No matter how much nonprofits try to incorporate the world of finance into their work, it’s rare that venture capitalists, grant makers and social entrepreneurs meet together to discuss their work.
That’s why the Unreasonable Institute, a three-year-old social venture, brought 75 investors and grant makers to Boulder, Colo., this summer to spend two days with social entrepreneurs attending a six-week boot camp on getting an enterprise off the ground.
The 22 social entrepreneurs came from five continents; some work on for-profit ventures, others on nonprofits projects. Among their missions: helping farmers in Africa get better crop prices; inventing more efficient stove tops for people in developing countries; turning waste into fuel; and recycling plastic bags into high-fashion products.
At the end of the institute’s previous two boot camps, the entrepreneurs piled onto a bus bound for San Francisco to pitch potential investors. Although the effort provided them with feedback, it yielded no immediate investments and little in the way of continuing interactions with investors. So this year, the Unreasonable Institute organized sessions in which investors and social entrepreneurs could work side by side to evaluate and improve the various ventures, and then talk about money.
As I participated in the event and spoke with foundation grant makers and traditional investors, I explored what lessons nonprofits and other social-impact start-ups could learn from this experience. Among them:
Value financial expertise. A compelling social mission and great examples of how an organization has changed the world can only go so far. Sharing sound financial projections, calculating costs and measuring return on investment can be the difference between propelling conversations with grant makers and financiers or stopping them in their tracks, says Jennifer Pryce, managing director of strategic initiatives at the Calvert Foundation.
Be open to feedback. The social entrepreneurs put their passion-filled ideas on the table and opened themselves up to criticism as well as praise. This took courage. But they took the feedback to heart, knowing it would help strengthen their venture, even if it meant a significant shift in strategy.
Explain your project clearly and concisely. The entrepreneurs had two opportunities to explain their work: Each wrote a two-page summary about his or her venture and presented a one-minute “elevator speech.” Based on those presentations, the investors and grant makers chose four social entrepreneurs they wanted to work with over the following two days. If the summary and pitch weren’t clear, an entrepreneur was likely to have missed out on a valuable opportunity.
Find unlikely partners. Meeting new people with shared interests can mean finding unlikely partners and opportunities. This happened over and over again as people worked together, chatted in the hallway, walked to meals and talked over coffee. Especially in these tough times, charities should look beyond the usual candidates to find new allies who can open doors for them.
The Unreasonable Institute’s new boot-camp approach worked: Investors and grant makers made initial commitments of more than $300,000, and some investors were talking about providing as much as $1-million more in coming months. In addition, some have offered non-financial support, such as introductions to potential investors and partners and offers to serve as board members.
How do these lessons apply to your work? Let us know in the comments section below.