This guide provides information, not legal advice. Use it at your own risk. Information is not the same as legal advice. Legal advice is the formal application of information applied to an individual’s specific circumstances. We do not take responsibility for any potential misfortune that follows – either directly or indirectly – from using the information in this guide for your startup fundraising efforts.


So you want to start a business. One of the first steps you should take as a social entrepreneur is answering this question:


Understanding what type of entrepreneur you are will help you figure out what financing options might be best for your startup. Decisions about business types and financing are very personal. There is no one-size-fits-all solution and you may be relying on a variety of options. Hopefully, getting some clarity on the questions below will help you determine who you should be talking to and what you should be focusing on. Time is money and opportunity. Don’t waste time trying to be something you are not.


Keep in mind that this is just for you and your team. The more candid and thoughtful you are about the questions below, the easier it will be to see what financing options might be best for you and your company. Before you reach out to investors, it is important to figure out if you are open to hearing other people’s advice (which is a lot of what you’ll get when you start accepting money). Ask yourself: “Am I prepared to listen to advice that I might not want to hear? Am I ready to do my own due diligence and research in order to make informed decisions?”

Risk Profile: What is your/your team’s risk profile? What are each of you putting on the line? In other words, what is your risk tolerance? What role do you/your team want/expect to play as the company grows?

Financial Profile: What is your personal financial story? What is the personal financial story for each person on your team? What assets do you have? What responsibilities do you have? Where do you draw the line in using your own funds and what is your financial runway?

Coachability Profile: Are you coachable? Are you a team player? Do you work well with others?

What does “coachable” mean? Coachable is a term you will hear over and over again as you begin to raise capital. Like the sports analogy suggests, in this scenario you are the athlete, not the coach. You are training for a future event (the success of your business). Do you take advice and listen to others (for instance, your prospective investors), even if it is constructive criticism? Do you think you know everything and others’ input is completely irrelevant and useless?

Why is being a team player important? Going back to our sports analogy, starting a company is a team sport like soccer, not an individual event like long jump. It doesn’t matter if you are the best player out there. In a truly competitive game (which is what the business landscape is), you will not win if you do not play like a team. As the founder of your company, you will be responsible for its success, which includes being able to lead and manage others well. As someone with outside investors and corporate board management, you will also need to make decisions with their input and consent, not just based on what you think is right. If you are self-funded, these aren’t such big concerns.

Along these lines, you also need to spend some time thinking about the following:


1. Growth and Scale: Are you High-Growth? High-Scale? Mom + Pop? Local? Maker? Lifestyle?

High-growth: A business that generates significant revenue that is increasing at much faster rates than the rest of the economy. High-growth business are often seen in the technology sector.

High-scalability: The ability to significantly increase efficiency and reduce cost with additional units of production, thus leading to increased profit margins at larger production.

Mom + Pop: Small, local businesses that are independently owned and often run by family. Usually operate out of a single location.

Local: Businesses focused on supporting local communities, artisans, and food systems.

Maker: Businesses focused on handmade and/or artisan work. Usually small productions.

“Lifestyle”: A lifestyle business is a company that is focused on providing the owners with a certain quality of life and income level rather than maximizing revenue.

2. Capital Needs: What are your capital needs? When do you predict that you will start generating revenue? When do you predict that you will breakeven?

3. Vision and Goals: What are your general goals and vision for your business? Think both in terms of operational goals and impact goals.

Here are a couple of examples:

Big: We are a 300-person international operation that provides STEM (Science, Technology, Engineering, and Math) training for women across Asia and provides job matching services, generating over $8 million annually in revenue. Our management team travels internationally 60% of the time for investor meetings and for business development and works eighty-hour weeks. We are looking to be acquired by a major player in the human resources and technology space in the next two years.

Small: We are a boutique holistic health and sustainability practice – a team of five consultants – that works with technology startups in Silicon Valley to help them incorporate socially and environmentally responsible values into their companies. We set our own schedules, work forty-hour weeks with flexible hours and offer six weeks vacation annually. Since most of us are not willing to travel extensively for work, we have turned down opportunities to work with clients in other states. We are looking to expand our offerings and bring on an additional consultant in the next two years, but other than that, we are very happy with our current revenues and client load.

A Little Bit More About You and Your Company

Social entrepreneurs start a triple bottom line business to have impact. Some hope to retain 100% ownership and do not seek binding investments. Maybe they choose the “small is beautiful” route, combining the benefits of being their own boss with the flexibility to build their quality of life around their work. For others who are thinking very big, likely due to the scope and nature of their business (do they need equipment, real estate, etc?), they will need outside investment and these figures can get very large depending on the company’s capital needs.

Taking on investment is not “free money.” Outside investment comes with its own set of obligations and responsibilities, most notably retaining investors who literally have a stake in your company’s success and are very interested in seeing a return on their investment (whether that is financial, social, or both).

Secondly, seeking out and securing outside investment is a strategic process and involves engaging with a community of individuals and institutions that are evaluating early stage investment opportunities on a daily basis. You want to quickly educate yourself on how this space works and what questions people will be asking you.

• How big of an idea do you really have?
• How much do you know about the business you’re about to launch?
• How much capital do you need?
• How have you determined how much money you actually need to raise?
• Have you made a detailed budget?
• What funding sources will you seek – and what types of funds shouldn’t you seek?
• How long can you bootstrap?


There are lots of startups

• 565,000 startups are launched in the U.S. each month. That’s 6.78 million startups launched each year.

How many of them succeed?

80% of entrepreneurs fail within the first eighteen months.
55% of businesses fail within the first five years.

Where do they get money from?

57% of startups are funded by personal savings and credit.
38% of startups receive Friends and Family financing.
0.91% of start-ups get funded by angel investors and 0.05% of startups are funded by venture capitalists.

It is really important to develop a strong business model (the blueprint for your business) and revenue model (how you are going to make money) as well as understand the legal implications and requirements for your business. While these topics aren’t covered in this guide, you can learn more from following Social Good Guides:

A Legal Primer for Changemakers by Carly Leinheiser
Business Plans and Planning for Social Ventures and Nonprofits by Mischa Byruck

challenge_for_social_entrepreneurs_100714Perhaps the biggest issue social entrepreneurs face when raising capital is the lack of precedent. What does this mean and how does this impact you?

The number of investors who care deeply enough about changing business-as-usual to take on the additional risk of an “unproven” market is quite small.

Fewer social enterprises have scaled up in the impact space. This leaves a lot of unknowns for investors such as:

• There are fewer examples of traditional (or nontraditional) exits in the impact space.

• For the companies that have grown and seen significant success in the market, many have experienced the challenges of maintaining mission and “selling out.” A number of socially responsible business – including Ben + Jerry’s (Unilever), Tom’s (Colgate Palmolive), Kiehl’s (L’Oreal) and Silk Soy Milk (Dean Foods) – have been acquired by larger brands. Outcomes from these acquisitions have sparked controversy and debate.

• While a variety of organizations are working hard in the impact metrics space (how we measure the success of a social initiative), this too is a growing field with a short history.

• There are many potential investors who are interested, but are waiting in the wings to see what happens.

As a result of this lack of precedent, much of what you as a startup social entrepreneur will be doing is field-building: defining what social entrepreneurship is, best practices, etc. Today’s social entrepreneurs are paving the way for the next generation. While clearing the path for others to follow obviously comes with challenges, there is a lot of opportunity for innovation and leadership.


