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May 30, 2018

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Allocating to Impact Investments - how this looks in reality

November 2, 2018

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What makes a project investment-ready?

March 20, 2018

 

I am excited to report that I am now working with 3 companies that all offer solutions with distinct social impact! They are at differing stages of company development, and present very different scenarios on how investment can transform their future.

 

Consider these:

 

Company A has a strong operational track record over the past 10 years, being cashflow positive for 7 and close to operational break-even at the moment. The founder is a veteran in the social enterprise space, and is demonstrably skilled in execution and managing his company. What he needs is stable, affordable investment that could facilitate capacity expansion, so he can keep doing what he is doing, and at a larger scale. 

 

Company B is a high-profile social enterprise engineering start-up with an innovative product that is superior to global MNC solutions, but they selling these locally at a third of the going market price. They have already received socent-specific accelerator funding, and are profitable - but all of their funding, resources and costs are currently at significantly depressed prices. As such, the question they face is - how would these financials change as they scale? How can they develop a global strategy to expand their addressable market? Can they find an investor who can help them not only financially, but also strategically?

 

For Company C, this tech startup has been approached by another company for a merger. This would bring immediate value based on their assets and, more importantly, their team - Co C will then have a broader team which would also be able to devote time to business development and marketing strategy, thereby accelerating the overall pace of Co development. In a world where tech evolves exponentially every day, the chance to reach the market earlier could be a case of survival or extinction. But how much equity can Founder C sacrifice?

 

These scenarios really got me thinking - what makes a project investment ready? As a founder, how do you determine which investor, and which instrument to focus on?

 

So I came up with the below checklist of questions, as an early sounding-board for impact investment:

  • Does my project clearly express a mission to drive positive outcomes for society?

  • What is the end goal for this project? Could it be profitable at that point?

  • Does my project currently generate revenue? Or even profits?

  • What kind of "free" money (e.g. Social Enterprise Competitions, angel investors, your mum) do I have access to? How much work does it require to raise these "free" funds

  • How much would this sustain my project?

  • How would more money transform the scope of your project?

  • Do I need this money NOW, or would I always need money? How does this gel with my ability to repay interest in the future? (i.e. is equity as cheap as it may seem?)

Would you agree to this list as a starting point for a practical, realistic fundraising strategy? 

 

Ultimately, we hope to be positive and supportive for actual change makers in society. Please, please do say hello@ourconservatory.com and we can discuss potential areas we should consider, and how we can catalyse practical developments. 

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