What Are the Best Ways to Finance an Acquisition as a Founder Who Cares About Impact?
The Financial Gaps Facing Mission-Driven Entrepreneurs
In today’s investment landscape, mission-driven entrepreneurs are often met with the harsh reality of traditional funding structures that prioritize financial returns over social impact. Consider the case of two powerhouse women developers in Portland trying to bring the Shortstack Mississippi middle-income housing project to life. After facing systemic barriers from traditional financiers, they found success thanks to an impact investor that understood their mission and shared their vision.
This is not an isolated incident. In 2024, only 1% of venture capital funding went to all-female-founded startups, while all-male teams secured a staggering 86%. Yet, studies show that female-led teams statistically outperform by generating 35% higher ROI on average.
This inequity highlights a deeper issue in the investment world: the lack of access for mission-driven businesses to the funding they need to thrive. The good news? Impact investors—those who care about more than just profits—are stepping in to close this gap.
The Unique Challenges Mission-Driven Entrepreneurs Face
Mission-driven entrepreneurs, especially women and BIPOC founders, face unmet needs and misaligned expectations from traditional investors. Their businesses are often undervalued by conventional financial metrics, and their growth trajectories don’t always align with the expectations of venture capital firms focused on high-return, short-term investments.
This disconnect results in missed opportunities for both investors and entrepreneurs who want to make a long-lasting, positive impact. But there’s another way—impact investing.
What Makes Impact Investors Different?
Impact investors differ from traditional investors in several ways:
Long-Term, Patient Capital: Unlike venture capitalists looking for quick exits, impact investors are often patient investors who prioritize long-term growth and social return over short-term financial returns.
Focus on Mission Alignment: They invest in businesses that align with their values, focusing on companies with strong social or environmental missions. Impact investors know that true success means creating both profit and positive impact.
Willingness to Support Entrepreneurs: Impact investors are more likely to take a chance on first-time founders, female entrepreneurs, or underrepresented groups, knowing that the long-term potential is far more valuable than the immediate financial return.
Blake Jones, founder of B Corp and employee owned cooperative, Namaste Solar and President of Kachuwa Impact Fund is an excellent example of an impact investor who embodies this mission. By focusing on investing in real estate and companies that promote societal good, Kachuwa Impact Fund allows its investors—both accredited and non-accredited—to join in making a difference.
Why Impact Investors Are the Right Fit for Mission-Driven Entrepreneurs
Patient Capital vs. Extractive Capital
Traditional investors may push for rapid growth and high returns, often at the cost of a company’s values or long-term sustainability. In contrast, impact investors prioritize sustainable growth. They’re not just looking for a quick exit; they’re committed to supporting long-term impact. This makes them ideal partners for businesses that seek to grow responsibly.Access to Capital for Non-Accredited Entrepreneurs
With platforms like Kachuwa Impact Fund, entrepreneurs don’t need to be an accredited investor to gain access to valuable capital. Non-accredited entrepreneurs can still access capital, as long as they meet the qualifications of sophisticated investors (e.g., having a professional investment advisor).Investing in What Matters Most
Impact investors don’t just look at the financials. They want to see that a company is making a real difference in the world. Entrepreneurs can leverage this focus on social impact to attract the right kind of capital—investors who see value in a company’s mission as much as its bottom line.
How to Find Impact Investors: Key Steps for Entrepreneurs
Start with Mission-Aligned Networks: Seek out networks and funds that focus on mission-driven investing, like Shared Capital Cooperative or Kachuwa Impact Fund. These platforms provide opportunities to access like-minded investors who prioritize social impact.
Leverage Online Platforms and Crowdfunding: Platforms like StartEngine or WeFunder provide crowdfunding options where you can raise capital from a wide range of individuals who care about your mission and are willing to invest small amounts.
Connect with Impact Investor Communities: There are many communities and forums dedicated to impact investing. Sites like the Global Impact Investing Network (GIIN) or Invest for Better offer resources to help connect entrepreneurs with potential investors.
Educate Yourself and Your Investors: The journey of attracting impact investors often starts with education. Learn about the benefits of impact investing and share this knowledge with your investors. The more they understand your mission, the easier it will be to gain their support.
Empowering Entrepreneurs with the Right Investment
For mission-driven businesses, finding the right investors is crucial for long-term success. Impact investors not only provide the capital needed to grow, but they also align with your values and are willing to wait for the long-term returns that your mission promises.