The investment pathway for a startup traditionally follows this path: personal funds, friends and family, accelerator/incubator, angel investor, venture capitalist, and banks/IPO (initial public offering). Social entrepreneurs can now also seek financing through crowdfunding and from forward-thinking foundations (venture philanthropy) as a result of changes in the investment ecosystem.

In the following sections, we will discuss several types of funding and what you should be thinking about as you chart your own fundraising path.

Words of Wisdom

“With funding, it’s tricky, because most startups make the mistake of pursuing it prematurely. They focus first on funding, rather than building some traction, that will inherently attract funding organically.”
– Edrizio de la Cruz, Co-Founder + CEO of Regalii



Bootstrapping a startup involves doing it all by yourself, using whatever resources you have at your disposal, and usually on a small budget. When I started my first business, I worked as a personal trainer so that I could build my company. I would wake up at 5:00 or 5:30 am, train clients in the morning, trek back to my apartment to work on the business, and then head back to the gym to work with clients in the evening, often until 9:00 pm. In the earliest phases, the most expensive part of the business was me. I had to find an alternative source of income that allowed me to pay my living expenses while giving me a very flexible schedule.

Part of your creative bootstrapping strategy may likely involve investing some of your own money into the business. “Capital contributions” are any investment provided by the founders/partners. What might this look like? It could mean using your savings, funneling your income from your job into your business, etc.

The earlier stage a company is in, the higher risk the investment. Initial capital contributions are the first money to come in, so by definition this money is the riskiest. That said, if you don’t have enough faith to put your own money in your company, why should an investor?

If you are taking money out of your 401k or maxing out your credit card to fund your business, it is safe to say that you should fully understand that you might never see that money again or catch up with your debt. Think about these things carefully.

The main attraction of self-funding your business is the ability to maintain control of the company and retain your entire equity stake. As you begin to take on outside investment, you are selling equity to investors and diluting your ownership. That said, owning 100% of something that is worth $0 is still $0. Some companies will need a larger injection of capital to survive and will need to seek outside capital.

Words of Wisdom

Early-stage or still in school? Think about participating in a business plan competition:

“Smart money [in other words, money that comes with additional non-financial benefits like connections or mentorship] is the most important characteristic of capital for a social enterprise. Not all money is created equal and it’s critical that social entrepreneurs align values – not just value – when fundraising. Business plan competitions are great resources when they have themes that match their competitors and judges. For example, my company, Bennu, was introduced to investors who shared our environmental mission at events such as the William James Socially Responsible Business Plan Competition and Rice University Business Plan Competition. We found supporters who invested with their heart and wallet, which exponentially increased the impact.”
– Ashok Kamal, Co-Founder of Bennu



Friends and family money, as the name suggests, is investment that comes from the founders’ personal network. This investment category is sometimes called “friends, family, and fools” or “love money,” as it is often coming from individuals investing in a company exclusively because they know the founder personally, not because they are professional investors who have carefully evaluated an early stage investment opportunity.

Friends and Family investment is a very common source of funding for startups. According to the Global Entrepreneurship Monitor (2008), four out of five entrepreneurs receive funding from personal savings and cash from friends and family. Total investment from friends and family investors in the U.S. is equivalent to 1.4% of U.S. gross domestic product (GDP).

Like founder investment, friends and family money is very high risk. As a founder raising capital, you should be clear about this with prospective friends and family investors.

Like most things related to startups and investing, everyone has their own opinion. As the title of this Forbes article by Mitch Free suggests — “Entrepreneurs: If You Love Your Family, Don’t Let Them Invest in Your Startup” – there are many people who strongly oppose using capital from family members to grow a company. Free points out the high failure rate of entrepreneurs: three out of four businesses will fail. Keep in mind that no matter how great we think our business is, the odds are not in our favor. Be careful when asking for money from individuals who do not have experience with high-risk investments and/or who cannot afford to lose the money. Educating friends and family about these risks should be part of your process. Engaging friends and family as investors in your company can put a strain on personal relationships.

Words of Wisdom

“Friends and family are often the best investors because they know you and your business better than anyone. They have seen firsthand how hard you will work to make the most of their investment. They are aware of the personal sacrifices you’ve made for your business, and they know you’ll work as hard for their investment as you will for your own. The last thing you want to do is assume involvement or feel entitled to financial support from someone just because they love you as a person. Be prepared to back up your ask with a proposition you know will be worth your FF’s time and money. As easy as it may be to raise money from folks who know you, it is much more painful to disappoint them, and in the end the cost is greater. Be sure of your ability for success before asking anyone, but especially someone you know, for money.”
– Jennie Dundas, Co-Founder of Blue Marble Ice Cream



Crowdfunding involves raising capital, usually in small amounts, from a large number of people. In the Internet era, this is predominantly happening online through a variety of crowdfunding platforms – each with their own approach and community.

There are three main types of crowdfunding platforms: donation-based, lending-based, and investment-based. With donation-based platforms, like Kickstarter and IndieGoGo, “backers” contribute capital to a project in exchange for feeling good about supporting something they admire, special prizes, or pre-purchasing products. Lending-based platforms, like Funding Circle and Lending Club, allow backers to loan money to projects listed on the site. Investment-based crowdfunding platforms, like CircleUp and WeFunder, provide equity or revenue-share opportunities in exchange for an investment. It is important to note that investment-based platforms are currently only open to accredited investors (see the section on “Angel Investors” below).

The crowdfunding landscape is changing rapidly, particularly following the creation of the JOBS (Jumpstart Our Business Startups) Act. In 2012, the crowdfunding market in North America grew 105% to reach $1.6 billion in capital raised. Kickstarter raised over $199 million for projects funded through its site in 2012.

Below is a list of some crowdfunding platforms; however, this landscape is changing rapidly:
Funders Club
Funding Circle
Lending Club

Before you begin a crowdfunding campaign, do your research. The list above is the tip of the iceberg (in 2013, over 500 platforms were active). Find a platform that is appropriate for your project or business and research its guidelines, fees, policies, restrictions, etc. Be thoughtful about your funding goal. Find a creative marketing strategy and leverage your social networks.

Given the rapidly changing landscape and new legislation, if you are exploring crowdfunding as a means to finance your company, stay updated on news and developments related to this topic as it will likely affect opportunities for your company. Learn more at the U.S. Securities and Exchange Commission (SEC) Jumpstart Our Business Startups (JOBS) Act webpage.

Crowdfunding can be incredibly time-consuming and where time is money…this is an important consideration. Whether you ultimately move forward with this strategy or with another strategy, you would be wise to consider the time involved. Another important consideration is discovering what will give you the biggest bang for your time.

Words of Wisdom

“Starting off with a crowdfunding campaign was a great way to both raise some initial money through presales of the LuminAID light and also test out the market with real customers (as opposed to a handful of investors). It also helped us to soft launch the product in a public marketplace as well as get associated press and media that spread the word about our product and mission quickly. I highly recommend it (for the reasons cited above!), especially if you have already started to work out the details of your supply chain and distribution – for instance] how you will scale up your manufacturing to fulfill your orders if you have a product [and what’s] the best way to send them out once the campaign closes.”
– Andrea Sreshta, Co-Founder of LuminAID

“We used crowdfunding for our project mainly because we want to engage community support through our network and also through the network of our curators. Crowdfunding is a great way to tell a story about our organization and why we are doing it. We have seen success on civic and creative projects using crowdfunding and [so we] gave it a try, and also we had been building a network that has known about us over the past year. I think that this [was] a good time to reconnect with them about where we are going with our project. Crowdfunding is a very stressful and nerve-racking experience as it challenges you in many levels in terms of how you ask for support and how to effectively market your offerings and position your brand. In 30 days you would have to come up with different ways to communicate your message in order to reach different audiences. I think communicating your value and telling the world you are doing is a very effective way to push the limits of any organization or business. I would definitely recommend it if your campaign is well prepared. We may do it again, but repeating a crowdfunding campaign is tricky and we have to look into that!”
– Eric Ho, Founder, miLES (made in Lower East Side)



Accelerators and Incubators are two different types of support ecosystems for startups. They both have the shared goal of increasing a startup’s likelihood of success and reducing the length of time it takes for early stage companies to get off the ground.

