🎙️ Brian Trelstad — HBS Professor and Partner at Bridges on Service-Based Impact Investing

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Happy New Year folks! Despite the craziness with Omicron, I hope you had time to relax with family and friends alike. After a long hiatus, we are committing to connect with more DWDG entrepreneurs and investors in the new year!

To kick this year off, we will recap our latest podcast where we chatted with Brian Trelstad, an HBS professor and Managing Partner at Bridges Fund Managementfocused on service-based impact investments. We explored the ways in which impact investors enable service-focused portfolio companies across multiple fields.

As we’ve done in the past, we’ll summarize some of the key points below and link to the part of the podcast that is most relevant. If you want to listen to the full episode click below and enjoy!


[1:05] After graduating from Stanford GSB, Brian Trelstad became the CFO and eventually the CIO of Acumen Fund, a non-profit founded by CEO Jacqueline Novogratz. [Brian’s Bio]

  • In 2011, Brian decided to build out a similar impact imperative but in the US. Bridges Fund reached out because they had the same goal as Brian.
  • In 2014, Brian started the Bridges Sustainable Growth Fund — a commercial fund within Bridges — to invest in impact service-based businesses in the US market.

Why a Commercial Fund over a Nonprofit?

[4:37] Impact investment in private capital markets that provide comparable returns with quantifiable impact metrics are a win-win and this is possible in today’s market.

  • Quantifiable metrics for impact (e.g. closing the racial and socioeconomic wealth gap, addressing climate change) are still not well-defined, though it has been shown over the last decade that the right incentives attracts more money than a purely nonprofit grant-based funding approach [Brian’s article on the Impact Investing vs nonprofits]

Bridges Fund Thesis & Metrics

[6:56] Thesis: Invest in founder-owners of business that operate in the healthcare, education, and sustainability space looking for an aligned partner to help them grow.

  • Current State: There are many impact investors at the early stage market and lots of late stage private equity investors getting into the impact investment space.
  • Unique Differentiator: Bridges focuses in the lower-middle market with businesses between $10–30M in revenue.
  • Impact Metrics: Performance indicators are identified in the diligence phase. These vary across businesses though the goal is to identify if the business is doing one of the 3: (1) contributing to a solution, (2) helping stakeholders (e.g. B-corp benchmark) or (3) avoiding harm. Bridges is focused on (1) and will also back businesses doing only (2) but avoids investments that purely are doing (3). Example: Sunrise Treatment Centers is a center to help those with opioid addiction get clean and fits all of (1), (2), and (3). Bridges uses patient census, quality of care, tenure of the patient as a proxy for a score card indicating how well Sunrise is doing on impact.

Maintaining Impact Through the Investment

[12:07] Generally if profit is tied to impact there isn’t anything special we have to do to incentivize the company to continue, but some special cases exist.

  • Not all impact investors are the same-those looking for market rate returns like and Elevar Equity, and non-profits looking to catalyze the market like .
  • Example: Altius Dental is a dental practice for Medicaid patients — as they serve more patients their impact and profits grow. As investors it is important to keep them on track by keeping them honest.

DWDG Portfolio Companies

[16:21] Brian gives a few examples of Doing Well by Doing Good companies they have invested in and how they got connected.

  • Sunrise Treatment Centers — opioid addiction center to treat patients focused on a unique combination of norepinephrine treatment and counseling.
  • > How they invested? Sunrise was selling and ran a process to attract private equity investors, and Bridges initially lost. But it didn’t go through and a few months later serendipitously they met again and hit it off because of mission alignment
  • James River Home Health and Hospice — founded by a repeat entrepreneur focused on providing quality care for elderly patients
  • > How they invested? Introduced by Acumen Fund and the founders and Bridges hit it off once they identified their mission-alignment around patient focus.

Doing Good & Doing Well

[21:16] Bridges focuses on service-based companies and first looks at the impact the company’s service has on an underserved population — doing good. Next, they consider the ability of the company to profitably deliver that service — i.e. how they do well. Ongoing impact and commercial diligence is done for these businesses across the lifetime of the investment.

  • Example: Bridges invested in Altius Dental that serves ~40 rural communities in Texas with underserved and largely Medicaid patients because they are delivering impact via their service and are able to do so profitably. A private equity company looking only interested in financial metrics may look at the same investment and may not be willing to take that risk due to reimbursement risk, etc.
  • The commercial lens is the same as private equity except with a bit more risk tolerance given the impact imperative of the business.

Conflict between Shareholder Value & Doing Good?

[25:17] Brian does not see a difference in shareholder value and impact in their investments but believes that given the impact imperative this does affect the profit margins and thus diminishes shareholder value in the short-term but has long-term value creation

  • Key Insight: Impact investment might forego short-term gains for long-term value, whereas traditional investments may have better short-term gains.

Advice for Listeners

[28:30] Brian shared advice and non-advice for three groups: those looking to work for a DWDG company, found a DWDG company, or invest in a DWDG company

  • Work: Play to your functional strengths and move horizontally within the same functional role to transition companies. Change just one attribute of your job at a time to leverage your previous experiences.
  • Found: Brian believes that there is no advice needed. If you believe in something and know how to execute go do it! Mission-driven founders will do what they do.
  • Invest: Determine your return expectations, thesis, timeline and goals. E.g. is it purely risk capital, for your retirement, or are you focused on making a change at any cost?

Thanks for listening! If you liked what you heard and want to share this post with a friend forward this email or click the button below to share. Share

And if you want to share the podcast directly here’s a link to the podcast again for reference

Have a a great 2022! And stay tuned for our next episode coming soon :)

👋🏽 Anand

Originally published at https://dwdg.substack.com on January 9, 2022.



Building sustainable businesses is hard. Doing it while driving societal change is even harder. Here we highlight the companies striking that balance.

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Anand Sampat

Anand Sampat

Builder. Thinker. Musician. Subscribe to my newsletter @ http://dwdg.substack.com @datmoAI (acq by @oneconcerninc)