Four Key Traits Startups Share that Score Impact Investment

“Four!” by Pat Gaines (Source: Flickr)

Impact investment spans across markets and industries, but among companies that win a slice of the impact money pie, there are a few important, shared characteristics:

1. Business Acumen — Investors expect a return on investment, and they seek savvy startup founders with savvy business models that will generate handsome financial returns.
2. Location — 52% of impact investments went to developed markets (as opposed to emerging markets), an incredible 73% jump from last year, according to a 2015 J.P. Morgan and GIIN survey of 146 investing firms.
3. Industry — Housing, microfinance and financial services top the impact investing industry by total assets under management followed by energy, agriculture, healthcare and technology, reports the 2015 J.P. Morgan and GIIN survey.
4. Accelerators — Good accelerators give early-stage startups an opportunity to refine their business plans, maximize their social impact, and score their seed funding. The initial capital proves particularly important since most investors avoid the seed round in favor of supporting richer, more developed businesses. In the last two years, over 40 social enterprise accelerators have launched, creating plenty of opportunity for impact-conscious startup founders.

To learn about social impact, impact investment and our pro bono consulting services for startups, please visit our site at StartingUpGood.info.