The 4 Bs of Selling Impact to Investors

Social enterprises are set up to create a positive impact on society. But to sustain themselves and continually deliver social good, they need funds. Charities end up raising grants to fund themselves whereas social enterprises that combine charitable and profit-generating activities, have to knock on the doors of impact investors when looking to raise capital.

But it is not easy for social entrepreneurs to pitch to investors given they have to skillfully balance the narrative of creating social good and profitability.

So how can social entrepreneurs put their best foot forward when pitching to investors for funding?

By using the biggest asset that they have. IMPACT.

Here are a few tips on how social entrepreneurs can mine this asset in the best possible way when pitching. I call them the 4Bs of selling impact to investors:

1. BLOW the ‘Impact’ trumpet

I was recently coaching a social entrepreneur who uses technology to help smallholder farmers improve soil health and yields while also providing them access to affordable finance.

When I first looked at the pitch, I was amazed. There was absolutely no mention of the impact they had created. The fact that their work had improved the lives of almost a million farmers was not mentioned at all!

I asked the Founder why he chose to not mention it? His answer was “This is an investment pitch so we thought we should only talk about financials”.

If you are a social enterprise looking to raise investment and you don’t share with potential investors the social impact you are generating, in all its glory, you are doing yourself a massive disservice.

👉🏼 Firstly, it is your core focus, your raison d'être and it needs to be stated as such
👉🏼 Secondly, by just presenting financials and not talking about impact, you are putting yourself in comparison with every other organization in the sector whose numbers may stack a lot better since their primary objective is profit creation
👉🏼 And thirdly, impact investors really want to know!

So, talk about how many beneficiaries you have reached and the difference in their lives your work has enabled. Talk about the impact you have created in the past and the potential change you can generate in the future with the money you are looking to raise. Show the investors that their money will be put to the best use possible if they invest in you.

Go on and BLOW the impact trumpet!

2. BUT not BECAUSE

Many social entrepreneurs talk about impact as an excuse for not generating enough financial returns. “The financial return we offer is only X% because our primary goal is impact generation, not profit generation”.

And that is a mistake.

Don’t make impact an excuse. Make it the 'reason' for investment.

“The Return on Investment is expected to be 20% BUT the Social Return on Investment is 200%. This means that every $1 that you invest in us will help generate $200 of social value annually. With $X mn of your money, we can reach more than 5mn people living in the poorest parts of India in the next 3 years and generate cumulative household savings of more than $80mn”.

Now that’s a powerful impact investment pitch! 

3. Uncover your BLINDSPOT

Investors want to see what is unique about you. They are not as interested in your product as they are in understanding the uniqueness behind it. Yet most social entrepreneurs fail to talk about what makes their solution unique and impactful. What should be front and center of their pitch is the point that is most often left out.

Why is that? Why is it so unobvious to talk about uniqueness?

Because it is a BLIND SPOT.

It is so close to you, so integral to your work, so seemingly run of the mill that it doesn’t even register as something you should talk about.

But if you can uncover this blind spot and present it to investors, their eyes are guaranteed to pop open, hopefully followed by their wallets.

Here is an example:

👉🏼 You: We supply oxygen to medical centers in Kenya

👉🏼 Investor: Ok, nice. Err. Next!

👉🏼 You: We localize oxygen production and employ a milkman distribution model that guarantees oxygen supply to medical centers in the remotest parts of Kenya within 2 hours.

👉🏼 Investor: That’s amazing. Tell me more!

So, take a step back and assess your entire value chain. Think about what you are doing differently. What is unique about what you do that makes your solution effective and impactful.

And once you uncover the blind spot, go to town on it.

4. Be BOLD

And last but not the least, be BOLD in how you position yourself.

Be proud of your work and present it in a way that would make funders want to be associated with you. Show your track record and your future impact potential and demonstrate why you are best positioned to deliver it. Show them why investing in you will help them meet their own social impact objectives.

Make them want you as much as you want them.