社會企業募資實務

Abstract

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Fundraising as a modern startup is hard. Although more funding than ever is flowing into new companies from venture capitalists (VCs), angel investors, and governments, the bar is higher than ever for securing that capital. Modern VC funds are designed with one purpose: creating “unicorns” - companies with $1B USD+ valuations. To be under consideration for VC funding startups must be able to tell a growth story that achieves this kind of valuation within 3-5 years. This represents a vanishingly small subset of all new companies created. Fundraising as a social enterprise is another thing altogether. Investors look upon unfamiliar “for-purpose” companies with skepticism - as charities in disguise. Their purposes are viewed as cash consuming cost centers that may adversely affect the ability to scale. With few true venture scale social enterprises existing in the marketplace, social enterprise startups have few peers to point to as success cases. This makes progress in a fundraising context that values doing more of what has worked in the past extremely challenging. This paper explores the nature of the modern social enterprise - their key features, different types of impact models, and their benefits and drawbacks in the marketplace. Understanding how social enterprises differ from traditional companies is a key component of our ability to craft compelling fundraising stories to traditional equity investors.\n\nOne such story will be examined through a real-world case study: impctcoffee. As founder and CEO of impctcoffee, the author has just successfully closed a new round of funding from leading San Francisco/Bay Area angels and VC investors. This case study will outline impctcoffee’s social enterprise model, actual due dilligence questions from investors, and the answers to those questions that ultimately led to successfully being funded. This will be followed by an extrapolation of the strategy found within those answers to advice for social enterprises who wish to follow this fundraising path.