Impact investing means that sizable investments are made into companies or businesses in order to make a positive social or environmental impact in their communities and on the world — as well as make a profit. Investors are similar to venture capitalists, in that they can be a driving force in the success of the company. But success is more than just the economic bottom line — for impact investing, the focus is on the triple-bottom line: people, planet and profit. Managers of mission-driven companies operate their businesses to benefit employees, communities and the environment, as well as shareholders. The success of these companies lies not only in their ability to make a difference, but in also making a profit.
For example, there are more than 3,500 benefit corporations registered in the United States, and mainstream investors, including Andreessen Horowitz and Founders Fund, are investing millions of dollars in these companies. Initial public offerings of some of these businesses will test this corporate structure’s ability to perform in the marketplace, and will prove whether the structure can protect a company’s mission and values as intended. One B Corp, Patagonia, has launched an investment fund called $20 Million & Change with the explicit intent of funding environmentally conscientious startups and helping them qualify as Certified B Corporations.
Another way to create a social investment is through crowdfunding. Sites like Certified B Corporation Kickstarter, one of the first crowdfunding platforms that was founded in 2009, and WeFunder, the first immersive platform for easy socially responsible investing, let supporters of individual businesses, companies and ideas that do good invest their money. CircleUp, a similar fundraising platform for startups, also created the first dedicated B Corp fund two years ago. Investors include the Collaborative Fund, the social mission-focused venture firm. Learn more about ethical investing and the benefits of becoming a B Corp in our free report.
Business Development Bank of Canada (BDC) has been financing social entrepreneurs for several decades. Recently, the company partnered with B Lab Canada to further the conscientious-business movement and provide tools to the social enterprises throughout the country. … Read More