Prashan Paramanathan: Earlier this year, Paul Graham wrote his (somewhat infamous) piece on startups and inequality, essentially arguing that you can’t eliminate inequity if you want startups. What are your thoughts? Do you think the startup ecosystem we’ve created increases inequality or do you see startups as a leveller?

Michael Trail: No startups = no growth and while the fruits might be somewhat unequally distributed, I am a big believer that an economic infrastructure has to include a vibrant startup sector. I am increasingly seeing startup gurus (like you Prash ;-) involved in startups where they bring ethics, integrity and a commitment to fair growth and opportunities as part of the DNA of their organisations.

Rick Baker: How do you feel about mixing the social motive with the profit motive? Can we build valuable wealth creating businesses with a social mission or is there an inevitable conflict between the two?

Michael: My strong view is that we can implement ‘business discipline for social purpose’ in large scale social enterprises — as I think Goodstart has demonstrated in its five-year history. The challenge is to replicate that across other areas of the mainstream economy, and particularly in areas where there is a government imperative to provide funding (think aged care, health, education). There is, of course, some conflict between the two but this can be managed — as we have at Goodstart — with care and clarity around business and social purpose objectives and being clear about the nexus between the two. Having great people (at board and senior management level) with a depth of experience across these domains is critical in getting this to work.

Prashan Paramanathan: Do you think that the best way to grow the Impact Investment industry is to have it as separate funds (like it is now) or to have mainstream investment funds make impact investments?

Michael: I have a strong view that we need mainstream super funds involved. $2 trillion is the pool, and a 2 to 3% allocation of that can and should be possible subject to getting larger scale deals (like Goodstart) which pass risk/return muster.

**Daniel Petre: Goodstart is an amazing story but do you think there will be other instances where such a large entity can be funded/managed?

Michael: I hope so Daniel. I do think the next large scale impact investing transaction will probably be in the social housing area. Most Australian state governments have multi-billion dollar balance sheet problems and in a low rate/low return environment, it really should be possible to have a funding model that enables super funds to get reasonable returns with some modest government support and intelligently structured models that combine social, affordable and conventional housing. There is a lot of good work and thinking in this area, and it needs a government ‘transaction mentality’ to drive a deal.

Rick Baker: I would love your thoughts on life balance, particularly family/work balance. How should an overworked startup founder approach this?

Michael: 1. Take the relationships close to you seriously and turn off the phone. 2. Understand what your energy source is and honour it (mine is a daily addiction to exercise, which is both therapeutic and my introvert time-out for reflection) 3. Have a spiritual perspective — that you give things full energy and attention and what will be will be (I found my Christian faith profoundly important at critical periods in SVA’s life and the Goodstart transaction where I had serious doubts about things collapsing… the notion of doing your absolute best but trusting in a Greater Being or Spirit — whatever the result I found very comforting. And to be clear I mean this in a secular way. I have had many conversations with social purpose entrepreneurs who refer to a strong belief and faith in common humanity and a deeper spirit which comes from a variety of sources & belief systems and supports and nourishes them in the periods of doubt and pain that are inevitable)

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