Money is the necessary lifeblood of any organization, no matter how socially focused. Startup funding allows organizations to hire staff, purchase equipment, conduct research to develop innovative product offerings, and fuel growth to impact more people.

While startup capital has obvious value for the entrepreneurs raising the money, it also provides a tangible benefit for funders. Impact investors invest in companies as a means to deploy their capital to generate more value––both social and economic––than it would have if it were to sit in the bank.
This guide will focus on how to think like an impact investor in order to maximize your chances of raising funds for your for-profit social enterprise.
You'll learn how to:
  • Prepare to raise capital via equity investment by assessing your readiness and creating a funding plan to suit. 
  • Identify and reach out to mission-aligned potential investors, with clarity on how to craft a thoughtful pitch that resonates––and deliver it with confidence to close the deal.
  • Embrace the inevitable learning process that comes with every unique fundraising journey, from handling rejection to forging strong investor partnerships.
To learn more about the various sources of funding, including the pros and cons of crowdfunding, loans, and grants, read our Ultimate Introductory Guide to Funding Your Social Enterprise. If you are seeking fundraising advice for your nonprofit organization, read this guide on how to avoid the most common fundraising mistakes
Every journey starts with a single step. As you’ll learn from examples in this guide, whether it’s a $10,000 investment from an angel investor, or $3,000,000 Series A round led by an investment firm, the first step is taking stock of where you are now and where you want to go.

Prepare Like You Mean It

Securing capital is not a one-and-done activity. It is an ongoing process that is essential to your role as the founder of a social venture that may require outside capital to scale. 

As such, you need to properly prepare by growing your knowledge of the world of startup funding and venture capital investment. To access capital, you need to have a practical understanding of the startup funding stages and clear line of sight into the qualities that investors seek in investee companies.


One shortcut to souring an investor relationship is to ask for money long before you can demonstrate readiness. Instead, you want to approach investors with an ask that shows you understand their point of view.

Every investment an investor makes will fit into their personal goals or motivations, of which there is a spectrum as wide as there are founders who each choose to build different ventures. When you understand the motivations of an investor, you can then demonstrate how his or her participation in your venture can help to reach them.
Abdul Mohamed, an Acumen Portfolio Manager based in East Africa, warns of seeking funding too soon. If an early-stage entrepreneur approaches him with very few customers but asking for a million dollar investment, he says it clearly signals that “the organization in its current state can't handle that capacity and that there may be a lack of self-awareness.”
“A good trigger for when to start fundraising is when your startup has collected enough objective data to demonstrate that what you're doing is differentiated from what's in the marketplace. This way, when you go and speak to prospective investors, you're able to lead with the progress that you've made.” - Abdul Mohamed, Portfolio Manager, Acumen East Africa 
That doesn’t mean you can’t start building investor relationships even if you aren’t ready to receive investment––you will just have a different goal in mind. 
Abdul recommends reaching out to potential investors in the early days of your startup while you are still ideating or prototyping. At this stage, some investors will be willing to offer valuable advice and insights to streamline growth and avoid common pitfalls. 
These early conversations can show your willingness to receive feedback and give you the opportunity to highlight progress over time. Then, when you return with key milestones behind you, the same investors will already have familiarity with your team and business. They may be more willing to introduce you to potential investors or, if it’s a good fit, they may be interested in investing in you at that time.
To Raise or Not to Raise?
After assessing readiness, you may come to the conclusion that it’s not a strategic priority to seek outside funding. If your business doesn’t expect to significantly scale (i.e. achieve 30% annual growth that impact investors might expect) then it may be more prudent to focus on bootstrapping––scaling with funds from the founding team and/or by reinvesting earnings––rather than seeking venture capital funding.
Bootstrapping is also preferable if you’re in a business that expects to become cash-flow positive within a relatively short amount of time. If the level of funds in the bank is enough to cover expenses during the startup phase, the founding team may opt to keep 100% of the equity rather than trading it for investors’ cash. Keeping full ownership of the company yields the founders full control over the direction and decision-making for the future of the organization, which may be worth a potentially slower start to scaling up.


