How Social Entrepreneurs Who Need Money Can Get Noticed
Hi, Jean Robb here. Whether you're a new business or non-profit we all want to know how to become known in the world of social media. Guy Kawasaki gives some great advice in the video above about Google Plus. Below you'll find some great tips to find the money you'll need for your company and how to become a Social Entrepreneur.
Catherine Clifford| August 10, 2012
“Do good” business owners seeking funding should target investors looking to put their money to work to make positive social or environmental change. But how to get on their radar? One new way to make your company known to these "social investors" is through a new online searchable database for social entrepreneurs. It's called GIIRS, short for Global Impact Investing Rating System. It analyzes a company’s social and environmental performance and rates it against peers. The initial analysis costs between $2,500 and $15,000, depending on your business size. Companies with less than $500,000 in revenue may be able to negotiate special pricing, according to the GIIRS website. Less than a year old, the database is being used by an initial group of about 20 investors and 60 mutual funds. In 2013, any investor will be able to buy a subscription. The database is the product of B Lab, a Berwyn, Pa.-based nonprofit behind the B Corporation certification for benefit corporations, a class of corporation that has a general benefit for society as well as for shareholders.
Related: B Corps: The Next Generation of Company?
There are other ratings services for particular industries, like Planet Rating for global microfinance organizations, but what makes GIIRS unique is that it includes ratings of the social and environmental impact of companies across all sectors, geographies and sizes.
Curious? Here’s a GIIRS FAQ for entrepreneurs.
How does GIIRS work? Interested investors can search through the online profiles of companies seeking capital to find those that fit their criteria. Also, GIIRS partner organizations work to raise awareness of and capital for socially and environmentally beneficial companies GIIRS investor subscribers range from large institutional investors to foundations to wealthy individuals -- and search the network of registered companies for those that fit their specifications. Currently, the GIIRS rating system includes about 250 companies. So far, GIIRS investors have been primarily interested in buying equity in early to growth stage companies, not startups seeking seed funding. Related: Why Eco-Conscious Entrepreneurs Like Method View B Corp as a Badge of Honor
How do I get a GIIRS rating? To be rated, you have to complete the GIIRS assessment, a test to measure your company’s social and environmental impact. The initial assessment, completed by filing out an online form, should take between an hour and an hour and a half. Then you will have to spend about an hour on the phone with a GIIRS representative to go over your assessment. You will have to pay for the rating before it can be finalized. And before you are sent a copy of your GIIRS Impact Report you'll have to deliver a slew of documents for verification. Randomly, one in 10 companies that obtain a GIIRS rating will be selected for a more thorough review, where a third party will look at your facilities, talk to employees, and go over extra paperwork.
How will GIIRS help me get capital? Clarity and visibility. There is a growing interest in sustainable or impact investing. U.S. investors would be willing to put up to $650 billion into sustainable investing today if there were more reliable research on the niche and clients demanded it, according to a recent report from Hope Consulting, a boutique firm in San Francisco. However, financial advisors aren’t always confident on how to make recommendations about what kinds of social enterprises to invest in, the report notes.
Related: Need a Business Idea? Tap Into Lifestyle Trends in the Evolving Luxury Market
Financial services firms are spending a lot on their own research on social entrepreneurs and impact investing. “If we can help make investing in these companies less expensive, then it is another way we can facilitate a greater amount of capital flowing to these companies,” says Beth Richardson, director of the GIIRS program.
As a social entrepreneur, what has your experience been like looking for investors? Leave a comment below and let us know.
Read more stories about: Financing, Raising capital, Social capital, Social Entrepreneurs, Social entrepreneurship
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