While the terms “accelerator” and “incubator” are often used interchangeably in colloquial conversation, they actually mean different things. Accelerators are programs that provide some combination of services, mentoring, workspace, and funding in exchange for equity (usually 6-8%) for early stage companies. They are often highly selective and last for a set period of time (think three to six months). The culminating event is a pitch or demo-day in front of a room full of angels and venture capitalists.

Incubators provide office space, services, and advisory support. Unlike accelerators, incubators usually do not have a set timeframe (companies may stay for one year or more), companies may pay a small fee to participate, and they can be affiliated with a larger company (like Wieden + Kennedy’s Portland Incubator Experiment) or a university (like New York University’s ACRE). Currently, there are over 1,250 incubators in the U.S.

Don’t get confused as there is some crossover in this space and these terms are sometimes used interchangeably. The key thing to note is that these are programs meant to support early stage entrepreneurs with mentorship, education, resources and sometimes even money.

Along those lines, Fellowship Programs and Pitch Competitions can also be great launchpads for entrepreneurs. Fellowships usually provide technical support, professional development, a peer network, and access to all-star mentors. They may also provide funding. Pitch Competitions often come with a prize purse and will get you in front of prospective advisors, investors, and partners. A number of early stage social ventures have been able to bootstrap their companies from pitch competition prize money. One thing to note about pitch competitions is that there are a lot more pitch competitions open only to students, so if you are a student, you should definitely take advantage of this opportunity.

Some accelerators, incubators, fellowships, and pitch competitions for social entrepreneurs:


Agora Partnerships
GoodCompany Ventures
Hub Ventures
Hult Prize
Impact Engine
Matter Media Entrepreneurship Accelerator
Unreasonable Institute
Village Capital


Global Social Benefit Incubator
Social Enterprise Greenhouse Incubator
Skoll Social Benefit Incubator


Ashoka Fellows Program
Draper Richards Kaplan
Echoing Green
Mentor Capital Network
PopTech Social Innovation Fellows
The Schwab Foundation Fellows Program


NYU Reynolds Program in Social Entrepreneurship Listing of Social Venture Competitions and Related Fellowships (Comprehensive PDF)
* Dell Social Innovation Challenge
Global Social Venture Competition
Mentor Capital Network’s Sustainable Business Plan Competition
MIT IDEAS Global Challenge

Like crowdfunding, this ecosystem is also changing quickly with new accelerators and incubators popping up. There is even talk of an “accelerator/incubator bubble.” Be prepared to do some research on what opportunities may be appropriate for your company. You may find programs that support your industry (for instance, RockHealth or BluePrint Health for health-related startups), your geographic location (The Iron Yard in Greenville, South Carolina or VentureHive in Miami, Florida), or your founding team NewMe Accelerator and Springboard Enterprises work with minority-led and women-led founding teams, respectively.

Words of Wisdom

“Seed capital from Village Capital is a great option for an entrepreneur to get from a running pilot to a Series A round. The terms are flexible and entrepreneur-friendly and even more important is the access to the network and the connections that any early stage startup needs, especially if it is being run by a first time entrepreneur. I do recommend at least a running pilot before applying. Village Capital uses a unique peer-voting based diligence model. So in order to get high rating from 14 other co-horts, it is important to show traction and progress.”
– Shelley Saxena, Founder of Sevamob

“I participated in Village Capital through the Idea Village accelerator in New Orleans in Kickboard’s (formerly Drop the Chalk) first year of business. As an early stage entrepreneur, I knew that seed capital was critical to our growth, as were investors who believed in the educational mission of the company. Having no prior fundraising experience, I found Village Capital to be quite valuable – the opportunity to sit on both sides of the due diligence table, evaluating my peers’ companies as they evaluated Kickboard, greatly increased my understanding of what makes a company attractive to an investor.”
– Jennifer Medbery, Founder of Kickboard



More and more philanthropists and philanthropic institutions are adopting a “business-like” or venture capital style approach to managing their portfolios, relying on impact metrics to evaluate success, getting more intimately involved with a venture, increasing technical support, and rethinking funding structures. The term “venture philanthropy” is used by some to describe this approach.

The term ‘venture philanthropy’ was first coined in 1969 by John D. Rockefeller III who used it to describe ‘an adventurous approach to funding unpopular social causes’. When the term resurfaced in the mid 1990s, it was associated with a growing community of dotcom millionaires who were seeking to apply both their wealth and their business acumen to the most pressing social problems.” – Social Innovation Exchange

Mission-related investments and program-related investments (commonly known as “MRIs” and “PRIs,” respectively) are vehicles for foundations to invest in for-profit companies that meet certain social impact criteria.

An MRI is an investment from a foundation’s corpus that aims to achieve both a social and financial return. These are risk-adjusted, market-rate, and comparable to a foundation’s traditional investments. MRIs are not an official designation by the Internal Revenue Service.

Trillium Asset Management explains foundation structure and the philosophy behind MRIs: c other 95 percent. MRI goes a step further by factoring in the multiple consequences of investment decisions in order to align them with the organization’s mission and reduce this disparity.”

Since a foundation’s assets are made up of much lower risk investments (such as stocks in publicly traded companies), as a startup company you would be looking for a program-related investment (PRI). PRIs are considered below-market-rate and count towards a foundation’s “qualifying distributions” – meaning they are treated as if they were grants and help a foundation reach its annual 5% payout requirement. As such, PRIs must meet certain requirements under the federal tax code:

“The primary purpose is to accomplish one or more of the foundation’s exempt purposes, production of income or appreciation of property is not a significant purpose, and influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose.”

While more and more foundation funding is being delivered in the form of PRIs, the total amount invested by foundations via PRIs has increased from $139 million in 1990 to $701 million in 2009 – PRIs still make up only a small percentage of total foundation giving. In 2009, U.S. foundations made $42.9 billion in grants.

Some foundations doing program-related and/or mission-related investing include:

Aga Khan Foundation
Beyond Capital Fund
Bill and Melinda Gates Foundation
Blue Ridge Foundation
Calvert Foundation
Ford Foundation
Gates Family Foundation
KL Felicitas Foundation
MacArthur Foundation
Packard Foundation
Robert Wood Johnson Foundation
Root Capital
W.K. Kellogg Foundation

Some examples of Venture Philanthropy Funds are:

Acumen Fund
New Schools Venture Fund
Omidyar Network
SV2 (Silicon Valley Social Venture Partners)
Social Venture Partners International

Currently about one out of seven foundations are participating in either MRIs or PRIs and more than half of all PRIs were loans. According to an Indiana University-Purdue University Indianapolis (IUPUI) survey, foundation leaders identify a variety of obstacles that hinder their adoption of PRIs in their portfolios, including the lack of knowledge about PRIs or PRI management and lack of appropriate deal flow.



Angel investors are high net worth individuals who meet one of the accredited investor criteria: individuals who either (a) earn $200,000 or more in base salary each year or (b) have a net worth exceeding $1,000,000.