If you’ve experienced success with customer demand and determined that now is the right time to seek outside investment, it’s time to outline a funding strategy. Depending on your current progress and needs, you may want to consider a fundraising plan that encompasses debt, grants, crowdfunding, angel investment, venture capital, or other options.

Since this guide is focused on securing equity investment from an angel investor or venture capital fund, let’s start with a review of the early stages of investment.
The first investment round is called a “seed round” or “seed stage.” A seed round offers angel investors the opportunity to invest in ventures at an early stage. Securing capital at the seed stage requires the founder(s) to sell the vision of the social venture and its potential for growth.

Because ventures at this stage have not proven out their entire business model, they are often still experimenting to refine their primary offering and getting to know their current and potential customer segments. This can make it a riskier move for the investor, but if the venture does well, they also have the chance to participate in more upside.

Most seed rounds get raised based on the quality of the founders and the raw story that they can tell about their company and the future that company will create.

Y Combinator
In addition to a compelling vision, these key milestones are typically in place before starting a seed round:
  • A strong team: There are usually two or more founders and key operational management team members in place. It’s okay to have gaps as long as they are identified and actively in the process of being filled.
  • A developed product: The product is likely in iterative stages, but the team should have built something concrete.
  • Early market traction: This traction could be demonstrated through a pilot, early sales, small partnerships, or an upward growth trend that indicates people want to buy the product.
  • Understanding of your customer: This includes a definition of who the customers are, why they use the product, and why they pay.
At this stage, you may not necessarily have a clear understanding of your sales and cash cycle. However, this boost of funding will help you refine and build out your business model until it’s at the point where it can more predictably bolster cash flows.
The next stage of fundraising is called Series A. Series A is an investment round for young, private companies that are already generating revenue. This usually comes at the point when the team is moving "from promise to metrics."
The milestones for this stage of funding are not as clear cut, but you'll know you are ready to pursue Series A when you have the capacity to take in $3–5 million and deploy it in the next 12–18 months.
To determine the ideal size of the funding round you’re seeking, you need to know your financials intimately. The rough rule of thumb is to capitalize the company with at least 12–24 months of “runway.” Runway is defined as how many months your business can operate without running out of cash, which depends largely on your monthly expenses, or “burn rate.”
After Series A, some high-growth companies continue scaling with larger rounds of investment, from Series B and up. If you’re at this point, you’re likely already a pro at raising capital!
Now that you understand the levels of funding, you want to consider the qualities that you seek in an ideal impact investor.


An investment relationship is like a marriage or long-term partnership. You don’t want to partner with someone just because they have capital––you want their experience and insights to offer substantial guidance that will help you make the best decisions to scale your impact and revenues.

Seeking investors with both relevant industry experience and a commitment to impact becomes critical when evaluating opportunities through this more holistic lens. If the funding round necessitates multiple funders, look for diversity in industry experience to fill knowledge gaps––just as you would consider complementary skill sets when building your management team.
Impact investors will fall along a spectrum of being “impact-first” or “finance-first,” although when equity is involved financial health is always a significant consideration. A clear benefit of partnering with an impact-first investor is that he or she is more likely to understand your long-term vision and support your leadership’s strategic decisions based on those goals.
Yuliya Tarasava, co-founder of CNote and Acumen Global Fellow, finds that sharing stories about your social mission and impact is a powerful tool no matter the investor. That said, while impact metrics will resonate deeply with impact-oriented investors, she recommends highlighting financial metrics when speaking with traditional investors.
“Your impact story will open the door for some impact investors,” Yuliya explained. “But at the end of the day, your financial story will close the deal.” 
Yuliya Tarasava
Global Fellow

Yuliya Tarasava

Yulilya was "made in USSR" which explains my accent that I embrace and my shyness that I hide. She grew up on a farm so nature is her sanctuary. At school she liked two things - reading and math which clearly defined her as a "nerd". Exploring new horizons, she moved to the USA which became my new habitat and is where I "grew up" as an individual ...

