What a difference a year makes. Twelve months ago we were working with our first cohort of companies coming through the Cannabis Capital Summit and we found that the experience was very different from the tech, life science, health care and consumer goods companies we typically work with. Read more
This article was inspired by Peter Adams blog post about the The Venture Capital Pitch – Team Slides. Here are few Angel Insights that you could consider discussing during a “deep dive” or other discussions with the start up under consideration. Read more
LOHAS (Lifestyles of Health and Sustainability) Food and Beverage is a unique market segment and it has its own set of rules and metrics. I’ve been looking forward to RVC’s LOHAS Natural Food and Beverage Conference for over a year now because we’ve seen a number of natural food and beverage companies coming across our sights and it has been difficult to gauge whether they are a good opportunity or not. Read more
Finding capital is no easy task. Lots of start-ups struggle early on with where to find the capital they need to bring a great product (or service) to market or to tend to a broken technology in need of some work. Funding Your Dreams: Calling All Entrepreneurs, a panel at this year’s WILD Summit, covered just this. Once you’ve determined how much capital you need, how do you put together your fundraising strategy? Who do you ask for funding and are you offering something in return? What do you need to know before you start? Read more
Last week at the Angel Capital Summit, the Rockies Venture Club hosted the first-ever University Startup Challenge. It was the first pitch competition in Colorado specifically for students from across the state, and we were proud to host it! Since they presented to real investors at an investor conference, we were looking for the ‘most fundable companies’ instead of just business plan competition winners. These entrepreneurs are all actively working to build their company, and some have real traction in the market. They were also on equal footing with the rest of the companies at ACS for investor funding. 5 of the top universities in Colorado nominated students for the event – University of Denver, CU-Boulder, CU-Denver, University of Northern Colorado and Colorado State University. 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
Investors don’t invest in ideas, products, or markets – they invest in people.
Ask any investor what their criteria are for choosing which companies they invest in and the answer will be that it’s the people. This is no secret among investors and the communities of entrepreneurs that they invest in, yet we see entrepreneurs ignore this principle every day.
I am continually amazed when entrepreneurs think that they can short-cut the process of forming relationships in this process. Entrepreneurs ask why we can’t just get angels to write them a check. These entrepreneurs will never receive funding.
Entrepreneurs who are successful become a part of the community. They get to know the people and they watch how investors respond to pitches. “What questions do they ask?” “Which companies do they invest in?” “How do good companies land the all- important lead investor?”
I don’t know many people who an attend one event and get to know all one hundred of the people who are there. It takes several events before you get to know the key players in the community. Entrepreneurs who are serious about raising money for their companies know that it takes time. They spend time doing the research for their company; they learn about the venture capital process; they create a great pitch and they spend three to six months or even up to a year getting to know the angels and VCs in the community.
Successful entrepreneurs also remain active in the community after their pitch. They realize that the pitch is not the end of the process, but that it is just the beginning. After the pitch, successful entrepreneurs continue attending events and work to develop a lead investor. They are active in the process rather than waiting for investors to come to them. Successful companies continue their involvement actively for an average of three to four months after the pitch in order to circle up their investors into a syndicate and close the deal.
The Rockies Venture Club offers the education and communities for those who are willing to learn and become a part of the community. Those who get involved are a part of the club that raised over $25 million in the past twelve months. The others are destined to keep waiting for someone to do the work for them.
How can you get involved?
1) Attend RVC events and other groups in the area.
2) Join RVC and become a member.
3) Take classes and workshops to build your knowledge of how venture capital works.
4) Take part in the free funding mastermind sessions offered by RVC to help you hone your strategy and learn from others.
5) Volunteer for events to get known in the community and contribute your share to the tremendous amount of work it takes to coordinate events.
6) Get to know the people you meet and ask them out for coffee, beer, etc.
7) Follow-up and stay connected even after your pitch.
Do these things and you will be more likely to find active investor interest in what you are pitching.
When we talk about Impact Investing, we’re talking about investments that make an impact on our communities. There are many ways that this can happen, but the two most common categories are social and environmental impact. My intuitive guess was that environmental impact investing would comprise the greatest portion of investment, but what The Global Impact Investing Network (GIIN) and, J.P. Morgan found in their study “Perspectives on Progress: Impact Investor Survey” January, 2013, was that environmental and social impact investing were almost equal, with slightly more investing going to social impacts.
It’s interesting to note that these two areas have typically NOT been addressed by business interests and therefore must be dealt with by governmental or philanthropic organizations. (In fact Rockies Venture Club gets a lot of applications for “Impact Companies” who “create jobs” or further economic development through their capitalistic activities. While it’s great that these companies do impact their communities, we’re looking for the companies that do something materially different than the normal day-to-day companies out there.
Environmental impact companies are often “clean tech” or “green tech” in their approach. They’re addressing environmental needs in many ways such as wind and solar, energy storage and delivery systems, biofuels, alternative energy sources such as generating energy from waste dumps. These companies are now becoming successful at both returning a profit to investors as well as reducing our carbon footprint, reducing energy costs, and furthering energy independence. That’s a big impact that our big oil and gas companies have not been able to effectively deliver in the past – primarily because there was so much money to be made in traditional energy delivery. Environmental impact companies are making a difference by making alternative energy sources economical, often without government subsidies.
Social impact investments are often more difficult to quantify the returns, yet they account for fully 50% of impact investments according to GIIN, J.P. Morgan. Social impact investments that can provide a return often take the form of jobs programs, education with immediate returns in productivity, water and sanitation systems that create jobs and health benefits for communities, healthcare delivery in remote areas and more. Rockies Venture Club has seen tremendous creativity and energy spent in addressing global community needs by companies that are innovating and finding lower costs of delivery and sustainable income that returns profits to investors while benefitting communities.
To learn more about Impact Investing and to hear speakers and pitches from Colorado 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
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