Angels invest in early stage companies and as a result, their investments are considered high risk (hence the term “angel”). In order to mitigate risk, angels build a diversified portfolio of companies that they invest in.

In 2012, angels invested $22.9 billion in 67,030 startups. The average angel deal size was $341,800 with an average deal valuation of $2.7 million.

Some angels operate independently, while others participate in organized angel groups. You can research angel groups in your area as well as search for groups that may focus on your industry. For example, Investors’ Circle works specifically with social ventures and the CleanTech Angel Network looks at clean technology opportunities.

Groups providing angel investment for social entrepreneurs:

Investors’ Circle
Pipeline Fellowship

Online databases of angel investors and angel groups:

Angel Capital Association
Angel List

Angel investors want to look at deals that offer two main things: scalable business models and traction.

What is a scalable business model? A scalable business model is something that is going to grow exponentially and have a diminishing marginal cost and/or an increasing marginal profit. Think of those hockey stick graphs entrepreneurs like to show. Remember that angels want their money to grow significantly, which is why they are making a risky investment in an early stage business.

What is traction? Traction is an indication that there is interest in your product. For different types of companies, that can mean different things. It might be “We got 5,000 Facebook likes in our first month” or “We sold 500 units off the floor at a trade show” or “We have received purchase orders of $20,000 from these three major brands.” Traction will usually come in conjunction with completion of a pilot project, beta phase, or prototype. Traction is a risk-mitigating factor for an investor.

Here is what the Angel Resource Institute recommends regarding when to approach an angel group:

“In general, the best time to seek angel funding is when:

• Your product is developed or near completion.
• You have existing customers or potential customers who will confirm they will buy from you.
• You’ve invested your own dollars and exhausted other alternatives, including friends and family.
• You can demonstrate that the business is likely to grow rapidly and reach at least $10 million in annual revenues in the next 3-7 years.
• Your business plan is in top shape.”

A number of people in the angel investing space will say not to worry about a full-scale business plan or executive summary (a one to two page synopsis of your business, following a standard template), and instead just prepare an awesome pitch deck. As always, research your audience.

Words of Wisdom

“I decided to raise cash by offering equity to investors in exchange for convertible debt. I raised money because I didn’t have any more money that I could invest personally to grow the company. I issued convertible debt because it is a nice way to avoid mispricing the company thus protecting myself and my investors from downside risk. I didn’t research taking out a loan because the company was in such an early stage and I needed the money ASAP.The first step in raising money is figuring out how much you need. For an early stage company, I would recommend raising enough capital to last a year. You don’t want to have to worry about starting to raise immediately after closing your round, but you also want to stay lean and recognize that your capital needs may change drastically after you go to market.”
– Philip Crouse, Founder of Cup + Compass

“When we were first starting VolunteerSpot, we considered organizing as a nonprofit and were counseled that it would be a difficult path because Foundations like to fund projects, not infrastructure. We had a business model that made us marketable and attractive to both end users and brands. When talking to Angels, it was important to emphasize up front that VolunteerSpot was indeed a for-profit company and to present a clear and compelling business case for investment.  Angels make investments, not donations.”
– Karen Bantuveris, Founder of VolunteerSpot



Venture Capital (VC) is institutional funding that comes from professionally managed funds. These funds are quite large (the average VC fund was $127 million in 2010) and are comprised of investment from “limited partners.” Limited partners can be high net worth individuals, pension funds, endowments, etc. Essentially, they are anyone or any institutional investor who puts money into the fund.

The venture capital firm itself is run by “general partners” whose full-time job is to manage the limited partners’ investment. General partners have legal obligations to their limited partners and, as a result, invest differently than angel investors – who are investing their own money.

VCs are looking for high growth companies with opportunities for significant returns. They will be involved with the company to some degree, and will likely participate and help facilitate any follow-on rounds. VC investments, although later stage than the types of investment we have discussed so far, are still considered high risk. The National Venture Capital Association estimates that 40% of companies in a venture portfolio fail, 40% break even or have minimal returns, and 20% or less have significant returns. Given this, VCs expect almost half of the companies they fund to fail, and therefore need to knock it out of the ballpark on a few big wins in order to generate good returns for their limited partners.

In 2012, venture capitalists invested $27 billion in 2,793 deals. As the numbers suggest, these deals are significantly larger than angel investments. The average deal size is $4.7 million for early stage, $9.8 million for expansion stage, and $10.3 million for later stage companies.

There are hundreds of venture capital funds. Below is a list of funds with an impact focus:

City Light Capital
DBL Investors
Gray Ghost Ventures
Invested Development
Kapor Capital
Renewal Funds
Unitus Impact

If this guide as a whole is an “aerial view” of the for-profit funding landscape, the VC Section is a “view from space.” In the event that raising venture capital is part of your long-term strategy, you have a lot more research and work to do than just reading this guide. That said, here are a few things to keep in mind at this stage in the game.

While venture capital is a hot topic of conversation among founders in the startup space, most companies will never need or receive venture financing. A somewhat colorful title on, “Why 99.95% of Entrepreneurs Should Stop Wasting Time Seeking Venture Capital,” highlights the disconnect between the fascination with venture capital and its relevance to most startups.

Only 0.05% of entrepreneurs – across sectors – go on to raise venture capital. With the additional complexity of social enterprise, these numbers are much smaller in the social venture community and there will be far fewer companies that “look like you” in a VCs portfolio. While there are definitely examples of social ventures that have received venture capital (like Warby Parker, Zipcar, and DailyWorth), like any type of funding, you should evaluate whether this is a likely scenario for your business before investing a lot of time and effort courting VCs.

So, let’s say you have raised an angel round or two, have significant traction and an amazing team, but you still need a lot more money (something to the tune of $5 – $12 million) and are willing to give up a significant amount of equity in exchange. It’s at this point that you need to ask yourself if venture capital is right for you. Do your own due diligence on your prospective investors and build a great team of trusted advisors and mentors to help coach you through the process. Given the amount of money they will be investing, VCs will be receiving a significant amount of equity and, with the addition of a board seat, they will have fiduciary responsibilities as well as control-levers in your business. This can be a great thing, your company may really need high-level expertise and mentorship to grow in addition to large amounts of capital, but it is also something to think about and be aware of. There’s no free lunch.

Words of Wisdom

Financial investments buy you time to build up a thriving, profit-generating business. It’s not about chasing money, it’s about building infrastructure to make money. Looking to raise venture capital? Here’s some advice from a Y-Combinator alum and social entrepreneur:“Traction, traction, traction – that’s your lifeblood, nothing else matters, if you’re doing anything [trying to raise money] that doesn’t lead to traction, you’re wasting your time.”
– Edrizio de la Cruz, Co-Founder of Regalii


Now that you have received an overview of the types of investment capital that are available, it’s time to take a look at your business. Time is one of the most valuable commodities in an early stage company. You want to move things forward as quickly and strategically as you can, so that you can keep the boat afloat when you have minimal resources and barriers to entry.

Pitching is not something that happens only at one stage in your company’s life, it is ongoing. As the founder, you will always be pitching. At different phases, what you are pitching for and who you are pitching to will change.

Something I have seen over and over again with early stage entrepreneurs is a lack of awareness of what kind of business they are building and what types of financing are appropriate for it. If you are spending time pitching for and preparing to pitch for angel investment, you should have a company that angels will invest in (think: high growth, large scale, existing traction). If you don’t, map out what types of financing you will need and spend your time working on that.

