The concept behind Howard County's business accelerator, the Conscious Venture Lab, seems simple enough: companies with good consciences are better for the communities in which they do business.
Understanding the premise makes it plain to see why the county government's Economic Development Authority partners with the lab, which is housed at the authority's headquarters in Columbia. By supporting startups embracing a do-gooder mentality – conscious capitalism, as it is known, has been employed by companies such as Whole Foods, Trader Joe's and Southwest Airlines – the county's business community becomes a better place.
It's seems like a good deal for the community, but for some the question remains: can businesses survive using this model? According to Jeff Cherry, the lab's executive director and a former hedge fund manager, they can, and it's because of investors.
"I am more strident about this than most people are. ... the people who don't believe this is going to be more successful from an investment standpoint, simply haven't done their homework yet. I truly believe that," Cherry said this week at the lab's first demo day at Maple Lawn. An inaugural class of startups presented their businesses to potential investors at the event.
Cherry contends that conscious businesses aren't only viable, they are more sustainable and successful than a business that's only about the bottom line.
Jennifer Hartman, a senior vice president and portfolio manager at Morgan Stanley, said investors, especially millennials, want to invest in companies with a conscience.
"You have more and more people interested in how [their] money is invested and doing good and what kinds of things are important to the companies [they are] investing in," she said. "This is the value set that investors of today and the future are going to place more and more importance on.
"This is the beginning of new companies that have that frame of mind."
She added that Morgan Stanley's interest is organic: "I feel like from the financial services business, if you don't have that language and vocabulary, that money is going elsewhere," she said.
This isn't news to Ollen Douglass, chief financial officer at the Motley Fool. His company was founded on the principle that people want to invest in companies that care.
"We believe a sustainable process. ... is a model that has stakeholder value at the core of it," Douglass said. "As a company, the Motley Fool has adopted the approach of going into partnerships that are mutually beneficial."
The Conscious Venture Lab's first class included five businesses and one nonprofit.
Shenami, based in Virginia, is a web-based, one-stop networking service for businesswomen, an underserved market.
Spend Consciously, from Washington, has created an app that aims to be "a reinvention of the nutritional facts" label for consumers. The app, called BuyPartisan, allows consumers to see where their purchases are going, specifically what political party is affiliated with the company.
Ellicott City-based Shea Radiance is a body care and lotion company that sells products made with shea butter – most competitors use a refined lotion, according to the Conscious Venture Lab.
The fifth business is Columbia-based Self Spark, a company that teaches a variety of "life hacks," which are shortcuts to everyday tasks.
In addition to businesses, the Conscious Venture Lab class includes one nonprofit: Making Change, in Columbia, which provides financial education and coaching for those dealing with the stresses of balancing a home budget.
As one class of businesses graduates, Cherry is prepping for the next crop. He said the group has received 80 applications, and is in the process of reviewing them. He said applications come from everywhere because there are only a few other accelerators practicing conscious capitalism in the country.
Self Spark, for example, relocated from Seattle to Columbia to take part in the Conscious Venture Lab. He added that it's not all about the money, either – each participant gets $25,000 to $50,000 in seed money.
"We are getting applications from companies where $25,000 or $50,000 is not going to make that big of a financial difference," he said. "But they are interested in what we are trying to do."
Larry Twele, EDA's president and CEO, said the lab "made a good match" with the values and ethics of the county.
"[Cherry] was looking to start this somewhere, and we felt it made sense because of Howard County, Columbia and the history," he said, referencing Columbia founder James Rouse's goal to build a model community.
"It was an interesting way of blending the DNA of Howard County with a better way of creating companies."