Around the world, investors are looking for ways to unlock the potential of their capital through exploring different business and industry models.
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Investor-seeking entrepreneurs think that generating huge profits is the best way of impressing investors. Entrepreneurs also believe that investors are more likely to sign checks if their idea is different than the standard offering. Although all of this is true, it doesn’t necessarily reflect the majority. Half of my time is spent with investors in startup companies. I have seen many reasons why investors invest in startups. An important fact that entrepreneurs are not aware of is the increasing interest in impact-focused startups.
Many investors are looking at impact investing to explore the potential of their capital for good. In order to have positive and sustainable impacts on the environment or society, impact investments must be made. The 2020 Annual Investor Survey conducted by GIIN estimates the market size of impact investments at $715 billion.
Similar: 20 Startups That Are Improving the Life and Future of Food in Latin America
Are you an impact-preneur?
Impact-preneurs are entrepreneurs that are dedicated to solving large-scale environmental or social problems. They build sustainable business models that serve a social or environmental purpose while simultaneously being profitable. This is the key insight. Although the underprivileged may not seem to have much money, it can be a source of long-term opportunities.
Similar: Why social impact businesses are on the rise
How to identify an industry that will create impact
It is easy to find an industry with a huge impact by looking at the 17 Sustainable Development Goals. Some of the popular sectors that have led to significant impact worldwide include microfinance, education, healthcare and renewable energy. It would be inappropriate to link impact to a particular industry or sector. A startup that has an impact is one that solves a major social problem.
Investors love the term “scalability”. Scalability combined with social causes is just the cherry on the cake. If you are not in an industry that has a significant social impact, consider repurposing your product to solve a large-scale issue.
Similar: Five Ways to Incorporate Social Good into Your Business
After all, money is not something we can eat.
Many entrepreneurs have had to reevaluate their vision for their business in these difficult times. It isn’t enough just to get into a market where the product can be bought. You need to remain relevant even if money is irrelevant. Impact investing is defined by the performance measurement of startups that are impact-driven. The impact in the targeted region is more important than the amount of profit. This measurement is not surprising. This method of measuring allows for new opportunities to innovate and address social and environmental problems holistically.
It’s never been more important to explore the impact of startups businesses. The world needs entrepreneurship now more than ever. People who dedicate themselves to social causes will be inadvertently the heroes of the future. The emerging stability of economies is being supported by social entrepreneurs. Investors are placing their bets on that.
Publited Sat, 14 August 2021 at 21:08:03 +0000