Today, we’ll talk about Impact Investing.

There’s an old saying about angel investors: “They want to make a little money, have a little fun, and do a little good.”

The ‘do a little good’ talks about how investors want to make a contribution to the community with their investment.

Some do it through Impact Investing, which means the startup provides a community service beyond generating revenue and providing jobs. Impact investing is one way to narrow the field of startups to consider for investing.

Each investor has their own set of things they care about, so if you are an impact startup beware — the definition of impact is in the eye of the beholder. Or, as they say, ‘To each his own’.

If you want to invest in impact startups, look for their impact metrics and not just their financial metrics. Financial metrics include cost of customer acquisition and lifetime value of customers, among others. Impact metrics, on the other hand, focus on the community benefit, such as how many students graduated, or a reduction in carbon footprint, or the number of rhinos saved from destruction.

A good impact startup will have some evidence of the benefits they are generating for the community.

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

Let’s go startup something today!

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Disclaimer:
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.