Once you’ve considered impact alignment, you can then take other factors into account when picturing your ideal investor, including:
  • The geographies in which they invest
  • The legal structure and stage of growth of their investee companies
  • Investment size and expectations for return on invested capital
Write down the characteristics of your ideal investors as you brainstorm all of this criteria.


With the above criteria in mind, you can now start gathering names. Speak with mentors and peers and search online to start a list of potential investors and funds that you might want to reach out to. Having this clear picture of your ideal investor will be helpful in conversations. For example, you could ask your network specifically if they know of any “angel investors who fund seed rounds for solar distribution startups in Kenya.”

After you have a short list of investors who could be a great fit, it’s time to go deeper into the research for a view into the motivations and goals that drive each person’s investment decisions. 
First, get a sense of the investments they have already made the same space. This will help confirm that your focus sector is relevant to their strategy. While most investors will give an indication of their investment criteria on their website, even if it’s not explicitly stated, you should be able to get a good sense by reviewing the other companies in their portfolio. 
If you see companies with a similar business model or value proposition, remember that it’s not common for investors or firms to invest in competing ventures. If you decide to pursue the opportunity, be ready to articulate how your company is different from, or complements, others in the portfolio. 
Second, look for clues to better understand the investor or fund’s vision. For example, Acumen’s website outlines how the fund employs patient capital to invest in intrepid entrepreneurs and early stage innovators tackling problems of poverty. 
Gathering insights like these can provide clues as to whether the investor is aligned with your vision for the growth of your venture––or not.



What an investor is thinking:

“I’m busy on deals to support social enterprises that are primed to scale their impact. I don’t have time for entrepreneurs who clearly don’t fit into the scope of investments I make or who ask me questions about information they can easily find online.”
A common worry of founders is that taking outside investment will hamper their decision-making and lead to messy conflict. While deep partnerships certainly come with this type of risk, investors are just as concerned as founders about finding partners with shared goals. 
Investor Sam Haffar explains, “When I do cut a cheque for a company, I’m certainly not doing so to serve the interest of [the company] but rather because the narrative of the company is perfectly aligned with what our firm and I genuinely believe in.”
If you follow the steps above, you’ll have a head start over many founders who take a quantity over quality approach to investor outreach. Especially given the influence this partnership will have over the development of your social enterprise, taking your time to envision and find ideal investors will be well worth the small amount of extra effort it takes to do your research at the start. 

Stand Out From the Crowd

Investors meet a ton of people and often receive more pitches than they can reasonably remember on any given day. You need to leave a strong impression after the initial touch points and throughout the process.

Think of reaching out to potential investors like a job interview. Your goal is to leave the conversation with your organization top of the mind as the investor finishes their day. It’s helpful to remember that the goal of initial meetings is simply to stand out from the crowd––not to explain every detail about your business and operations. 
When you leave a positive impression and clearly describe the potential opportunity from the investor’s point of view, they are more likely to want to set up a second meeting and continue getting to know you and your venture.
You can stand out from the crowd by learning how to effectively tell the strategic story of your business. Your story is what makes your personal experience, and likely your business, unique and memorable. Powerful storytelling is an art but also a skill that can be learned and improved.

Companies that don’t have a clearly articulated story don’t have a clear and well-thought-out strategy. The company story is the company strategy.

Ben Horowitz
Cofounder and general partner, Andreessen Horowitz


Before you jump into creating pitch decks, you first need to work out the fundamentals of your business story and connect it to the social impact you seek to create in the world.

