According to the Case Foundation, impact investments are investments into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.
Basically, impact investors are looking to make investments that will create a positive social or environmental impact as well as provide a good ROI.
So what does this mean for you?
If you’re a startup that provides a positive environmental or social benefit, then impact investing could be an excellent way to secure funding that otherwise might have been unattainable.
Typically, the most common sectors that impact investors choose to invest in include clean energy, agriculture and forestry, food, education, healthcare, housing, access to clean water, and other similar industries.
If you’re curious to learn more about impact investing, how to connect with investors, and ultimately how this can help fund your sustainable startup, read on for more.
From Ron Flavin this month
The buying decisions of consumers of products and services of all kinds are increasingly driven by the degree to which companies and brands give back to the community or support issues such as sustainability.
Here are some statistics from 2019/2020 consumer surveys:
- 73% of respondents believe that a company can take actions that both increase profits and improve conditions in communities where it operates.
- 87% of respondents believe that stakeholders, not shareholders, are most important to long-term company success.
- 72% of Americans say they feel it is more important than ever that the companies they buy from reflect their values. 76% say supporting companies that are addressing social and environmental issues helps them feel they are doing their part. Nearly nine-in-10 consumers (86%) say they’re likely to purchase from purpose-driven companies.
So no matter what kind of product or service your business sells, showing how you support social impact can give your company an edge over the competition.
The field of impact investing is maturing and growing, attracting a broad range of both individual and institutional investors. According to a 2019 USAID survey, collectively, respondents manage USD 239 billion in impact investing assets. Let’s explore how you can find and connect with impact investors here.
Impact investors and impact investing are relatively new additions to the startup funding landscape. For most investors, the word “investment” typically leads to thoughts of financial returns. That’s natural. For the most part, investing in a startup comes with the expectation of gaining more money than what you parted with. But impact investors see things differently. See what that means here.
Important Industry Happenings
- Impact Investing, Just A Trend Or The Best Strategy To Help Save Our World? (via Forbes)
- An Overview of Impact Investing (via Wealthsimple)
- Market Trends: Looking Ahead at Impact Investing in 2020 (via Medium)