Fundraising Challenge for a Benefit Corp 

There are many challenges in fundraising for a benefit corp.

Here is a list of challenges:

Because your company must demonstrate a public benefit, you must first set up a business that provides the benefit and can show the measured result.

Many social impact sectors provide tight margins to their suppliers making it more difficult to cash flow a business.

Investors expect the social benefit will continue as promised, so the business model needs to be well structured and in place.

Benefit corps will need to negotiate the terms with the investor which will most likely differ from the founder’s original expectations.

The company must align with the investor’s social impact interests which vary from one investor to the next.

In addition to reporting on your financial results, you must also report on your social benefits impact as well.

It takes a network to raise funding, so you’ll need to build a group of investors who align with your mission.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.