The number of angel investors investing in early and mid-stage companies in the U.S. has increased significantly in recent years. So what does it take to raise angel funding today? Peter discusses how entrepreneurs should prepare for this kind of fundraising, what they should expect when a deal goes through, and how to manage ongoing relationships with investors. He also touches on the differences between friends and family money, angel investors, and venture capital funding. Read more
Impact Investing is a term that has a wide range of interpretations. In order to have credibility, consistency and clear understanding about what constitutes success in impact investing it’s important to have a clear set of metrics to understand the social, environmental and economic impacts of impact investments.
Impact is Big Business
The impact investing industry is growing fast with over a trillion dollars of investment over the next decade according to JP Morgan research reported in Business Ethics magazine. Funds that are investing for others find more and more reasons that they need to have clear metrics to demonstrate that they are carrying out the mission of the investors. While each fund may develop their own metrics individually, there are huge benefits to utilizing an agreed upon set of metrics across the industry to allow for apples-to-apples comparisons among funds.
Using standardized metrics provides a framework in which larger and larger amounts of investment can be made by sophisticated funds. The result of this is that impact investing funds can eclipse philanthropic efforts in improving health, education, environment and quality of life for underserved markets. There will always be a place for philanthropy, but research has shown many for-profit organizations have been able to bring greater impact with greater long term sustainability than those non-profits that provide one-time support.
While individual impact investors don’t have concerns about accountability or credibility, they should also be using metrics to help them understand and evaluate the deals that they are considering and to be able to hone their investing strategies to balance financial and social/environmental outcomes. Individuals will want to understand their investing goals, but will also want to be able to select impact investments that match and support their own values.
Global Impact Investing Ratings
In 2011 B Labs worked with over 200 impact investing funds to create GIIRS (pronounced “gears”), the Global Impact Investing Ratings System and its IRIS Registry for impact funds. Since then, GIIRS has become the defacto standard for measuring social and environmental impact on investments that are clear and verifiable by third parties. Impact companies that want to know how they’re doing can take a free impact assessment provided by B Labs that will let them know how they are doing and to test their future strategies against industry benchmarks. The ability to compare each company’s results based on standardized measures opens up huge new opportunities for B Corporations and for funds alike. Just as having standardized GAAP accounting guidelines makes investment analysis for public companies efficient, having the GIIRS standard opens the door for large scale investment in impact companies.
Rockies Venture Club Impact Investing
To learn more about B corporations and hear pitches from active impact companies, , consider attending the RVC Impact Investing event Tuesday, December 10th 5:00-7:30PM at the Colorado State University Denver Center Event Atrium 475 17th Street, Suite 200 Denver, CO. Click Here to Register
Impact Investing is not new and has been around since the 1960’s, if not before. Since that time we’ve seen a lot of success stories coming from impact investments. With these successes we’re also seeing significant amounts of dollars under management by impact investing funds with returns of 25% and up PLUS social and environmental impact.
Given the lack of early stage startup funding for impact companies, uncertainties with cleantech technologies, lack of governance in developing countries, lack of structured capital markets and exit opportunities in third world countries and the need to provide social and/or environmental impact, it’s a wonder that impact companies can return anything at all to investors.
In our research we’ve found many funds and foundations that have achieved financial success in making impact investments, but it’s sometimes difficult to find specific impact investments that have hit it big. What is the next “Instagram” of Impact Investing?
Here is a story of a company that hit it big. The good news is that they are not alone and that impact companies are doing well all the time.
d.light (http://www.dlightdesign.com) has created a product line of solar powered lanterns that bring light and power to third world communities where community electricity is not available. D.light makes high quality, affordable solar lanterns that are distributed world-wide with over half a million units delivered each month, delivering light to over 20 million individuals and families. The users pay less for solar lighting than traditional kerosene lanterns, plus the lighting allows for greater productivity and income generation when people can work beyond daylight hours. Students benefit from better study environments and homes are safer and healthier without kerosene fumes. Finally, the reduction in carbon emissions is significant. The statistics below show the social and environmental impacts of this company that is turning a good profit at the same time.
25,315,130 lives empowered
6,328,782 school-aged children reached with solar lighting
$767,644,065 saved in energy-related expenses
7,219,013,138 productive hours created for working and studying
1,794,878 tons of CO2 offset
30,807,967 kWh generated from renewable energy source
d.light has won numerous certifications and awards and is backed by an impressive collection of venture funds and foundations – all expecting to turn a profit on their investments. D.light is a “B Corporation” which means that it is a for profit corporation, but that it must meet rigorous standards of social and environmental performance, accountability and transparency.
At Rockies Venture Club we hope to find companies like this each December at our Impact Investing Event and support local companies that are doing good all over the world.
To learn more about impact investing and to meet the founders of four great impact companies, consider attending the RVC Impact Investing event Tuesday, December 10th 5:00-7:30PM at the Colorado State University Denver Center Event Atrium 475 17th Street, Suite 200 Denver, CO. Click Here to Register