Social Impact Investors: How Greg Ho of Spring Mountain Capital Is Helping To Empower Geographies That Have Been Historically Overlooked
Making a positive impact on the environment or society is not just a moral obligation; it also brings immense personal satisfaction and fulfillment. When you work towards a cause bigger than yourself, you not only contribute to a better world but also grow as an individual. Your actions can inspire others and create a ripple effect of positive change. Plus, you’ll often find that working on these issues connects you with like-minded people and opens up new opportunities you might not have considered before.
As a part of our series about “Social Impact Investors”, I had the pleasure of interviewing Greg Ho.
Greg Ho is the President of Spring Mountain Capital ($1.8B AUM) and one of its founding partners, as well as the head of the Social Impact Group. Prior to joining Spring Mountain Capital in 2001, Greg was a Principal and Chief Financial Officer of McKinsey. During his 16 years with McKinsey, he led the financial and tax planning for the firm and led McKinsey’s expansion into over 30 new countries. Greg also was a member of the firm’s Investment Committee and a Trustee of McKinsey’s Profit-Sharing Retirement Plan. In these capacities, he oversaw the identification, evaluation, and selection of traditional and alternative asset managers and investments for over $1 billion of partner and employee assets and, with several other McKinsey partners, co-founded the McKinsey Investment Office. After leaving McKinsey in 1998 and prior to joining SMC, Greg was a private investor and consultant to several prominent NYC financial services companies and technology start-ups. Prior to joining McKinsey, he was associated with the law firm of Donovan Leisure Newton & Irvine.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
I started my professional career as a tax associate in a large NYC law firm. From there, I was recruited by McKinsey & Company to be their first in-house legal counsel. Instead of working on general corporate matters, my responsibilities were to focus on the firm’s global finance and planning, and I therefore spent most of my time working on McKinsey’s expansion into 30+ new international markets. This experience provided me with a global perspective and an understanding of the importance of appreciating and incorporating local needs, values and customs when establishing a presence in a new location. While at McKinsey, I also co-founded the McKinsey Investment Office with some other partners of the firm, and subsequently became McKinsey’s global CFO. At age 45, I felt ready to enter a new chapter of my life. Led by my interest in alternative asset investing, I co-founded Spring Mountain Capital, LP (“SMC”) with my partner John L. “Launny” Steffens in 2001, and, more recently, SMC’s Social Impact investment group, the West Harlem Innovation Network (“WHIN”) in 2021. I realized that through impact investing, I could leverage my broad financial experience to support underserved communities and foster innovation in historically overlooked areas.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
The tipping point in my career came when Ron Daniel, the head of McKinsey, asked me to be a member of the partner committee that would recommend changes to the firm’s U.S.-centric partner compensation structure to make it globally equitable to our growing group of non-U.S. partners. This put me in conversations with all U.S.-side senior partners and every non-U.S. partner throughout the world, which enabled me to gain deep insights on a large range of issues, and human nature and motivation, more generally. This experience planted the seed for my future work with WHIN.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
While at McKinsey, I benefited from having a host of brilliant and respectable mentors. One that I’ll highlight was Marvin Bower, who led McKinsey for many years. Marvin’s way of mentoring was very concise. He basically did two things that I have continued to carry forward throughout my career. First, he constantly reminded me that “if you do the right thing, everything else will follow.” Second, and perhaps more importantly, he lived by that principle. I have adopted this principle by focusing my efforts on social impact investing, seeking to apply my background and expertise to help drive positive social change.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
Be introspective, humble, and endlessly curious. Never assume that you have figured it all out and always continue to learn. I read voraciously, including the news, to scientific research studies, academic journals and the occasional fiction novel. Be generous with your time, have an open mind and a generous, inquisitive spirit.
You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?
At SMC, we are committed to investing in projects that drive positive social impact. One of our key initiatives is WHIN, which aims to launch scalable businesses and create high-paying jobs in Harlem and other geographies that have been historically overlooked by traditional private markets. We focus on sectors such as healthcare, education, and technology that address critical societal needs. Additionally, we support educational ventures that provide access to quality education and initiatives that bridge the digital divide. Looking ahead, we plan to expand our impact investing efforts to support more innovative solutions that promote social equity and environmental sustainability.
