This October, our Founder Joe was invited to Hawaii to join an expert panel on food system reform. It might sound like a highly technical discussion, but at its core, the conversation centered on “relationships,” “spirituality,” and “inner work.”
This panel invited several experts, including systems change investors, a former Silicon Valley VC, a Capital Coordination Expert, and Joe, all of whom are pioneers in the field of "Systemic Investing." They shared why traditional investment models are no longer working and how a more comprehensive and deeper method called "Polycapital" is taking root in Hawaii's food system.
You might be thinking: Is this just another buzzword inexplicably created by financial experts?
During the panel, our Founder Joe shared a simple way to understand it, beginning with three types of investing and two key differences that distinguish systems investing from traditional (or even impact) investing.
Types of Investing
Key Differences
So, why has this evolution in investing occurred?
A former Silicon Valley VC shared a painful experience during the panel, illustrating the necessity of shifting away from traditional investment methods.
A fund had once invested in a biotech company that developed an organic alternative to a chemical broad-spectrum herbicide. This innovation sounds fantastic, right?
However, after the company went public, a large chemical corporation began acquiring its stock, becoming both an investor and a global distributor for the startup. Ultimately, this chemical company deliberately chose not to promote the organic product and pulled it from the market, simply because it had a "conflict of interest" with their core chemical business.
This incident clearly showed the "extractive" nature of certain capital and its "misalignment" with system innovation. It was also emphasized that Hawaii has the opportunity to "leapfrog" the 70-year extractive model of the US mainland. The focus should be on "who owns the outcomes," not just "who invests." This ultimately pushed this former Silicon Valley VC to shift from traditional VC to a systemic investing model.
One of the core concepts of this panel is that "Polycapital" is currently emerging as a solution to the flaws of traditional investing. Especially when applied in Hawaii, the most valuable part of investing is not money, but "relational contributions," which include:
This investment perspective holds that "place-based" investing is most effective precisely because "relationships" are the top-tier asset, making everyone more willing to join this food revolution.
As one participant noted about local insights: "In an environment like Hawaii, the knowledge of how the food system works is far more valuable than a huge check with self-serving purposes."
Having the concept isn't enough. How can the ideas of localization and Polycapital be implemented in Hawaii to achieve the goal of food system transformation?
The panel shared several key investment cases from within Hawaii's food system, demonstrating what systems investing looks like in practice:
The Orchestrator: The investment in "The Orchestrator" was described as "the most impactful" investment their family had made to date. Why? Because the orchestratorplays the role of "glue," connecting everyone in the system (including everyone in the room) to leverage collective power.
If the problem in a system is the "silo effect," then the solution is "connection."
The panel pointed out that the problem is twofold: the "resource side" (funders) is siloed, and the "action side" (farmers, distributors) is also siloed. And "siloed funding only creates siloed action."
One example given was a regenerative forestry consulting case Omplexity founder Joe worked on in Costa Rica: In the past, hundreds of millions of dollars were poured into "pure conservation," which resulted in illegal logging and poaching. This was because the funding "failed to consider the hunger problem within the broader system."
And this is where the "Capital Orchestrator" becomes essential.
No single investor or organization can solve system-wide problems alone. The job of an orchestrator (and organizations like them) is to "build bridges" between different investors and coordinate different types of capital (grants, equity, debt). This ensures capital flows to the right leverage points at the right time, rather than just targeting a single problem like conservation, which often leads to today's solution becoming tomorrow's barrier.
Orchestrator-type organizations are dedicated to making every dollar truly benefit the entire ecosystem, rather than becoming a future obstacle, thereby creating a positive impact that goes beyond just "money."
But what is the hardest part of advancing systems change? Why wasn't this approach popular in the past?
The answer is just one word: "Ego."
"The problem is not that you have an ego, but that you don't realize your ego is getting in the way of the work that needs to be done."
"Outer work (systems change) cannot happen without inner work (personal practice)." When we can let go of our attachment to "who gets the credit" or "being seen" and instead discover our "inner wealth," true collaboration becomes possible.
Facing the current challenging political environment, Joe reminded all participants to take a "long-term perspective" (like the "Yin and Yang" in Chinese philosophy). The short-term turmoil and pain may be an opportunity, forcing us to build a more resilient local community that is not over-reliant on the government.
When facing structural problems, decentralized investment and individual action are definitely unworkable. When we lack the perspectives of the majority of stakeholders in a system, we are unable to truly see the "current reality" and identify the real solutions. Therefore, a systems investor needs to:
The challenge of systems change is daunting, but you are not alone.
Omplexity, as a leading global systems change agency, has extensive experience in orchestration. We have helped organizations in countries around the world to confront and solve the most stubborn systemic issues—including the "0 to 1" process of building a system. We know how to guide diverse stakeholders to cross silos, see the bigger picture, and co-create actionable pathways for change.
If you have more detailed questions about systems investing, capital orchestration, or how to initiate systems change in your organization, please leave us a message via our Contact Us below. We are happy to offer a 30-minute free consultation to discuss your challenges.