What happens when you let eleven impact investors pitch their investment offers in front of an audience of social start-ups for a change?
Well, first, you get a line-up of mostly white male CEOs. Second, you attract a lot of other impact investors eager to find out how well their colleagues are faring. Third, you get some interesting clues about what impact investors think is relevant for their potential investees.
Here are four takeaways from the Reversed Pitching session during ImpactFest 2019, which was hosted by the European Venture Philanthropy Association and ImpactCity on November 5th. Just to give you an idea, pitchers included impact investors like DOEN Participaties, SI2 Fund, 4Impact, Mercy Corps and Investisseurs et Partenaires.
1. Impact investors like hard aggregated facts
With the exception of one investor, who actually apologized for not really having much money to invest, all the pitchers proudly presented their latest figures on total investments made, number of funds managed and/or the number of companies in their portfolio. I guess it’s just natural for investors to come up with such data, and there is nothing wrong with it. However…
2. Start-ups rather want to know what it is like to work with a particular investor
At some point, one of the social entrepreneurs sitting close to me sighed that she was dying to hear something about how investees value their relationship with the impact investor. This is actually something that entrepreneurs in general find important. But in case of impact investing and venture philanthropy it is absolutely key, because of the high-engagement nature of investor involvement. Most pitches did not move beyond merely sketching the types of non-financial support they offer. Only a couple spiced up their pitches with some material on how they get along with the teams they invest in.
3. Wasn’t there something called a ‘unique selling point’?
When I discussed the pitches with a small group of young entrepreneurs afterwards they concluded that they were left in the dark about what sets a particular impact investor apart from the others. Entrepreneurs are always told to underline, underline, underline their unique selling point in pitches. But in reversed pitching many of the investors forgot to be clear about their unique proposition to the start-ups. There were some notable exceptions, of course, of pitchers who did give it a shot: “we start to invest early and we’re patient” or “we’re for entrepreneurs who are in love with solving a social problem”.
4. But still, impact investors know the true value of a pitch
One of the best measures of a successful pitch are the number of people that flock around a pitcher after the event. In this case many members of the audience (and the pitchers) hung around for at least another thirty minutes, allowing the impact investors to do what they are probably best at: networking and scouting new potential investees.