Patagonia launches ‘$20 Million & Change’ start-up fund
Patagonia’s Latest Product: an In-House Venture Fund
Patagonia, a company known for its progressive environmental and social practices, is launching an in-house venture fund. But unlike traditional corporate funds, many of which simply aim to reduce risk by diversifying company assets, Patagonia’s fund will invest in startups that try to make a positive impact in five areas: clothing, food, water, energy, and waste.
“How [the fund] came to be, really, was we’ve had a great five years—we basically doubled the company,” explains Rose Marcario, a former chief operating officer and chief financial officer of Patagonia who is now chief executive of Patagonia’s newly announced holding company, Patagonia Works, and also head of the fund. “We have cash on the balance sheets, and unlike a lot of other companies that sort of hoard their cash, Yvon and I started talking about what we could do that might serve the causes that we care about.”
By “Yvon,” Marcario means Yvon Chouinard, the 74-year-old environmentalist and former world-class rock climber who founded Patagonia 40 years ago. Since then, Chouinard has focused the highly profitable business of combating environmental destruction as well as promoting positive labor practices. (Patagonia employees enjoy “flex-time” hours so they can, say, go out surfing or skiing when conditions are ideal, as long their work gets done on time.)
Patagonia’s fund is named $20 Million & Change, “a nod to the fact that $20 million is the starting amount with the ability to grow and, more importantly, with the ability to ‘change’ the way business is done,” writes Chouinard in a letter announcing the fund’s commencement.
The company has not yet identified startups to invest in, but Marcario says most funding will be in the $500,000 to $5 million range and will include equity investments and minority and majority partnerships, as well as joint ventures.