For any startup, the pathway to sustainability is tough, but add the pressure of a product that makes a difference to people or planet, and it is really tough – you’re balancing building your product or service, navigating the legal minefield of setting up a company, building a team, embedding systems and processes, creating awareness of your product and trying to pay your bills. Sometimes you will need outside investment to get there. Enter impact investors – they are a growing number of investors looking for a return through both social impact and financial return.
So what’s the best way to get the attention of impact investors? Here are 3 tips for making sure you’re on the right track…
1 | Be Uber Clear on Your Impact
From the inception of your organisation’s public profile there should be an understanding of how your offering will solving a problem in society. This impact should be at the centre of all communications and sung loud and clear! It’s not just about the size of the problem (although it doesn’t hurt if you’re solving a big problem), but it’s about the extent to which your solution brings sizeable relief to a well articulated problem.
Professor Alnoor Ebrahim from the Harvard Business Review stated the importance of utilising evidence in showing the difference your organisation is making, rather than simply making grand, but general claims. So instead of reiterating mission statements, use community feedback, data and research to demonstrate the impact you’re making.
Sound Scouts, a startup who was part of Remarkable’s first cohort, is focussed on improving children’s experience with education by creating accessible and easy-to-use hearing tests. Sound Scouts noticed that children were slipping through the cracks in getting their hearing properly assessed, often being “diagnosed” as behavioural issues at school. Sound Scouts is both clinically proven (published in the International Journal of Audiology) and they are super clear on their impact, leading to the Federal Government recently announcing support for making Sound Scouts accessible to more than 600,000 Australian school children over the next 4-5 years. Not only is this a huge success for Sound Scouts, but it will change the lives of thousands of kids. How’s that for clear impact?!
2 | Have a Sense of Urgency
There are countless good causes out there – all doing really important work, and sadly that creates a level of “noise” that if you’re to get the attention of impact investors, you need to rise above. A sense of urgency is helping to show people that “the time is now” for this impact. There is little incentive for people who are unaffected to engage with the issue and ultimately the service. Therefore, in order to encourage action it’s crucial to drive necessity and to relate this issue back to something a greater audience cares about.
Xceptional, a tech company that harnesses the unique talents of people with autism and assists them in finding employment, use a personal story that affects the founder to create a sense of urgency. Founder, Mike Tozer’s driving force is his young son, who has autism and will be entering the workforce in ten years time. By 2028, they aim to make Xceptional the rule, rather than the exception. It’s not a niche problem either. In Australia, 1 in 70 people have autism, and the unemployment rate for people with autism is almost six times the rate of people without disability (31.6% vs 5.3%). Without a discernible way to change this pattern this number will only increase. Xceptional has recently been awarded $1m from the Google Impact Challenge which will fast-track development of their anxiety-reducing recruitment app. Not only is this an outstanding achievement for Xceptional, but it shows the effectiveness of urgent communications in attracting support from investors.
3 | Use Story to Move People
As emotional beings, stories which engage us emotionally tie us together, help us understand each other, and are what make us human. They are also more easily remembered and shared.
Testimonials are a good way for companies to appeal to consumer emotions: having someone telling their story of how your product/ service changed their life is significantly more compelling than listing off the functional attributes of the product. This is particularly important for a social enterprise, where the product/service can have a genuinely life-changing effect on someone’s life.
Autism Swim use this technique very effectively in their communications. Children with autism spectrum disorder (ASD) are 160 times more likely to drown, according to Columbia University research, a statistic which shocked Founder Erika Gleeson into action. Not only does Autism Swim provide the necessary training for instructors, but allows children with ASD to experience swimming and have fun in the water in the way all children should. Erika has heard the shocking stories of children with ASD who have sadly drowned (watch the video on their homepage), but she uses the positive stories of those who now know how to swim to encourage support from the public and investors.
So if you’re clear on your impact, have created a sense of urgency and use story to motivate – you will be guaranteed to be closer to having successful conversations with impact investors.