How to Measure Impact

How to Measure Impact

June 21, 2022 by investor

How to Measure Impact

Impact startups provide not only a product or service but also a social or environmental impact.

Impact startups need to know how to measure their impact in addition to their financial return.

Here are some ways to measure it:

The startup could measure the impact for each unit sold.

This works well when the impact is the same for each customer.

An example would be a bottle-less solution for water distribution.

The startup could measure the impact based on a sample and then extrapolate across the entire business.

This works well when the impact is not exactly the same for each customer.

An example would be the graduation rate of a student through an education program.

The startup could look at comparable solutions with a stated impact and adopt those metrics.

An example would be the reduction in carbon emissions based on reduced fuel usage. 

The startup could apply that metric to their own user base.

Impact investors will look for impact metrics from the startup, so it’s important to measure and track it.

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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.