How to get involved with impact companies

I’ve been asked what are the best ways to get involved with impact companies, with limited time and money. I will share some tips and sourcing options with their pros and cons.

Impact investing is very rewarding, financially and socially. However, it takes time and navigating may be tricky. A few quick suggestions can help you start your personal impact journey.

Unfortunately, many miss out on impact investing because they don’t know where to start.

To start: Define your investment thesis

This may sound fancy, but it’s actually a list of your parameters. Just answer the following:

• How much am I willing to invest per company? This will also affect the stage of your investments. Pre-seed or seed for those with smaller investment sizes?
• What stage am I looking for? You can still opt for later stage investments with small amounts through syndicates. A good source is Angelist.
• Any particular sectors I like, I don’t like?
• Any specific area of impact? Gender, climate, food, education, health?
• Any geographic restrictions? Near me (place based), developing countries?

Once you lay out your investment strategy, it is much easier to source and assess the opportunities.

Now, let’s find those companies and co-investors:

Source #1: Syndicates 👉 Let others find and assess the deals

Syndicates are like small funds. A manager finds a company, assesses it (due diligence), negotiates the terms, and opens the opportunity for you to invest in in exchange for a management fee (usually 2%) and/or carried interest (a percentage of your return on the investments, often 20%). They care of all the paper work and reporting, and the exit.

Angelist is the most popular platform. Gust for investors is another one. As for an impact syndicate, check out Possibilian.

Source #2: Crowdfunding platforms 👉 Easiest way to diversify

Companies that choose crowdfunding are usually early stage companies. That means more uncertainty and the need to diversify. Diversification by investing through such platforms is easy as ticket sizes can be almost as small as you’d like. Paperwork is taken care of by the platforms and companies do the reporting.

Here are three examples that I have used: Seedrs, Crowdcube and Stonks

Source #3: Join an angel network or cohort 👉 You are not alone

There are many angel investors works. Chances are, there are several in your city. These networks are a great way to meet like minded investors, collaborate on due diligence and co-invest. Or you can join investor training programs, like those offered by Spring to join local or global cohorts.

Where will you start your journey to make the world a better place?

Read this post and more on my Typeshare Social Blog