You’ve probably heard the old adage “Do well while doing good” but does that really matter to investors in the “real world”?
Surprisingly enough, it does. A lot actually.
My company, 1000 Angels, invests millions of dollars each year in startups raising Seed or Series A capital. And part of our investment screening process includes assessing how we feel about the business and the founders from an ethical perspective. But we aren’t the only Seed Stage investors that feel that way —the market for conscious capital is growing at a significant rate.
“Finding founders who prioritize consciousness, culture and self-care for themselves, their teams and customers is a big part of our due diligence and investing decisions” says Gayle Jennings-O’Byrne, venture investor and founder of iNTENT Manifesto, and member of The Assemblage NoMad.
Pitching your business from a triple bottom line perspective is a great way to differentiate yourself and possibly attract capital faster and more easily. Although raising money for a new venture is never easy, here are 5 reasons your conscious company can have an edge when it comes to capital raising:
2. Follow-On Capital – Even if your company is still early, it’s great to point out to investors that there have been tectonic shifts in the later-stage capital base. Over $25 billion was invested by impact funds in 2017, which represented 17% year over year growth. This means substantially increased allocations to impact businesses that need growth stage equity. Knowing that there is a big pool of capital that can help you scale once you reach that stage greatly reduces the perceived risk to investors in Seed or Series A rounds.
4. Reduced Cost of Capital/Better Valuations – Even though 66% of impact investors are looking for what we call “market” risk-adjusted returns, that means 33% of them are actually willing to accept below market returns to support the positive externalities generated by your business. This means better valuations a more equity retained to compensate you and your team for the long term.
So don’t underestimate how valuable conscious management is to your company. Cultivate it carefully to realize the value it can create for you, your investors and your company.