Looking for funding to grow your business? As you begin the hunt for capital, you can be sure of at least three things:
- You will get turned down at least once, probably more.
- Investors will dig into the inner workings of your business, asking a lot of questions that they will expect you to have answers to.
- They will be closely examining whether your company can deliver a good return on their investment.
What you may not be fully aware of yet is that there is a shift happening in the investment community, and it’s incredible—like iPhone, electric cars, teleportation incredible. There is a growing focus and desire by investors to “do well while doing good” which is adding an important new aspect to the funding process—and business in general. This bright and shiny “new kid on the block” is known as impact investing; more often called socially responsible investing or SRI.
Many Descriptions, One Goal
The US Forum For Sustainable and Responsible Investment (US SIF) offers an accurate, if broad, definition of SRI:
Just as there is no single approach to SRI, there is no single term to describe it. Depending on their emphasis, investors use such labels as: “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “socially responsible investing,” “sustainable investing” and “values-based investing,” among others.
Regardless of the label, the goal of socially responsible investing is to consider the social good as well as the financial return that will come from the investment.
So if your business practices are set up to promote ideals like environmental stewardship, human rights, social justice, and diversity, wouldn’t you want the company that’s investing in you to share the same values?
And as more and more funding agencies vie for the crown of “Most Socially Responsible Lender 21st Century,” it’s quite possible that businesses will be able to pick and choose who will provide their funding, rather than standing at the door of an investment agency and begging like Oliver Twist. It could happen…
Investors Pick Up The Gauntlet
As investment companies have taken on the challenge of SRI, the field of impact investing is growing steadily, with funding available for developed as well as emerging markets.
According to US SIF, sustainable, responsible, and impact investing strategies made up over $6 trillion in managed assets in 2013, and investors are actively looking for socially responsible companies to bet on. This is great news if your business has a social impact element built in. Translation, you have an increased chance of getting the capital you need. Woot woot!!!
Sources of Socially Responsible Business Funding
From institutional investors to web-based investment platforms to investor networks, there is an escalation happening in the investment community that is aimed at supporting companies with a large IMPACT both on the equity and lending side.
Our world needs companies committed to social responsibility as well as the bottom line, and now more than ever there are funding sources who both value that commitment and have made it part of their own overall business and investment strategies.
Socially responsible business is no longer an oxymoron. And it’s about time!
Here is a small sampling of responsible investment sources to get you started.
Venture Capital Companies:
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