This includes simplified financials, such as how you make money, how much money you spend every month, and how much you need to fill the funding gap and keep scaling.
Your business story should also explain why this work matters, what it means to the world and your target customers, why those people will choose you over alternatives, how you track both financial and impact progress, and how you expect to scale.
Distilling the complexity of your business into a concise business narrative is well worth the practice it takes to get there. Investors need to zero in on the core information to determine if the opportunity is one they wish to pursue in more detail. As investor Sam Haffar explains, “powerful narratives peel back the complexity of your business and dumb it down into simple but striking and memorable key takeaways.” 


To leave that memorable impression, Sam recommends going into any investment conversation “equipped with a powerful, well-organized, well-defined number of sound-bites that create enough clarity to get the investor to lean in.” From that point, the investor can begin asking clarifying questions and book a follow-up meeting if they are intrigued to know you and the business better.

The complexity of your business is rarely as important as entrepreneurs believe VCs think.

Sam Haffar


At the core of every successful narrative is a clear solution to a defined problem for a specific group of people. In other words, a sound value proposition.
Nailing the value proposition is important because investors are interested in funding unique, standout ideas. And more than just the idea itself, they are looking for proven traction while building a sustainable venture around that standout idea.
You need to articulate what makes your product, service, or organization different from existing options. What differentiates you from the dozens of other organizations that may be doing something similar in another region or for another customer segment?
Phrases like “value proposition” and “innovation” are thrown around like confetti, but what do they actually mean?
According to Adbul, being innovative boils down to doing something cheaper, faster, or better. Often, entrepreneurs and organizations fall into the habit of using lots of really nice-sounding words without any substance about what differentiates them from similar organizations.
“This year I've probably seen 45 edtech companies pitch me e-learning products like an app or a website,” Abdul explained. “After a while you can imagine they all start to sound the same. So what are you doing in your pitch and your articulation that makes it clear that what you're doing is different and warrants the funding?”
If your explanation of your business model ends up sounding like everyone else, you’re likely to blend into the crowd and lower your chance of securing startup capital.



What an investor is thinking:

“I get so many emails and pitches throughout the year that there’s only time for the most memorable ones that capture and keep my attention.”
Avoid blending in with the crowd and capture the attention of investors by answering these prompts:
Secret Sauce
[Company Name] is the [Service/Product Description] for [Target Customers] who [Customer Need], but want to [First Benefit] and [Second Benefit].
What ideal state of the world are you working towards?
My venture exists to [Social Mission].
In order to achieve this mission we _____________.
Product-Market Fit
My customer [Customer Hypothesis] has a problem/job/opportunity to [Problem Hypothesis]. We solve this by [Solution Hypothesis].


Investors with money to allocate and the entrepreneurs seeking it both want the same thing: to power a business with high potential to change the world. For that reason, the qualities that help your company stand out from the crowd are the same fundamentals that will help you grow a solid business.

Therefore, zeroing in on what makes your endeavor unique using the exercises above is going to pay off regardless of whether you end up raising capital. Consider this effort as time well invested in the future success of your social enterprise!

Pitch with Confidence

With the strategic story of your business and unique value proposition firmly established, you’re ready to weave these concepts into an easy-to-consume format. To do so, Y Combinator suggests preparing three “investment materials”: the deck, memo, and pitch.

The slide deck is the visual reference you use to support your verbal pitch. Most pitch decks cover the same essential 10–15 slides (not including the appendix), which we cover in detail in the second half of this article on how to pitch your social venture. The key is to present the most important information while following a simple story arc.

Some investors may also appreciate an investment memo, which is a clearly written summary of the company and rationale for investing in it. Y Combinator suggests that you send an investment memo ahead of a meeting to provide context for your pitch deck and allow you to start the conversation past the point of basics.

Finally, you have the pitch itself. This is a presentation that might be made in a one-on-one setting with a potential investor or on stage in a competition, like these inspiring social entrepreneurs pitching their ventures

These materials will form a foundation that you can draw from as funding discussions progress. As with most things in entrepreneurship, they are living documents that will actively evolve over time as the team makes new decisions and the company develops. 


