Impact investors have access to a growing array of tools for efficiently locating early-stage, private direct investments, according to a sector consultant.
“There are many ways investors can piggyback off the due diligence and vetting of entrepreneurs that others have already done,” said Tyler Hartung, chief operating officer of the Unreasonable Institute.
Hartung spoke at an investor “boot camp” sponsored by the Boulder, Colo.-based institute, an accelerator to for-profit social and environmental ventures seeking to address some of the world’s greatest challenges.
He told about 50 accredited angel investors and wealth managers, as well as representatives from family foundations and institutional investors, that the tools available to impact investors include a new global online platform that connects investors, social entrepreneurs and impact-oriented incubator and accelerator programs. EnableImpact.com is a free, searchable database of over 1,600 investors, 30 angel groups, 800 ventures and 700 programs.
Enable Impact grew from a collaboration between the Unreasonable Institute and tech-entrepreneur-turned-impact-investor Philip Berber, who sold his CyBerCorp online brokerage for day traders to Charles Schwab in 2000 for $488 million.
The platform allows impact investors to search for ventures geographically, including North America, Sub-Saharan Africa, Latin America and India. Investors can also search individual sectors, including employment and income generation, health or clean technology.
In addition to searching online, investors can also join impact-oriented angel investor networks, Hartung added.
“The good thing about angel investment groups is that they do a lot of the vetting of entrepreneurs coming into the accelerator programs. They have a variety of people who are leading the deals. One of the easiest first steps is to join people who have already done the heavy lifting,” Hartung said.
He also recommended specific networks:
● Toniic, a network of impact angels and fund managers that invests globally.
● Investors’ Circle, one of the oldest and largest impact angel groups, which invests mainly in U.S.-based startups.
● Pipeline Fellowship, which focuses on teaching women to become angel investors.
● Eleos Foundation, an organization that locates, vets and supports ventures, then takes the role of lead investor and invites others to participate in the deals.
● Unreasonable Angels, who commit to funding at least one Unreasonable Institute venture per year.
Hartung told the audience that investors can also attend investor-oriented workshops and “demo days” at incubators and accelerators, including:
● Village Capital, which runs a variety of sector-specific and geographically-focused programs.
● Impact Engine, which supports for-profit entrepreneurs running Internet-based and products-focused companies across different sectors.
● Agora Partnerships, which promotes startups based in Latin America.
● Unreasonable Institute, which hosts investor day events around the world and has affiliated institutes specifically focused on investing in East Africa and Mexico.
Attending conferences is yet another way to source impact deals. Some of the largest are SOCAP (Social Capital Markets), Skoll World Forum on Social Entrepreneurship, Clinton Global Initiative and Opportunity Collaboration.
Since its founding in 2010, the Unreasonable Institute has mentored 116 startups, 90 percent of which are still operating. These ventures raised over $53.5 million through 2013.
The Institute’s name references a George Bernard Shaw quote: “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man [and woman].” The Institute says the quote describes the type of entrepreneur it seeks to help—someone willing to ignore the skeptics, persist through failure and do whatever it takes to change the world for the better.