The Pitch

While there are a lot of investor-specific criteria, there are some general commonalities between what early stage investors are looking for. Below is a list of questions/topic areas that you will want to answer in your pitch.

The following are all topics that you will want to cover in your pitch and have a dedicated slide in your deck:

Team: Who is building this business (experience, skills, network, track record)? What makes them the best people to run this business? How does the team work together? Have they collaborated or worked together in the past? Are they coachable?

Problem: What is the problem you are trying to solve? Is there data or an anecdotal story that can illustrate your point?

Solution: How does your company solve this problem? Why is it an amazing, unique approach?

Competition: Who are your competitors? (Yes, you have competitors. Saying, “We have no competitors,”” is one of those red flags for investors). How well do you understand the market you are operating in and the landscape? Who are the big players? What are they doing that is similar to you and what are they doing that is different from you? Who are the smaller players or startups? Why have they been successful or why have they failed? How are you differentiated from them?

Advisors: Building a startup is difficult. Most successful entrepreneurs have built a network of advisors who are able to provide candid feedback, advice from experience, and support through the good and the bad times as well as open otherwise closed doors. Sometimes advisors are just lending their names as an indication of credibility or social proof of your concept. In any event, successful entrepreneurs are engaging with more experienced players in their field to help them build and grow their companies. Who are your advisors and why are they the best people to help you build this business? Your advisory team can also be an indicator of “traction” or social proof as well as your tenacity as an entrepreneur. If you manage to get Jane Goodall on your advisory board for your chimpanzee food company, you can see what type of message that might send to potential investors and buyers, for example. You don’t necessarily want to have a list of only “celebrity” advisors lending their names and not being actively involved in your business. You need advisors who will pick up the phone at 11:00 pm on a Thursday because you had a production meltdown or need to prep for a big last minute presentation you were invited to with a big potential client or venture fund.

You may not need to include the following slides or necessarily discuss them in your presentation, but be prepared to answer questions from investors about the following topics.

Exit Strategy: An exit strategy is a strategy of how you are planning to return capital to your investors. In the traditional startup world, exits are where the big return on investment happens. A good exit is what VCs are looking for because this is where they are going to make their money back. Traditional exits are usually mergers and acquisitions (your business is bought by or merged with another company) or an initial public offering (your company’s private stock gets sold to the public on the stock market). In the impact space, there is definitely room and need for nontraditional exit opportunities (particularly since traditional exits will not be appropriate for many social ventures), so you may want to think of alternative ways to return capital. What types of exit opportunities to do you see for your business?

Leadership Succession: Often the people who are best at working on a scrappy, two-person team with little resources are not the same people who should be sitting at the helm of a 1,000-person company. What is the succession strategy for the founding team? Again, you probably don’t need to have this ironed out in a specific plan, but showing that you have thought about these types of issues helps investors see how you are thinking about your company’s future.

Valuation: Valuation is a number that defines how much your company is worth at a given time and will determine what percentage of equity investors get for their investment. A valuation conversation is usually a negotiation with investors and they will want to know what number you have come up with. Be very careful with this and make sure you have received a lot of behind the scenes feedback from experienced individuals before throwing around a valuation figure. This can come back to bite you, especially if you set a valuation that might be unreasonably high or low and/or if you go back to investors with a different valuation one month later. For very early stage companies, you may not need to set a valuation, but be prepared to discuss why you haven’t set one.

Words of Wisdom

“The most important piece of advice I can give to companies looking to raise capital is to recognize the importance of doing your due diligence on the investor just as they are evaluating you. Not all money is created equally – you want investors who believe in *you* and your vision first and foremost, as they’ll be supportive during both the ups and downs of the entrepreneurial rollercoaster.”
– Jennifer Medbery, Founder of Kickboard

Social Good Guides (SGG): How do you research investors to meet? Do you cold call?

A. Lauren Abele (ALA): There is a lot you can do to research investors.

Your Mission and Vision:

As obvious as it sounds, make sure you are very clear about the mission and vision of your company. You will be spending a considerable amount of time trying to find out who will be most interested in investing in your company. If you are unsure about the impact you’re looking to create (or haven’t articulated this in a compelling way on your website and beyond), you could waste time by not identifying appropriate prospects.


In the beginning, people usually know no one and have few connections. Conferences can give you an opportunity to network with players in your field.


Much of raising capital is based on relationships. Expect to hit the streets, meet with people in your network, and let folks know you are raising money. You may want to approach potential investors first as informal advisors. Your best leads will be warm introductions from people in your network. Remember that you are “always pitching” and your next big introduction could come from someone you meet in line at your local coffee shop or at a dinner party.

Investor Databases:

Websites like Angel List and Gust provide profiles of angel investors and will include their past investments so you can get a sense of what types of deals they invest in and their existing portfolio.

Social Media:

Many investors have blogs or use Twitter. You can learn a lot about them by reading what they post. Often investors who do use social media will be annoyed if they put things online in a public forum (for instance, “I don’t invest in anything outside of NYC.”) and you approach them with a company, idea, or team that doesn’t comply.


Some investors will be impressed by your drive, others may not respond or may be very annoyed. Remember that investors are bombarded by entrepreneurs and receive hundreds, if not thousands, of emails with decks attached. In this case, I would say it’s more of a “cold-email.” The most important thing is that you definitely want to do your homework first (research the investors) and not waste their time (be prepared and professional). Have a really solid and easy-to-flip-through ten-slide deck and/or a one-liner that you can send to get investors’ attention. If they are interested, they will want to hear more. If you send them too much stuff (a business plan, an executive summary, a deck with tons of text), they won’t look at it.

SGG: What are some social spaces that offer great potential introductions?

ALA: Networking events and conferences in the startup space can be a great place to meet people. I would also suggest heading to any pitch event you can go to. You will get to meet investors and other entrepreneurs as well as learn a lot just by watching companies pitch.

SGG: What is the most common question asked after a social entrepreneur pitch?

ALA: The two most common questions I have heard at pitch events are: (a) who is your competition? and (b) what is your revenue model? A third might be a question to the social entrepreneur asking her to clarify where she got her numbers for reference in her deck. Where did you get those numbers (for market data)? Understand your market and do your homework.

SGG: What do you identify as a major obstacle for startup social entrepreneurs seeking seed funding?

ALA: I think there are a lot of obstacles for social entrepreneurs seeking seed funding. There are two main ones that stick out to me. First, the fact that the investment ecosystem for social ventures is really fragmented and quite nascent. An important thing to remember is that seed funding is just a means to create a financially sustainable (and hopefully profitable) business. Many social entrepreneurs that I see have a great social vision or mission, but really lack a business model. Ideally, your business can attract not only impact investors who really care about the social mission, but also traditional investors who recognize the market opportunity. A big part of reaching these groups effectively is by knowing how to pitch your business to different audiences.

The second major obstacle is the lack of a precedent. Any social entrepreneur coming on the scene today is part of building out this field, whether they like it or not. That involves a bit of an uphill battle in terms of education and proving that combining impact and profit can be done.

SGG: What advice would you give to someone who does not know a lot of investors in New York, or anywhere for that matter?

ALA: Start networking. As the founder of your company, you are its #1 evangelist. You will need to develop relationships (whether they are investors or not) in order to survive and thrive. I would also be clear about how your business will grow if you are not able to attain investment either right away or ever. If you are waiting and waiting for an investment to put things into gear, you may be wasting your time.

I love Edrizio’s quote at the beginning of the guide on this topic. He says: “Build traction and money will come.” Focus on building a great company, not on chasing money. You can read more of Edrizio’s words of wisdom here: “12 Inalienable Truths I Learned at YC,” by Edrizio de la Cruz, October 2013.