Before reaching out, remember to confirm that the investor is likely to fund your sector, that they have complementary (not competitive) investments, and that they work in your geography. With each new relationship, go back to your initial research and ask yourself if you need to make any adjustments to better capture and engage their attention.
One example unique to social enterprises is the need to customize your pitch based on the investor’s level of awareness and interest related to impact. Will the investor be familiar with “Theory of Change” or “Impact Models”? If not, be sure to adjust the language you use to ensure the information still comes across clearly.
For investors who are more “impact-first” on the spectrum of investor goals, you may choose to lead with an impact story and your vision for change. For more traditional “finance-first” investors, you may choose to start with an overview of the problem-solution fit and market opportunity.
Social enterprises may also run into a scenario where multiple scopes of work muddy the waters of the straightforward narrative you hope to convey.
For example, imagine that a social enterprise runs technical vocational training centers to help artisan entrepreneurs produce textiles, and at the same time, operates a shop to bring those textiles to market. In this type of instance, Acumen’s East Africa Portfolio Manager Abdul recommends to “paint a narrative to the prospect you're seeking funding from as to how these two components complement each other.” You want to make sure the narrative you tell “eases any concerns they have that you're doing two completely different things.”
Abdul acknowledges that treading this line may require some creativity. However, working toward systems change can help set your social venture apart from the rest. 
“If you can explain where you’re trying to get to, it gives you a little bit of a leg to stand on as to why you're doing multiple things,” Abdul said “Rather than just putting on a slide your two scopes of work, it’s better to create a narrative or a story as to how that came about. It may be you started trying to address one issue and you realized for this issue to really be addressed, you had to start doing something else. It goes back to sharing that story as to the evolution of the organization.”



Your pitch deck or memo is a tool to start the conversation. It should be short, capture the main points about your business, and tell a cohesive narrative. 
Specifically, your pitch should tell a story about:
  • Your product offering(s) and why they are important for the world
  • Your team and why the founders are well-equipped and committed to solving the problem at hand
  • The benefit(s) to customers and why they will choose your company over others
  • Market traction, backed by stories and data-driven evidence of customer engagement and growth
  • Current revenue and impact metrics tracked over time, plus projections for the future
Ultimately, the pitch needs to have a consistent narrative to inspire confidence that, in your hands, the investor’s capital will generate a favorable return over time. Like your other investment materials, the pitch deck will evolve over time. Think of it as a living document that you can return to after each conversation to tweak your language and data based on what resonates most strongly.


For any presentation, the polish comes with practice. According to Acumen Academy Fellows who have presented successful TED Talks—featured in this guide on how to become a better public speaker—it’s nearly impossible to practice too much.
Acumen Academy Fellow Saad Hamid recommends that you start by writing out your talk. Outlining what you want to say will tighten the flow of your speech and highlight any holes in the narrative.
To determine whether your story will resonate with audiences, Y Combinator suggests that you hold a practice session where you pitch to a mentor or friend. At the end, ask your listener(s) to share their top three takeaways. If these points don’t reflect the most important elements of your story, then go back to the drawing board to keep refining your message and delivery.
The more often you tell the story of your business and pitch to an audience, the more feedback you will gain to prepare a solid pitch that resonates.


What an investor is thinking:

“Your job is to give me confidence that my money will help you generate a financial and social/environmental return at some period in time.”

There is no shortage of advice online and from mentors about perfecting your investment pitch. It can quickly escalate to the point that it becomes overwhelming. If you’re feeling this way, it might be a good time to pause and return to basics.

Investors are less concerned with a flashy or slick delivery. Instead, they want to get to know the heart of your business. 
Brian Trelstad, Partner at U.S. Sustainable Bridges Fund and former Chief Investment Officer at Acumen, recommends starting the conversation with the essentials:
  1. How you started the company
  2. Where you are now
  3. Where you’re heading
  4. Why you need capital
From there, you can dive deeper into other areas in response to the investor’s questions and concerns. 


