New startup challenge combines a Silicon Valley mindset with Catholic social teachings
Posted July 9
Pope Francis has a notable new ally in his efforts to protect the environment: a team of investors mixing a Silicon Valley mindset with concern for God's creation.
The Laudato Si Startup Challenge, launched earlier this year, offers money and mentorship to entrepreneurs working to make the world a better place. Businesses that advance through the application and interview stages will soon relocate to Rome for an eight-week, intensive accelerator program, which begins July 13.
The startup challenge "focuses on raising awareness about the importance of investing in companies that are aiming for huge profits while also caring about doing good in the world," wrote Stephen Forte, one of the program's leaders, in a May blog post.
He explained that the Laudato Si Challenge responds to the pope's encyclical of the same name, as well as the Roman Catholic leader's ongoing critique of businesses that pursue profits at any cost.
"As a global citizen with young children, I'm called to respond to His Holiness Pope Francis' challenge," Forte said.
The Laudato Si Challenge targets profitable, eco-friendly young businesses. Applicants did not need to be Catholic and could be based anywhere in the world. The main requirement was that they were still at the beginning of their business development, meaning that they'd raised less than $2 million in funding from other investors.
Like other startup programs, this challenge creates a partnership between entrepreneurs who need help taking their creative ideas to the next level and investors looking to get in on the ground level of the next big tech industry success story.
Startups that make it to the Rome accelerator receive $100,000 and one-on-one mentorship in exchange for a 6 to 8 percent equity investment in their business, according to Laudato Si's website.
"Laudato Si functions like a typical accelerator program with capital investment, equity, mentorship and guidance," said program director Paul Orlando to Fast Company. "The twist is that all of the companies that are selected fit in one way or another into a number of big global problem areas that the pope identified in his encyclical."
In the original Laudato Si, with the subtitle "On Care for Our Common Home," the pope explores what the Catholic faith has to say about contemporary environmental challenges. He fills more than 175 pages with summaries of climate science, spiritual reflections and directives for people in power.
"Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life," he wrote. Laudato Si was published in June 2015.
The pope took up this refrain again a few months ago in a surprise TED Talk, which aired during a conference on technology and innovation.
"How wonderful would it be if the growth of scientific and technological innovation would come along with more equality and social inclusion," he said. "How wonderful would it be if solidarity — this beautiful and, at times, inconvenient word — were not simply reduced to social work and become, instead, the default attitude in political, economic and scientific choices."
Forte and other challenge leaders agree that the technology industry could be doing more to solve water and food shortages, advance sustainable energy sources and address climate change.
However, traditional startup culture often unnecessarily punishes people who wed their moral concerns with a pursuit of profits, Forte wrote.
"Got an awesome for-profit startup idea? You'll get funded. What about a great mission-driven idea? You'll get funded, too. How about a for-profit, mission-driven idea? Not so fast," he said.
Program leaders list Pope Francis and Cardinal Peter Turkson as sources of inspiration on their website. Cardinal Turkson, a representative of the Catholic Church to the United Nations, spoke about the value of the challenge in early June.
"The goal of this project is to highlight the importance of environmental concerns in making business decisions, planning projects and influencing law and policy. The Holy See is committed to continuing and strengthening these efforts," he said.
The Vatican has hosted two impact investing conferences since 2015, organizing discussions of how to support meaningful projects while also getting a return on your investment. These events are part of a broader surge in interest for impact investing, which appeals to people who want a more moral way to share their wealth, as the Financial Times reported last year.
"Impact investments are made with the aim of generating not just a financial return but also a measurable social or environmental one," the article noted.
The limitation on this type of investment is that it is sometimes hard to measure the long-term results, beyond calculating monetary gains. "How can someone quantify the positive effects of their money?" the Financial Times article asked.
Laudato Si Challenge leaders offered no specific details on how they will estimate the impact of their program, noting that the first step is simply giving valuable startup ventures the time and space to flourish.
After the eight-week accelerator in Rome, Laudato Si Challenge participants will return to their home bases for continuing research and development. In December, they will reconvene in Vatican City, the headquarters of the Roman Catholic Church, to celebrate progress and court more investors.
"What does success look like with respect to this particular endeavor? Incubating several mission-driven companies that … eventually provide a handsome return," Forte said.
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