What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing? Can you share the story with us?
We have “aha” moments here all the time. One of the key ones that comes to mind occurred when I read an article in 2019 on healthcare outcomes and unique disease sets that disproportionately impact communities of color in the United States. Given my focus on Life Science investing, I had long been aware of these disparities and attempts to solve for them. However, I realized that through our strategy, which involves building early-stage companies from the ground up, we could ensure that innovative healthcare companies directly involve members of historically underrepresented minority populations in their development, management, and ownership.
Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?
I’d have to say that the most rewarding investment I’ve made has been the founding of SMC with my partner Launny Steffens back in 2001. We first formed SMC to be a full service investment advisory firm, rooted in the principles we both forged at our previous positions. Since 2001, we’ve grown and adapted with the times to focus on different aspects of the alternatives space. Most recently, we’ve focused more on direct growth capital and early-stage social impact investing. I believe our trajectory over time and our current strategies reflect our team’s collective knowledge, varied experiences and expertise, and current trends in the private investing landscape.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
We led an investment in a startup company at a $2 million pre-money valuation, which eventually sold for $400+ million to a large tech company after 32 months. A few years later, we saw a similar opportunity with another technology company and invested at a $2.25M pre-money valuation through its $600 million initial public offering. However, the wider market experienced serious turmoil at that time and we eventually sold the company to another strategic acquirer at a significant mark-down. Lesson learned: all the diligence in the world, even preparedness for downside risk, cannot predict when the wider market might move away from you.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
To be candid, there is not an investment that I truly regret turning down. We follow a risk-adjusted approach to investing, which is geared towards avoiding big mistakes versus trying to capture every great deal. Obviously, we have seen and passed on some impressive companies over the years, and we assess and reassess our decision making process constantly to actively learn from each investment decision. However, I truly have no regrets, and am proud of our deliberate and risk-adjusted approach to asset allocation.
What are your “5 things I need to see before making a VC investment” and why?
Team: The founding / management teams are the essential “it factor” for any company. The ability of business leaders to steward their business, surround themselves with smarter people, and deal with adversity is a crucial factor in our investment process.
Timing: We focus on “big waves” at our firm. We have to believe that a specific investment has the ability to time their business strategy to meet the moment..
Impact: At WHIN, we focus on businesses that are developing innovative and impactful solutions to the disproportionate health, educational, and socioeconomic outcomes of underrepresented communities in the United States. Accordingly, our target profile centers the potential impact of a particular product or solution on its ability to solve for these problems.
Product Market Fit: We generally require a certain level of market validation of a specific company before we contemplate making an investment. While we are comfortable with early-stage investing, we expect to see a certain level of adoption or confirmation from the target market prior to proceeding.
Founder Fund Fit: Serious alignment between the management team of a company and our own social impact goals is crucial to our decision to invest. If founders are simply looking for a silent partner or a check, they are better suited for other investors. We are actively involved in our portfolio companies, and therefore require a high degree of transparency, honesty, and trust prior to making an investment.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
I would inspire a movement focused on democratizing access to quality education and healthcare. These are fundamental rights that can drastically change lives and help lift communities out of poverty. By leveraging technology and innovative solutions, we can break down barriers and make education and healthcare accessible to everyone, regardless of socio-economic status. This movement would also focus on sustainable practices and fair opportunities for all, ensuring that everyone benefits from progress in education and healthcare. By partnering and collaborating with local communities, and businesses, we can create a strong support system that helps individuals and encourages long-term growth and development.
If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?
Making a positive impact on the environment or society is not just a moral obligation; it also brings immense personal satisfaction and fulfillment. When you work towards a cause bigger than yourself, you not only contribute to a better world but also grow as an individual. Your actions can inspire others and create a ripple effect of positive change. Plus, you’ll often find that working on these issues connects you with like-minded people and opens up new opportunities you might not have considered before.
Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this.
Michael Milken. I recently read his book “Faster Cures,” and was struck by our similar philosophies regarding healthcare investing and catalyzing innovation. I am sure we would have a very engaging conversation.
How can our readers follow you online?
Spring Mountain Capital Website
Thank you so much for this. This was very inspirational, and we wish you only continued success!
