money into a whole group of companies in the theme, like LGBT," said Levin, who is straight. "We have people coming back every day pulling out names or asking about companies. Sometimes we will email users with a list of companies and give them a prompt to pull out. When you pull companies in or out of your portfolio, it rebalances so it doesn't affect your investing."

OpenInvest charges a fee of 0.5 percent of the assets under management annually. It requires a minimum investment of $3,000 to open an account. While it does not report exact figures, Levin said the 1-year-old platform has signed up thousands of people and is managing millions of dollars.

"This is the first time passive investing performance and diversification follows the market. We are not trying to beat the market or come under the market; the performance follows the overall market," said Levin.

OpenInvest had a booth at Pride this year to talk to LGBT investors about how they could utilize their stock portfolios as a part of their activism. Levin told the Bay Area Reporter that business leaders are paying attention to such matters.

"Companies listen. If you speak up, they will hear it," he said. "These companies employ hundreds of thousands of people and impact hundreds of thousands of lives. It really makes a difference."

To learn more about OpenInvest, visit http://www.openinvest.co.

East Bay cities float public bank idea

Officials in Oakland, Berkeley, and Richmond are exploring the possibility of creating a public bank, an idea backed by several out East Bay leaders.

Dubbed the Public Bank of Oakland, the regional financial institution could be used to provide community benefit lending and handle cannabis business deposits. Such entities are currently solely cash-based and unable to open accounts with existing banks due to restrictive federal policies.

The concept is similar to the public bank operated by the state of North Dakota. City leaders in Los Angeles are also looking at forming their own public bank.

"Certainly, the medical cannabis community has been a very strong part of the coalition for this. They are ridiculously left out of banking, so that is one community a public bank can serve," said lesbian at-large Oakland City Councilwoman Rebecca Kaplan, who has spearheaded the proposal since last year.

In late September the Oakland City Council signed off on authorizing a public bank feasibility study and allocated $75,000 in funding for it. Berkeley's council then approved $25,000 to cover the remaining cost of the study, which is being conducted by consulting firm Global Investment Company .

The study should be finished by the end of the year and brought before Oakland's City Council for review in early 2018. In addition to having institutional depositors, the analysis will also look at if the bank would allow members of the public to also open accounts with it.

"Yes, we do think it is likely to have the bank take private deposits," said Kaplan. "The feasibility study is looking at the options for that. That is absolutely on the table."

Kaplan's fellow council member Abel Guillen , who identifies as two spirit, co-sponsored the resolution calling on the city to study the concept. In Berkeley, gay City Councilman Kriss Worthington urged his city to contribute financially to the report, while Alameda County officials and the city of Hayward have expressed interest in the idea.

"I don't think it is an absolute slam dunk and certain to happen. It is going to take a lot of research and exploration," said Worthington.

If it is deemed feasible, he suggested that any number of local entities, from governments and labor unions to environmental groups and others, could find it desirable to invest their funds with a public bank. The collaboration on the bank, he noted, would be similar to how East Bay cities have formed a regional clean power program set to launch next year.

"I think Berkeley doing it alone or Richmond doing it alone is extremely challenging because of our size. A partnership with Oakland, which is pretty big, might have enough critical mass that it might be viable," Worthington said of the public bank idea.

As for how the federal government might react, especially should the bank take deposits from marijuana businesses, Worthington said local officials would need to take that into account. The sale of marijuana for adult recreational use will become legal in 2018 in California, and it remains unclear what the reaction to such sales in the states that have legalized marijuana use will be by the Trump administration and Attorney General Jeff Sessions, who is adamantly opposed to the legalization of the drug.

"We may end up deciding to include medical cannabis dispensaries and not recreational ones," said Worthington. "We have to keep an open mind on that."

While a final decision on creating the bank will not be made until after leaders in the three cities review the consultants' report, Kaplan expressed optimism about seeing it come to fruition.

"I do think there is a very strong likelihood we will move forward, but of course no one will make that decision until we see the results of the feasibility study," she said. "I think the fact more cities are getting involved also increases the likelihood of success."

Honor Roll

The Fillmore Merchants Association of San Francisco raised $7,500 for the city's LGBT community center during its second annual Shop OUT Day on August 26. Twenty of the neighborhood's businesses donated 10 percent of their sales that Saturday to the upper Market Street facility, which reopened this spring after an extensive interior remodel.

The merchants group presented center officials with a check during an October 6 ceremony.

"The SF LGBT center is more than just a physical space. The center not only supports the entire spectrum of the LGBTQ community with its programs and services, but also represents the inclusiveness and tolerance which is the heart of San Francisco values," stated Vas Kiniris , owner of Zinc Details and executive director of the association. "We are proud to support the center's mission today and will continue work together to create a stronger community for future generations."

 

Got a tip on LGBT business news? Call Matthew S. Bajko at (415) 829-8836 or e-mail mailto:.






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