RENEW Strategies

Building a Global Company During a Tough Time

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Joshua Weissburg
| November 26, 2008

To be sure, a recession poses plenty of challenges to a young company like RENEW. Many investors will hunker down and focus on businesses and business models with which they are comfortably familiar. But, as Daniel Roth of Wired writes Back to the Garage: How Economic Turmoil Breeds Innovation, the instinct to turn insular during economic difficulty leaves the playing field wide open for up-and-comers:

With the world’s economies apparently snowballing into a deep recession, it feels uncomfortably Pollyannish to see signs of hope. But for the bravest inventors and entrepreneurs, conditions are ideal to pounce on a business opportunity. In periods of economic turmoil, people are hungry and work cheap, and entrenched companies often concentrate on in-house cost-cutting instead of exploring new markets, which can explode with the next turn of the business cycle. When VCs from Foundation Capital met with their nervous investors recently, the partners advised them to stay the course rather than follow their peers into the bunkers. “Our strongest companies have the potential to be whales when the market opens up,” partner Paul Holland told the group. “This is the crucible that forges great companies.”

Between a Wall Street full of talented people tasked with selling junk and a development field searching for a way to kick its aid addiction, the RENEW team sees tremendous opportunity in linking investors searching for solid businesses with entrepreneurs searching for the capital and management expertise they need to grow their businesses.

Impact investing, currently regarded as a niche market, will not stay that way for long. As Western economies emerge bit by bit from economic turmoil, solid businesses in new markets are becoming viable candidates to enter the global economy as fast as RENEW builds the mechanisms to plug them in.