SGG: At what stage should you seek angel money?

ALA: If after educating yourself about all the options for startup capital, you think angel financing is the route for you to take, I would begin that process as early as possible. You may not necessarily be pitching for funding out of the gate, but start to build relationships with prospective investors and lay down the foundation for an angel pitch so you can get there faster. For example, doing the right research, finding advisors, and understanding what metrics investors will be looking at.

That said, most angels will want to see some sort of traction, prototype, or pilot/beta completed before making an investment. Focus on hitting some of these milestones and you will probably have a faster conversion (from initial contact to money in the bank). Check out the Angel Resource Institute’s list below:

“In general, the best time to seek angel funding is when:

• Your product is developed or near completion.
• You have existing customers or potential customers who will confirm they will buy from you.
• You’ve invested your own dollars and exhausted other alternatives, including friends and family.
• You can demonstrate that the business is likely to grow rapidly and reach at least $10 million in annual revenues in the next 3-7 years.
• Your business plan is in top shape.”

SGG: For a for-profit social impact company, what data is most compelling for an investor?

ALA: It really depends on your business model, your industry, and what type of social impact you are proposing to make. Early stage investors will be looking for both financial metrics such as projected revenue and for non-financial metrics like page visits given that most investment-backed startups won’t break even for a while.

I would suggest talking with people who focus on deals in your space to get a sense of what they are seeing and what they look for. For instance, I spoke with a later stage VC who specializes in digital media to get a sense of what types of monthly page views were healthy for a content-based platform. She sees a lot of different types of companies, and therefore, she was able to share a great birds-eye view with me.

SGG: If there is no clear revenue model yet (i.e. advertising), is it still okay to start raising funds?

ALA: For starters, if advertising is your only proposed revenue model, you may want to go back to the drawing board. “Advertising” is one of those things investors hear all the time and is a rather difficult revenue model to pull off successfully, as you will need a lot of monthly visitors to make any money. It becomes a bit of a red flag.

There are examples of startups, like Twitter, Instagram and Pinterest that grew without a revenue model. These companies are mostly – if not exclusively – tech startups with either very significant traction and/or a talented team that ended up being “acqui-hired” as an exit. You can obviously do whatever you want, but I personally think raising capital without a revenue model is a not very strategic move. I imagine you would have a very difficult time raising money from professional investors, unless you are Jack Dorsey or Mark Zuckerberg. While you may have an easier time getting friends and family money than professional money, would you really feel confident taking the hard earned cash of your loved ones without an idea of how you will ever pay them back?

Remember that the end goal is building a business, not raising money. The revenue model you start with may not be the revenue model you end up with, but you want to start thinking around how you can monetize your idea.

SGG: What percentage of equity should you give away for the first $500k-$1M?

ALA: If you are doing an investment in exchange for equity, the amount of equity is based on your company’s valuation (how much you and your investors agree your business is valued at). Valuation is a tricky subject. If you aren’t familiar with it, spend some time learning about how valuation works and how much comparable companies in your space have been valuated.

SGG: Do you need to show an exit strategy?

ALA: I would suggest outlining potential exit opportunities as part of your pitch or at least be prepared to answer these questions in a Q + A. Again, this may depend on your audience and how far along you are. While investors know that this is most likely not how things will turn out, it shows them how you are thinking about growing the business, where your sites are set, and how well you understand the industry you are operating in.

For instance, if you are suggesting that a possible exit opportunity for your organic tea company is to be purchased by Hain-Celestial, you can show recent comparable acquisitions Hain-Celestial has made and try to find an executive from Hain-Celestial to serve on your advisory board. That scenario is telling a very compelling story about how you are strategically positioning your company and your intention to get your investors a return.

Another thing to note: Investors may also want to get a sense of your degree of “founder’s syndrome.” Will you be willing to step down if/when a more experienced CEO should replace you, or will you insist on running the show? In other words, as you see it now, is this is your “baby” forever?

SGG: Which types of funding come with strings attached?

ALA: As a former economics student, I would have to say, “There is no such thing as a free lunch” and, by default, all types of funding come with strings attached. Different types of funding come with different opportunities, but they also come with different responsibilities and possibly some not-so-positive baggage.

Do your homework. Not all investors are the same. To get some firsthand insights, you can ask other entrepreneurs about their experience with a specific investor, VC, or accelerator. A lot of entrepreneurs write about their experiences. There are a number of resources at the end of this guide that you can look through as you explore funding opportunities. For instance, in “Five Tips for Asking Friends and Family for Money,” (Eileen Gunn, Entrepreneur, May 2011) one entrepreneur shares advice on how to deal with friends and family investors. He sent out an update email once a month to avoid having all of his personal interactions turn into informal business meetings. Do you want to spend your Friday night out with friends or your family vacation to the beach talking about your P+L (profit and loss) statements?

SGG: Which types of funding are most appropriate for social entrepreneurs looking for seed capital?

ALA: I would say that it really depends on your business. Different types of businesses have very different capital needs and different types of founders have really different resources available to them. Refer back to the section on “Preparing to Pitch” for help.

SGG: What is the distinction between a company being worthy of investment vs. ready for investment?

ALA: This may feel like a cop-out, but what makes a company “worthy of investment” is really in the eye of the beholder. Early stage investing from individuals is extremely personal. A company may be worthy of investment just because your friend or sister is the founder. To a particular angel investor, one company may be worthy of investment over another simply because they prefer to do deals in that space (say, ecommerce). Different types of investors look for different things. Likewise, a company’s readiness for investment is a very individualized process and depends on the type of investment. Check out the infographic and accompanying article, “How Funding Works” by Funders and Founders for a sense of typical milestones for each phase of investment.

SGG: How can entrepreneurs earn the trust of investors?

ALA: I would say that most investors probably start from a place of trusting you. Investors will not bother spending time with you if they don’t trust you. So, don’t give them any reason to make them doubt that you are a trustworthy and ethical professional.

Don’t lie or try to hide the truth. Professional investors will do thorough due diligence and find out everything they need to know before they’ll make an investment.

If you burn a bridge in the investment community – especially by being dishonest – good luck trying to raise capital again. This is a small community and people talk.

It’s very important that you don’t include false information in your deck (for instance, inaccurate or unverified data, fake advisors, etc.). People will try to track down your advisors (assuming they don’t already know them personally) and get their opinion of you. Again, this is a small community.

Lastly, be yourself. Investors will get to see your business through all types of ups and downs.

SGG: What are the opportunities for those seeking capital (or donations!) to prove themselves over time so they don’t have to start with a cold ask?

ALA: Leverage your network. This is the best advice I can give you. The best introductions are warm introductions. Use LinkedIn to see if you can find a connection. And, if that is not an option in certain circumstances, don’t be afraid to make a cold call. There are plenty of cold call success stories out there, too. As an entrepreneur, you have to do what it takes. You just want to be as strategic and thoughtful about it as possible.

And, along those lines: Always be pitching! You work for yourself now and the lines between your business and personal life are blurred. Your next investor could come through someone you met briefly at a wedding or a holiday party or even at the dog park.


As you can see from this guide, there are lots of moving parts when it comes to financing your company and lots of ways to go about it. Here are the most important things to remember:

1. It’s not just about the money. Always be looking for the nonfinancial opportunities from funders.

2. There are no free lunches. Everything comes with a cost.

3. Investors do not want to invest in “fair-weather entrepreneurs.” They want to support someone who is going to be there through the rough times, not someone who will take the best job offer they can find when things get tough or money runs out.