If you only look at the headlines––often chock-full of success stories featuring male-led teams of Stanford dropouts coming out of Silicon Valley––CNote is an unlikely candidate for achieving similar startup fundraising success. It is co-founded by two women with one, Yuliya Tarasava, an immigrant to the United States who learned English when she arrived with an aspiration to study how financial markets work.

Yet CNote recently closed a $3 million round to scale a solution that redeploys capital to create jobs, fund BIPOC-owned small businesses, and support affordable housing development.

The root of inspiration, at least to some extent, was a trip that Yuliya took to Kenya as an Acumen Global Fellow in 2015. After witnessing the ability for small amounts of capital to transform lives, she was inspired to create CNote’s suite of tools that help institutions invest mission-aligned capital in underserved communities and help close the wealth gap across America.

The reality of raising funding to build a business from an idea, in Yuliya’s experience, is that it takes a lot of time, effort, and more conversations than you can count.

She admits that her feeling of inadequacy was not easy to overcome at first. She had to intentionally surround herself with other entrepreneurs––people more like her and less like those in the headlines––to keep impostor syndrome at bay. Having conversations with other female founders allowed her to keep perspective in check and come to recognize the uniqueness of every single startup funding journey.

Along CNote’s unique path to raising capital, Yuliya shares that one of the most challenging moments was when investors didn’t provide feedback to explain why they weren’t interested in investing. According to Yuliya, it’s not so hurtful to hear a “no” when it is coupled with constructive advice because it is an opportunity to learn and improve.

On the other hand, it can be quite hard to reconcile the absence of a reply—despite many follow-up emails—after an engaging conversation with an investor. Instead of letting this “ghosting” or radio silence derail her confidence, Yuliya and her team built support structures to keep their spirits high and focused.

“As we were growing CNote, we always had a very strong network of advisors. Those advisors might not necessarily be our investors, or they might be small investors, but they’re people that really believed in us and really supported us. And could lift us up when we were down.”

For example, one critique CNote received was that their market was not big enough to be investable. At first, this was frustrating for Yuliya to hear because she had such a deep belief in the potential for her product to reach hundreds of thousands of people and shift millions of dollars of capital in the United States. However, she soon came to the understanding that if an investor had this perspective, they were clearly not the right investor to support CNote.

Yuliya’s advice? Remind yourself that there are elements of your situation and business that you can control, and elements that you can’t control. Integrate the feedback that will help you refine your story or improve the delivery of your pitch, but don’t let what you can’t control dampen your momentum.

“Don’t be so hard on yourself if your journey is very different from other startups’ journeys. Create a network of founders around you that look like you, or whose journeys seem similar or more real.”

Let CNote’s story be a reminder that your journey will be your own. One of Yuliya’s favorite quotes and her mantra for building CNote is: “Be yourself. Others are taken.”

Know Your Key Business Metrics

A significant portion of your investor conversations will revolve around key business metrics. An investor will want to get to know your business intimately––both to make a decision about whether to fund it, and to more effectively guide the development and growth of the organization.

If you’ve ever watched the reality TV show Shark Tank, you’ll already know that investors will expect you to know your numbers inside and out. You should be able to speak with confidence about your breakeven point, profitability, sales, gross margin, growth rates, revenue targets, risks, and other metrics specific to your industry.


