Eighteen months ago I posited the emergence of a different flavor of global capitalism here in the Pacific Northwest, which I described as “big tent” capitalism, subsequently amended to the more region-specific “Cascadian Capitalism“. My assertion was — and is — that:
Seattle is emerging as a global leader in fusing the growth-oriented culture of techno-capitalism with a deep and broad commitment to social justice and social mobility.
Much has changed since I first published that post, including the passage of Seattle’s $15 minimum wage ordinance (sparking the adoption of a similar law in Los Angeles and related efforts in New York, Chicago, San Francisco and other major American cities); the addition of a declared socialist to Seattle’s nine-member City Council (swapping a committed environmentalist for a Councilmember with an even more liberal and redistributive social agenda); and the creation of a city-funded Universal Preschool offering with nearly 70% of Seattle voters in support.
So, we’ve established that we’re willing to take action locally to help more Pacific Northwesterners participate in the region’s success. But what about ensuring that there’s actually money available to pay for all those programs?
Progressives often take business success — and profits — for granted, but anyone who’s ever built a company from scratch knows how hard it is to start, scale and remain competitive in our increasingly global and interconnected economy. We’ve been lucky to have some of the world’s most successful companies founded here in the past, but even great companies don’t stay great forever, and we need to constantly refresh our pool of successful and growing employers here if we want to have the resources to make good on our promise of a truly inclusive and broad-based prosperity.
Which is why I was so excited to meet the team at Canopy, a new Pacific Northwest organization dedicated to that work. In typical Northwest fashion, Canopy is a neither a traditional for-profit company, nor a non-profit, but a “for-benefit LLC” whose mission is to increase the flow of investment capital to build strong companies and create high-quality jobs here in Cascadia. Canopy itself is funded by two large family foundations created as a result of entrepreneurial success — The Russell Family Foundation and the Meyer Memorial Trust — and whose investment teams understand viscerally that great companies and well-paying jobs are the bedrock on which inclusive prosperity is built. Best of all, Canopy isn’t just trying to solve this problem here in Cascadia, but is explicitly committed to sharing best practices that can be used in other regions around the country and around the world.
But wait, I can hear some of you thinking, why does the highly efficient and self-regulating capitalist economy need some non-profit messing around in this work; can’t we capitalists take care of ourselves?
Yes, and no. As I’ve written (at great length) before, our modern capital markets work very well above a certain scale, and within the traditional “money center” geographies (especially New York and Silicon Valley). But for “sub-scale” (meaning very early-stage) innovation, in locations other than these two national money centers, these markets are all kind of broken. It’s not that there isn’t a ton of available capital in those regions with active intent to seek return and drive social impact in the form of local job creation. But matching good early-stage investments with good investors requires market-clearing mechanisms that either don’t exist, or don’t have sufficient capacity to reliably clear the market.
Canopy is a new approach to fixing broken innovation markets, bridging the many gaps that currently sit between billions of dollars of impact investing capacity and the early-stage entrepreneurs and fund managers who can effectively deploy that capital to drive growth. Like so many of our region’s best ideas, Canopy is neither a pure creature of the market, nor a platform for charitable giving; it is a hybrid that channels powerful market forces to achieve social aims. It’s weird and it’s awesome, just like Cascadia itself.