Funding Your Startup Social Enterprise


Funding Your Startup Social Enterprise is a guide that forms part of the Social Good Guides, a series of essential small-business guides created for startup changemakers produced by the Social Innovators Collective. Authored by A. Lauren Abele, Founder and CEO of HIRO, this guide serves as an introduction to the various types of startup funding. Some of the insights offered in this guide include how to determine what kind of entrepreneur you are, how to determine what kind of company you want to build, and how to select the funding source that is the best fit for your startup business and your long-term goals (self-funding, crowdfunding, accelerators, incubators, fellowships, MRIs, PRIs, venture philanthropy, angel investment, and venture capital). The guide also discusses how to prepare to pitch your startup to potential investors. When asked what is the most common question asked after an entrepreneur pitch, Lauren responded: “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.” When asked which types of funding come with strings attached, Lauren answered: “As a former economics student, I would have to say that there is no such thing as a free lunch. 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.”


Remember that investors are bombarded by entrepreneurs and receive hundreds, if not thousands, of emails with decks attached.

Below is an excerpt from the Q + A section of the guide.
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 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.

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