Note: This article is the seventh in a series of interviews highlighting the work of interesting impact investors.
Juan Thurman is the Co-Founder and Managing General Partner of the SWAN Impact Fund, an early stage fund focused on health tech and clean tech startups. Juan is an experienced startup investor, board member and a sales advisor, focused on helping early stage companies get to the next level. His focus is on working with healthtech, cleantech and social impact oriented companies. Juan is also a Director of sister organization the SWAN Impact Network where he focuses on SWAN’s long-term strategy. He is currently also serving as a Venture Partner at NextGen Venture Partners, and has held executive sales positions at Retreaver and Twilio. Before becoming an investor, Juan contributed in sales and technical areas at seven other companies, including both start-up companies and IBM.
Juan, thank you for participating. How long have you been an impact investor and how did you get started? What would you say are the main ways the impact investing world changed during the time you have been involved?
I started Angel investing in 2016. At first, I was focusing on traditional early stage software startups. A few months after I started, Bob Bridge, the founder of SWAN Impact Network (angel group focused on impact investing), invited me to their second pitch night. After listening to 3 passionate founders pitch their impact startups I was hooked. I made my first impact investment and joined the network as one of its officers.
Looking ahead in early stage impact investing, what are you most excited about? What keeps you up at night?
When we started engaging with investors in 2016 they assumed impact investing was concessionary. Fortunately, investors have become more educated and now know you can make market or better returns investing in impact startups.
The thing I am most excited about is working with early stage founders, helping them get traction and seeing them deliver impact in their chosen markets. Missing out on good deals is what keeps me up at night.
Do you have a thesis or focus on any particular type of founder, company or industry?
Our thesis is that the two largest problems facing people in the US as well as globally, are climate change and accessibility, affordability and efficacy of healthcare. We believe these challenges give brazen founders the opportunity to create companies and solutions that not only address these problems but also create substantial financial returns. We are also very interested in supporting underrepresented founders. While we don’t have a target number, we are intentional in our efforts to find, support and ultimately fund these founders.
How did you prioritize which ESG issues you were going to focus on?
From an ESG perspective, we focus on environmental issues. We feel it is the most pressing problem and critical to address. Additionally, we are big believers that you cannot change what you cannot measure and there are many solid frameworks/methodologies for measuring environmental impact.
How do you measure the impact of your investing and the portfolio companies you work with? Do you use company-specific and/or portfolio-wide KPIs?
Impact measurement is still a nascent area. We will negotiate with our portfolio companies to decide on mutually acceptable KPIs. The companies know best the area of impact they are working on and what “success” looks like. As long as we both agree on the nature of the KPIs, the format and the frequency of reporting then we will move forward. Once our portfolio is in place, we will reassess and see if it makes sense for the fund to report out aggregate fund level KPIs.
Do you expect market rate returns, or are you willing to accept concessionary returns for especially worthy companies?
We expect market rate returns.
Do you do straight equity investments only, or do you utilize other early stage deal structures such as lending, revenue-based financing or grant-making?
We only do straight equity investments.
Where does your best deal flow come from, and do you ever feel frustrated or limited in terms of deal flow by having a specific impact focus?
We are lucky to have great deal flow from many different sources. We have three primary sources: current portfolio companies and applicants to our sister angel network (SWAN Impact Network); large and growing partner ecosystem of accelerators, incubators, VC firms, universities and other angel networks; and personal relationships built by our General Partners and Venture Partners.
What would you say makes you good at what you do?
My co-founder and I have a lot of experience as operators, both in very successful ventures and some that have failed. We have seen many different companies succeed and fail in different markets and conditions. Also, we have significant experience as early stage investors. We leverage that experience to find, coach, empathize and support founders who are trying to make the world better while building a valuable business.
If you could give entrepreneurs one piece of advice about working with you, what would it be?
Know your unit economics, have a deep understanding of the problem you are solving and the best routes to market to reach your customers.
Stay tuned for additional interviews as The Seraf Compass continues to profile interesting impact investors, small funds, women investors, and family offices.
