I first met Alex Papanikolaou at the EIE event in Edinburgh a little over three years ago. It took some time to finally get a chance to speak with him as he seemed to know everyone there and they all wanted to say hi and see how his project was going. When we did finally chat it was easy to see why there was such a long queue. Alex is one of the most charismatic and passionate entrepreneurs on the planet, qualities that have enabled him to achieve a lot on a very limited budget and against perceived odds.
I use the term ‘perceived’ cautiously. Alex was born with cerebral palsy, but has never let this get in his way. In fact, it’s driven him to work harder to change the perception of him and his situation.
Alex has always been driven and has always wanted to run his own business. When he was young he would fix other people’s computers for money, a course of action he might have pursued if he had not changed track to focus on his own plight. Alex has always loved travelling. What started as a trip to New York when he was 18 morphed into visiting 35 countries in 5 years, including a year spent in Australia, Singapore and Dubai.
And while he was never someone who wanted to make a big deal about his situation, the more Alex travelled the more he became aware of the restrictions for someone with his condition. Importantly, the realisation was not in the individual limitations, but in the limitations of the devices created for him. Like any good entrepreneur, Alex spotted a gap in the market, a gap he wasn’t going to wait around idly for someone else to fill.
Enter Freedom One Life, the company Alex founded not to invent a better version of the powered wheelchair, but rather, to give all those who are restricted by the limitations of what is currently available a new lease on life. Freedom One incorporates the latest in material and design developments to tackle some major flaws in existing powered wheelchairs. And yet, he’s constantly struggled to find investors.
So let’s walk you through this as a hypothetical situation:
You’ve started a company and identified a market worth £1.23 Billion and growing annually.
Your beta testing shows incredible improvements on existing products. Yours has extended range, improved mobility, an aesthetically pleasing design, and a catalogue of other enhancements that make your competitors look prehistoric.
Further, you’ve developed an industry first Direct to Customer support channel that gets your consumers back up and running next day. Your competitors don’t offer any of this and 3rd parties can take weeks to come out and repair.
Sounds like you’d be swimming in offers for investment. But, here’s the catch, because of the nature of your company investors might categorise you as a Social Impact company. And therein lies the problem
Social Impact doesn’t mean there will be no returns
Too many investors would classify Freedom One as a social impact investment (rightly or wrongly) and assume the likely potential return would be minimal. And,regardless of how altruistic we believe we are, too many investors speak about having an impact and not enough of them follow up with investment.
It really is a shame and every time I see it I want to scream out “Social Impact Investing is not Charity!”. Doing good and seeing an incredible return are not mutually exclusive. Think of all of the incredible highly profitable B Corps, some of them you’d never know were B Corps unless you spent the time looking them up. To give a few examples, The Honest Company, founded in 2011, recently raised funds valuing it at a little under $1 Billion, Ben & Jerry’s sold to Unilever a long time ago for over $300 million, Patagonia (the outdoor adventure sports clothing company) is worth more than $1 Billion and there are 26 B Corps on the inc. magazine. 5000 list.
Investors who continue to write off Social Impact investments before even reviewing the underlying business plan, or giving it more than a brief read, may be missing out on big big returns. So the next time you receive a pitch deck from a company with an element of social impact treat it like every other investment opportunity you receive. If the business model doesn’t stack up, then give it a miss. However, if the market is growing, if the product is great, and if the team is rock solid, well, I leave that to you.
Returning to Alex, he could have gone out and asked for donations, a JustGiving page perhaps, or gone to Kickstarter, where he could sell branded goods to raise the capital he needs. But he’s not looking for your sympathy investment or donation; he doesn’t need it. What he wants is for you to buy into his vision and his business. In return, he’s going to improve the lives of those who experience the same frustrations he has and, if all goes to play, he’ll make you a nice little profit as well. That’s why he’s gone down the equity route, selling a stake in his business on SyndicateRoom.
“I fully believe Freedom One Life will change people’s lives, and people will unlock opportunities due to having a product and service they can rely on and trust for their independence.” — Alex