Three Corners Capital: Investors Resolve to Embrace Diversity at the Top

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A Cincinnati-based wealth management firm is building business based on values-driven criteria like diversity. Meanwhile, a business accelerator is launching startups that create social impact in the area, and they're led primarily by women and people of color.

Chris Flores, Cincinnati financial planner, ESG investing

Chris Flores founded Three Corners Capital in 2008, specializing in environmental, social, governance and other values-driven criteria through financial planning and investment management.

“Diverse leadership tends to improve benefits and workplace culture which, in turn, leads to higher engagement, more productivity, and less turnover,” Flores said. “All of these factors lead to better business performance.”

Investors are focusing on a key component of environmental, social and governance (ESG) issues: diverse leadership.

Studies like “Women: The X-Factor,” from Bank of America Merrill Lynch suggest that companies investing in women grow their investor base. Meanwhile, more gender diversity on the corporate board may better represent the company, identify with customers and bring diverse perspectives to the table.

It's also more than gender. The 2017 McKinsey and Company study, “Delivering through Diversity,” proved that businesses in the top quartile of ethnic and cultural diversity had better performance. There was a 35 percent likelihood of outperformance in 2014, and a 33 percent likelihood of outperformance on EBIT margin in 2017. Both studies show that the ethnic and cultural component was statistically significant.

Investing through a diversity lens is more than checking a box, according to Chris Flores, founder and lead planner at Three Corners Capital. Paying attention to ESG factors may deliver long-term business results. Some of these factors have shown to demonstrate a positive correlation to business outperformance.

“Diverse leadership tends to improve benefits and workplace culture which, in turn, leads to higher engagement, more productivity, and less turnover,” Flores said. “All of these factors lead to better business performance.”

Flores’ Cincinnati-based wealth management firm specializes in ESG investing with a focus on gender and racial equity as well as climate risk. The firm is a sponsor of a 12-week accelerator program at Flywheel Social Enterprise Hub, a capacity-building organization for startup companies with social impact. The Flywheel accelerator program, “Elevator,” connects startups to customers, talent and capital. Through mentorship, curriculum, and resources, social entrepreneurs can develop sustainable business models and prepare to seek capital investments as they launch and scale their companies.

Elevator’s fourth cohort is made up primarily of women and people of color, whose startups create social impact in the Greater Cincinnati region.

“What excites me about Elevator is that diverse teams create innovation because different people, with different experiences bring different perspectives to the table,” said Bill Tucker, executive director of Flywheel. “We’re making the investment case for diversity right here in Cincinnati.”

Earlier this year, Miami University’s John W. Altman Institute for Entrepreneurship, a founding partner of Flywheel, announced a new social impact fund in partnership with the organization. The fund is de-risking this new form of capital for startups exiting Elevator and leading the way in giving entrepreneurs greater access to startup capital.

“We’re excited to pilot this funding model with Flywheel,” said Brett Smith, founding director of the Center for Social Entrepreneurship at Miami University. “We believe it fills a critical gap for risk capital in the region’s impact investing sector.”

“We believe that social entrepreneurs can achieve greater impact with access to startup capital,” Tucker said. “Establishing alternative funding sources like revenue- based financing is an important first step.

Tucker believes that revenue-based financing not only fills startup’s needs for early stage capital, but it also provides investors with opportunities for a financial return while creating social impact.

Founded in 2008, Three Corners Capital specializes in environmental, social, governance and other values-driven criteria through financial planning and investment management. Flores and his team also work with clients to establish donor-advised funds and charitable trusts that create a triple bottom line—positively impacting people, the planet and profit. With individual and institutional clients across the U.S., the firm has approximately $130 million client assets under management. Chris Flores is a registered representative of Lincoln Financial Advisors Corp., a broker dealer (member SIPC) and a registered investment advisor. Three Corners Capital is a marketing name for business conducted through Lincoln Financial Advisors Corp.

Flywheel Cincinnati is a social enterprise hub that helps social entrepreneurs build and scale businesses that have both a financial return and social impact. The organization launched in 2011 and has helped 41 businesses through consulting, workshops, and funding.

Miami University’s John W. Altman Institute for Entrepreneurship has an internationally acclaimed program in social entrepreneurship. Social Impact Fund undergraduate students experience high-touch involvement in social enterprise development and capitalization processes. They also have the opportunity to recommend to faculty members which entrepreneurs should be awarded funding. This will help the Institute build a portfolio of investments in social ventures and allow for future investments in worthy social ventures.
CRN-2823650-111319

Three Corners Capital is not an affiliate of Lincoln Financial Advisors Corp.

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