Toniic, a global impact investor network, has released an e-guide to teach impact investors how to invest in early-stage social enterprises.
If this sounds unusual to you, given that startups today don’t seem to have problems attracting amounts in the billions (read Snapchat), it’s anything but. Impact investing is a completely different sport. Investors have shown reluctance in investing in early-stage enterprises, citing risks all around and showing an unwillingness to budge. They talk about “investment readiness”, and hope for social enterprises to come back to them when they are ready to absorb more capital.
The latest numbers by the World Economic Forum paint a similar picture. It found that $40 billion is currently committed to impact investments, a number that is far below the $1 trillion prediction of invested capital by 2020.
Investment in early-stage social ventures, although challenging, can be extremely rewarding, according to Toniic. It can allow investors to improve the lives of the poor or vulnerable – locally and globally – while providing a return on capital.
The industry realizes that financial capital is not the only gap. Social ventures need help with refining their business models, attracting human capital, and securing customers. With this in mind, the e-guide was developed, offering a first-of-its-kind comprehensive resource for investors interested in supporting early-stage companies.
“This publication was written specifically to make it easier for interested investors to deploy their capital in support of early-stage social enterprises, by sharing active impact investor stories and consolidating the established resources and organizations which support this space,” said Stephanie Cohn Rupp, CEO of Toniic, in a statement.
It includes:
- A brief overview of impact investing;
- A detailed “7-Step Framework”, based on feedback from global impact investors starting with developing your own investment strategy;
- Four case studies that explore enterprise development and the types of capital and resources accessed; and
- Regional guides that illustrate legal and practical challenges in six major regions across the globe, including lessons learned and peer contact information.
The e-guide was produced in collaboration with Duke University’s Center for the Advancement of Social Entrepreneurship “Initiative on Impact Investing”, thanks to a grant from The Rockefeller Foundation.