4. Consider what happens when your money runs out. How far are you willing to go and where do you draw the line?

5. Fundraising is a means to an end: a functional, profitable business. Funding is a stop-gap to get you to profitability. Focus on building your product, acquiring users and refining your revenue strategy. This will make it easier to fundraise, give you more ground to negotiate, and perhaps even allow you to build with less investment.




The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, by Noam Wasserman
The Startup Owner’s Manual, by Steve Blank
The Lean Startup, by Eric Ries
Angel Financing for Entrepreneurs: Early-Stage Funding for Long-Term Success, by Susan Preston
Pitching Hacks: How to Pitch Investors


Funders and Founders: This is a “visual startup blog” that combines useful articles with detailed infographics on topics like valuation, how startup funding works, and how to think like an entrepreneur.


Echoing Green’s Funding Social Enterprises


“130 Ways to Fund Your Social Venture” by Tristan Pollack. Social Earth. January 2011.
“Where can I find funding for my social enterprise?”, Social Entrepreneur Guide.
“Start-up Capital for For-Profit Social Entrepreneurs: Where the heck is it?” by Rachel Chong. Huffington Post. October 8, 2009.


How Funding Works: Splitting the Equity Pie with Investors by Anna Vital, Funders and Founders, May 2013
This post has a great graphic on the startup investment process.


SOCAP holds an annual conference each fall in the Bay Area that is a who’s who in impact investing—as well as a number of spin-off events throughout the year.



The Bootstrapper’s Bible: How to Start and Build a Business with a Great Ideas and (Almost) No Money, by Seth Godin


“The Beauty of Being Bootstrapped,” by Sam Chandler, Forbes, July 2012
“Self Finance or Raise Money? A Quandry for Start-Ups,” by Ian Mount, New York Times, June 2013
“Self Financing Your Startup,” Entrepreneur
“Some Ways to get Started as a Social Entrepreneur,” by Susan Moran, New York Times, June 2011



“11 Things Not to do When trying to Raise Capital from Family or Friends,” Under30CEO, May 2012
“Financing Options: Friends and Family,” by Fred Wilson,, May 2011
“Entrepreneurs: If You Love Your Family, Don’t Let Them Invest in Your Startup,” by Mitch Free, Forbes, April 2013
“Five Tips for Asking Friends and Family for Money” by Eileen Gunn, Entrepreneur, May 2011
“Fundraising From Friends and Family,” by Dyan Machan, The Wall Street Journal, August 2010
“Friends and Family: A Huge Source of Capital for US Startups,” by Bill Payne
“How to Raise Startup Funding from Friends and Family,” by Christina Farr, VentureBeat, March 2013
“Funding 101 Part 7: Friends and Family,” by Elizabeth Crowell, The Next Women, October 2013



“Global Crowdfunding Volumes Rise 81 Percent in 2012,” by Kylie MacLellan, Reuters, April 2013
“The $5.1 Billion Future of Crowdfunding is More than Kickstarter,” by Ben Schiller, Fast Company, April 2013
“In its 3rd Year, Kickstarter Successfully Raises Over $199 million, taking home $6 in commission,” by Benjamin Jackson, The Next Web, April 2012
“Top 10 Crowdfunding Sites for Fundraising,” by Chance Barnett, Forbes, May 2013
“Top 100 Crowdfunding sites for Equity-based, Rewards-based Perks-based and Donations-based Fundraising Campaigns,” by Robert Hoskins, CrowdfundingPR, June 2013
“Crowdfunding Press Center Releases the First Global 100 Crowdfunding Web Site Index,” by Robert Hoskins, CrowdfundingPR, June 2013
“11 Innovative Crowdfunding Platforms for Social Good,” by Christie Marchese, Mashable, October 2011
“10 Crowdfunding Sites to Fuel Your Dream Project,” by Alvaris Falcon, Hongkiat
“Crowdfunding Market grows 81% in 2012: Crowdfunding Platforms Raise $2.7 Billion and Fund More Than One Million Campaigns, Finds Research Firm Massolution”, PRNewswire, April 2013
“The Case for Crowdfunding: LuminAid Lab,”, May 2012


The U.S. Securities and Exchange Commission (SEC): Jumpstart Our Business Startups (JOBS) Act
The Crowd Café: This site has provides links to various resources relating to crowdfunding as well as crowdfunding data.



“What Corporate Incubators and Accelerators Mean for Your Business,” by Matt Villano, Entrepreneur, October 2013
“How Corporate Incubators and Accelerators Work (Infographic),” Entrepreneur, October 2013
“Why Every Company is Now an Incubator,” by Issie Lapowsky, Inc, December 2012
“Start-Up Accelerator and Incubator Programs for Social Entrepreneurs,” Innov8Social, October 2011
“One-Stop Incubators Hatching Social Enterprise startups,” by Anne Field, Forbes, April 2012
“12 Inalienable Truths I Learned at YC,” by Edirizio de la Cruz, October 2013
“5 Social Enterprise Incubators and Accelerators You Should Know About,” by Melissa Ip, Social Enterprise Buzz, October 2012
“Accelerator vs. Incubator: What’s the difference?” by Christina Desmarais, Inc., February 2012
“Help for Startups! A Semi-Complete List of Startup Accelerator Programs,” by Robert Shedd, January 2012
“How to Choose an Incubator,” by Darren Dahl, New York Times, January 2011


National Business Incubator Association
Seed-DB: List of Seed Accelerators



“Unscrambling ‘MRIs’ and ‘PRIs,'” by David Levitt, Philanthropy Journal, April 2011


“Mission-Related Investing for Foundations and Non-Profit Organizations: Practical tools for mission/investment integration,” Trillium Asset Management, 2007
“Doing Good with Foundation Assets,” by Steven Lawrence, The Foundation Center, 2011
“Key Facts on Mission Investing,” by Steven Lawrence and Reina Mukai, The Foundation Center, 2011
“Philanthropy’s New Passing Gear: Mission-Related Investing. A Policy and Implementation Guide for Foundation Trustees,” by Steven Godeke and Doug Bauer, Rockefeller Philanthropy Advisors, 2008


U.S. Internal Revenue Service: Program-Related Investments



Angel Financing for Entrepreneurs: Early-Stage Funding for Long-Term Success, by Susan L. Preston (Available on


“When Should I Approach an Angel Group?” by Angel Resource Institute Team, January 2013


Angel Capital Association (ACA) The ACA is the trade association for the angel investing community.
ACA Member Directory This is a directory of the angel groups in the U.S. ad Canada.
Angel Resource Institute (ACI) ARI is a non-profit organization that provides information and education on best practices in angel investing.
ARI: Pitching to Investors ARI provides some great resources and information for entrepreneurs preparing to pitch for angel financing.
• Inc’s: “How to Find an Angel Investor” This is a curated list of Inc. articles on finding and pitching to angel investors.



“Venture Capital Trends by State, Industry (Infographic),” Entrepreneur, October 2013
“Your Secret Decoder Ring for VC Speak,” by Sharon Wienbar, Entrepreneur, October 2013
“Impact Investment: Just 1-2% of Venture Capital, says Arun Gore” by Esha Chhabra, Dowser, June 2013


National Venture Capital Association The site has lots of information and resources related to venture capital, including sample term sheets.
NVCA: Venture Capital and Social Entrepreneurship


Echoing Green: Impact Investing



“Regalii Is Changing the Way People Send Money To Family Abroad, Using Mobile and Gift Cards,” by Ingrid Lunde, TechCrunch, September 2013


A Legal Primer for Changemakers
Accounting & Taxes for Social Enterprises: Your Journey Starts Here
Business Plans and Planning for Social Enterprises and Nonprofits
Nonprofit Funding and Long-Term Sustainability
What’s Strategy Got To Do With It?

