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5 Ways to Source Impact Investments

August 05, 2014

DailyWorth Expert

Angel Investor, Strategist, Catalyst at Large

http://www.catalystatlarge.com

So you’ve decided to do some impact investing. One of the things you need to be able to do is search out the right opportunities for you.

1. Find companies with rewards-based funding

Visit Indiegogo, Kickstarter, Plum Alley and any number of the other 300+ crowdfunding sites for something that you can support with rewards-based funding. GoldieBlox is a great example of a women/girls-focused business that got some early funding through Kickstarter. I supported that and another one, Hello Ruby (another STEM-oriented project for girls.) Plum Alley focuses on women-led businesses and nonprofits (not explicitly social impact businesses).

You won’t be making an investment for equity or debt in any of these (i.e. a return), but you could be part of launching something that goes on to gain investment later. Rewards-based crowdfunding lets you decide if you want to support something, whether you think it will be big commercially or not, since you won’t be doing it for a financial return.

2. Explore equity-based crowdfunding sites

Portfolia, CircleUp and other equity-based crowdfunding sites look for companies focused on sustainability and social impact. See what’s on Kiva, another website, for something that you can support with a zero-interest loan. Or look at Calvert Foundation’s new Vested site for a category of business (fair trade, organic, women-led or focused, regional) that you can support with a low-interest loan. 

Peeled Snacks is a woman-led company (I love Noha Waibsnaider, who I met when she raised money through Investors’ Circle) creating healthy snacks that also raised funding on CircleUp.

You will be making an investment for equity or debt through any of these sites, so you have to be sure that you have the available capital to invest at a higher level — and to be an accredited investor.

3. Learn about angel investing

A program like Pipeline Fellowship can teach you about angel investing. Or you can take a course from the Angel Resource Institute’s new Women First Enterprise program. Both of these will also link you to deal opportunities and networks.

Much angel training is consistent with what you’d pay attention to if you’re focused on social/environmental impact. But where the two often diverge is when you want to think about a triple bottom line rather than a single bottom line. (i.e. you may value the social or environmental return as much as the financial return). Most angel training is focused on high-growth ventures where the emphasis is financial. Some great impact investments can have the same potential financial upside, but some may not, because they are purposely prioritizing the social return. It all comes down to your personal objectives.

4. Join an angel group focused on sustainability and social impact

Consider Investors' Circle, Slow Money, Clearly Social Angels (in the UK), PYMWYMIC (in the Netherlands), Go-Beyond (in Switzerland and more) or Toniic and collaborate with other angel investors to look at opportunities. Investors' Circle has regional gatherings and pitch days. 

I learned more about angel investing through Investors’ Circle than anywhere else. Their deal flow is excellent, and, as a member, you can bring deals, help screen deals and see screened deals. If you’re a philanthropist with or without a family foundation, you might join a peer group like Confluence Philanthropy to share how and where to move your capital in line with your philanthropic objectives.

5. Start mentoring

Got business/startup experience? Mentor or join as a judge for seed-stage and early-stage ventures with social impact.

Interested in water? Check out ImagineH20

Tech for good? You might find opportunities to help women-led businesses through SheEO, Women 2.0, Girls Who Code or S.H.E. Summit

Interested in emerging economy businesses? Be a mentor for Unreasonable Institute, Village Capital, Ashoka or any number of local, regional or global programs.

You can also think about investing in an impact-focused venture fund or through an entity like RSF Social Finance, Root Capital, Calvert Foundation or another entity that will do low-interest “community investing.

Whatever you choose to do, remember that this is just the first part — finding opportunities. 

Suzanne Biegel is a member of the DailyWorth Experts program. Read more about the program here.

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