September 19, 2017

3×5 Partners’ Annual Meeting Brings to Life “Investing in What the World Needs”

Over the last two decades, I have had the opportunity to work for several large financial institutions in Boston and Portland. Along the way, I have attended more investment meetings than I could possibly count – on everything from corporate bond funds to complicated variable annuity income riders – and heard hundreds of investment managers wax eloquently about why their investment tool was better than the next firm’s offering. At this stage of my career, I do not expect to walk out of these meetings feeling inspired about some new investment strategy, let alone the future of our little planet. This week’s 3×5 Partners’ Annual Meeting did just that, and then some.

3×5 Partners is a growth-oriented venture capital firm that primarily invests in innovations in life sciences and resource-driven sectors. Their motto is “We Invest in What the World Needs,” and the Annual Partners Meeting is an opportunity for investors to hear straight from the managers running the businesses in which 3×5 has invested. 

3×5’s commitment to investing in what the world needs was front and center as the CEOs told their stories. We heard from one medical company that is building blood-protein detectors to better fight cancer, another that is developing cutting-edge heart stents looking to treat the most dangerous of heart conditions, and a third that produces a high-flow nasal cannula product that is helping premature babies take their first breaths in NICUs across the country, including many right here in Portland. The two presentations that I cannot stop thinking about, however, have nothing to do with the medical field and everything to do with providing two things the world needs most: clean water and a more efficient way to incorporate renewable energy into our existing electrical grid.

For many of the world’s poorest inhabitants, having a clean, safe source of drinkable water is an unimaginable luxury. Many of these people, especially women, spend most of their day travelling to and from their water supply, often walking many miles with heavy loads, day after day. Zero Mass Water has decided to do something about this, and what they have done is amazing: they built a machine (about the size of a solar panel) that changes water vapor in the air into drinkable water, and does it using only solar power. You read that right. In fact, as you read this blog post, there are hundreds of school children in Mexico drinking water that literally came to them out of thin air. If you are reading this during non-school hours, these same devices are supplying clean drinkable water to the community, as they are always running, even when school is out. That is the sort of return on investment that cannot be measured in dollars or percentages (although they are tracking those too, of course).

The team at Smart Wires is also measuring something interesting and doing something amazing with them: electrons. Our existing grid was built haphazardly, pieced together by hundreds of utility companies across the U.S. over time, and is not built to suit intermittent power sources like solar and wind.  Smart Wires designs and manufactures power flow control technology that acts a bit like a traffic cop, increasing or decreasing line reactance from overloaded lines and onto underutilized corridors within the grid. It was encouraging to listen to their CEO Gregg Rotenberg talk about the excitement his company has generated (and the orders they have received) around their products, as each order increases the number of “green electrons” powering devices around the world.

The 3×5 Partners’ Annual Meeting featured an amazing collection of CEOs seeking to generate returns measured in both dollars and in lives impacted. Each CEO spoke frankly about the challenges ahead and their plans for dealing with those challenges, each spoke about their successes, and each owned up to their failures. Above all else, each spoke with conviction about making the world a better place and building successful businesses in the process.

 

Note: Tony Arnerich owns an interest in both Arnerich Massena and 3×5 Partners. For additional information, please see our current Form ADV Part 2A, which can be accessed at www.am-a.com.

 

Zero Mass Water device

Smart Wires device