The guides are primarily intended for social entrepreneurs based on the United States, though some of the resources may be generally of interest to an international audience. Please remember that many of the topics covered by the guides, such as corporate structures, laws and legal customs, accounting, business planning, funding and fundraising, etc., vary widely from country to country, and that the information presented here may not be correct, applicable, or relevant to any other country or jurisdiction.

We strongly advise those of you building social impact ventures outside the United States to seek advice and support from reputable professionals who are licensed in your jurisdiction, and/or have area expertise in the country where you plan to build your businesses. For more information, please see our Terms of Use.



Founder + CEO, HIRO
Website | Email | LinkedIn | @laurenabele |

A. Lauren Abele is an entrepreneur passionate about accelerating growth for early stage companies through scaling, strategic planning, sustainable revenue models, and fundraising strategies.

Her most recent endeavor, HIRO, is a community-driven concierge for those in search of active lifestyles. As the Founder and CEO, Lauren launched HIRO with the belief that fitness should be fun and engaging. With nearly a decade’s worth of experience within the fitness and outdoor community, Lauren is providing a different perspective on sports and outdoor adventure.

Previously, Lauren was the Founding COO and Partner at the Pipeline Fellowship, an angel investing bootcamp for women. As a core member of the founding team, Lauren played a major role in building the high-profile company from its first angel investing bootcamp in April 2011. During her tenure, the Pipeline Fellowship trained over seventy women who committed more than $350k in investment and expanded to multiple cities across the United States.

Having worked in the nonprofit and public sectors in economic development, environmental issues, and women’s empowerment, Lauren is a long-time environmental sustainability advocate. In addition, Lauren has analyzed the Kyoto Protocol with the U.S. Department of State in Brussels and worked on environmental projects in both Spain and Australia.

Lauren has a BA from Washington University in St. Louis and an MPA from Indiana University’s School for Public and Environmental Affairs (SPEA). Outside of the office, you can find Lauren surfing at Rockaway Beach, walking around Brooklyn listening to audiobooks, or waiting for the next Star Trek movie to come out.



Associate professor in the graduate division of the Communications Design department at Pratt Institute

Jean Brennan is an associate professor in the graduate division of the Communications Design department at Pratt Institute. Jean has taught and developed curriculum around design for social impact, working with students to create platforms for participation and intervention. Each year, she acts as a thesis adviser to graduate students, helping them to chart a meaningful contribution to the field of design. She also teaches classes examining how we make meaning and narrative using kinetic, sound, text, and image.

In 2011, Jean co-founded Public Project, an initiative that promotes the use of design to create conversations in the public sphere by organizing engagements with outside institutions, artists, and nonprofit organizations. Centered around the theme of social practice, students engage in opportunities to apply design to real world challenges.

In her own work, Jean is interested in the space between art and design exploring poetic ways of engaging the public on issues related to the environment, community, and making things. Jean holds a BA from University of California at Santa Cruz in World Literature and Cultural Studies and a MS in Communication Design from Pratt Institute. In 2003, she completed an apprenticeship at the Center for Agroecology and Sustainable Food Systems (CASFS) at UCSC. She lives with her husband and two children in Beacon, NY.

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Consultant and Strategist, Social Good Guides
Website | LinkedIn | @think5577

As a Design Strategist and Creative Facilitator, Marc focuses on human-centered design and social innovation. Marc organizes, plans, and leads creative workshops to create positive change and tackle some of today’s gnarly social challenges.

Through playful exercises, he helps people come up with fun, usable, and innovative solutions to challenges. With a graphic and web design background, Marc is able to put ideas generated from these workshops into action, which continues conversations and encourages further collaborations across multiple industries. He loves finding ways for organizations to make huge changes and impacts in unexpected places.

Since 2009, Marc been actively involved, as both an advisor and facilitator, in Project M, an immersive program designed to inspire and educate young creative individuals by proving that their work can have a tangible impact on the world.

A multitude of his collaborative workshops and projects have been featured in the New York Times, Fast Co, AIGA, GOOD, Print, ID, PSFK, and various other design and culture outlets. Marc has lectured and facilitated numerous workshops at a number of distinguished universities and conferences throughout the country. Among other things, Marc is building out Secret Project @ CCA along with teaching in the graphic design department, and leading GOOD SF. He also rides a bamboo bike, makes homemade hot sauce, and unplugs in the outdoors. You can follow him on Twitter, @think557

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Founder, Social Innovators Collective
Series Producer, Art Director and Editor, Social Good Guides
Website | Email | LinkedIn | @shanadressler | @sic_org

In 2011, Shana Dressler founded the Social Innovators Collective with the mission to train and nurture the next wave of social change leaders to help them achieve measurable impact and financial sustainability. Since then she has been creating and leading workshops on business development for social enterprises and nonprofits at General Assembly, New York’s premiere center for entrepreneurship, the Social Good Summit, and social enterprise conferences at Harvard, Columbia, New York University, Brown, the School of Visual Arts, Rhode Island School of Design, and others. In 2014, she designed the curriculum for a startup business school designed to support 21st century entrepreneurial problem-solvers and creatives tackling the most pressing social and environmental challenges of our time.

A deeply committed social entrepreneur, Shana is widely recognized as the first person in New York to organize rigorous educational programming for social entrepreneurs in startup mode. To fill a notable gap in the lack of resources available, Shana co-created the Social Good Guides, a series of 20 guides focused on the essential small-business skills that would-be changemakers need to know and an 8-week workshop called Social Good Startup: Idea To Launch.

Shana is an Aspen Institute Scholar, a member of the International Academy of Digital Arts and Sciences, and a judge for The Webby Awards. In 2014 she became a Delegate to the United Nations Foundation Global Accelerator which brought together a “100 of the world’s top entrepreneurs to work together with policy leaders on global issues.” Shana was recently honored by the World CSR Congress as one of the 50 Most Talented Social Innovators. In addition to frequent travel to far-flung places, Shana loves all things chocolate, and makes her way around New York on a midnight blue Vespa. You can follow her @shanadressler and @sic_org.


Project Manager: Shana Dressler
Copy Editor: Jessica Winney
Web Developer: Keyue Bao
Consultant + Strategist: Marc O’Brien
Series Producer, Art Director + Editor: Shana Dressler

For more Social Good Guides, visit

Three years in the making, the Social Good Guides are the result of the generous contributions of a team of esteemed authors, designers, copywriters, proofreaders, project managers, marketing consultants, researchers and interns. Initially conceived as a “nights-and-weekends” labor of love, the project quickly expanded beyond its original scope once we realized that accessible information about the essential small-business skills needed to build sustainable social impact organizations was missing in the social impact space.If you would like to make a general donation so we can finish the last four guides, click here. If you received value from reading this guide, and you would like to make a donation click here.

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Guide © 2015 A. Lauren Abele
Cover © 2015 Jean Brennan
All other graphic design and elements © 2015 Social Innovators Collective.

All rights reserved. All guides have been created for private use. No part of this publication may be reproduced, distributed, published, transmitted, photocopied or stored by third parties for download or for sale in any form or by any means, including electronic or mechanical methods, except with the written permission of the publisher, the Social Innovators Collective. Please see our full Terms of Use for more information.

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