When speaking about revenue targets, don’t be afraid to openly address the related assumptions and potential risks. Investors have been around the block: They’ve witnessed, or even made, projections based on assumptions that turned out to be incorrect. They are well aware that every company faces financial risks. By addressing these risks, you will demonstrate that you are aware and realistic about the potential obstacles in your path. 
Investors will not necessarily penalize you for missing revenue targets. However, you do want to be conservative when sharing revenue goals to give yourself some bandwidth to deliver on your side of the commitment. Remember that you should aim to have 12–24 months of runway available at any given time. As an alternative to committing to hard revenue targets, you could reference the key performance indicators (KPIs) that you intend to achieve along the way, accompanied by your assumptions and how you’ve accounted for potential risks. 
Erring on the side of caution will put you in a better position if you need to go back to the table with investors. For example, imagine that a cookstove company commits to selling a certain number of stoves to achieve profitability. Later, the company realizes the breakeven point was 2.5 times higher than expected. The resulting gap, after facing the true cost of sales, marketing, and R&D when they entered the market, would require a renegotiation with investors on promised KPIs.



How much detail should you share about the depth and breadth of your social impact? The answer is that it depends: You should tailor the information in your pitch and supporting materials according to the interests of each investor.
Yuliya Tarasava, Acumen Fellow and co-founder of CNote, recommends that you share a small and carefully selected group of KPIs in your pitch.
“Pick one, two, three numbers,” she said. “Investors are not expecting a lot from you. And revenue is probably always one of them. It could be the number of users, it could be the assets, or the number of units you produce. It could be as simple as that.”
When you commit to a few KPIs, it shows that you really understand the growth drivers of your business. It also simplifies the conversation for both you and the investors.
Many social entrepreneurs find it challenging to clearly and succinctly describe the social or environmental outcomes of their work. If you can relate, join Acumen Academy’s Social Impact Analysis course to assess the impact of your initiative and take steps to improve it.


What an investor is thinking:

“The better you understand and communicate the metrics that drive your business, the more confident I will be to entrust you with my funds.”
Practice summarizing your financial story using this template:
Financial Story
We sell [Product/Offer] for [Customer].
To date, we have generated $______ in total revenue and are projecting $_____ in revenue by [Date].
Our projected operating expenses during this time are $______.
During this period, we believe we will cover _____% of our expenses with earned revenue and thus are looking to raise $ _____ by [Same date as above].


This short script will distill your financial story into a few short sentences. However, just because it’s short doesn’t necessarily mean it’s easy, so reach out to mentors or peers for help if needed.

Remember, your financial story will not only help you raise money. Keeping tabs on the health of your key business metrics will also improve the strength and resilience of your company.

Embrace a Growth Mindset

Raising startup capital might not necessarily be what you dreamed about when you imagined your journey as a social entrepreneur. But it is an important skill that many founders need to learn. 

Like many responsibilities in the life of a social entrepreneur, raising money is a skill that requires both humility and audacity. You need to hold in tension the fact that your social venture brings an opportunity for investors to deploy their capital in new and meaningful ways, while also recognizing your own gaps in experience and expertise.

Approaching fundraising with a growth mindset will allow you to expand your perspective and grow as a social impact leader. Not every pitch will go perfectly. In fact, you will probably learn the most from the moments when you are challenged.


Product development is a process of continuous iteration, and you should approach your startup funding journey the same way. This will require that you actively seek out constructive feedback throughout the process.
Abdul, an Acumen Portfolio Manager in East Africa, recommends listening for both direct and indirect feedback. For example, when presenting at competitions or in one-on-one investor meetings, pay attention to the follow-up questions you are asked. 
“If you are often getting questions from the judges or the audience about things like, ‘I'm still unclear about who your target customer is,’ or ‘I’m still unclear about your economics,’ that's really feedback that your pitch or your deck missed the spot,” Abdul said.
Use these questions as clues for adjusting your pitch in the future. Be sure to address all of these business fundamentals in your presentation so that when it comes time for questions, investors can focus on learning what really sets your social enterprise apart.



While every startup funding story will be different, one thing is sure to be the same––the certainty of hearing the word “no.”

However, hearing “no” is not necessarily a bad thing. It presents an opportunity for learning, either to shift the way you communicate to the next investor, or to flag areas of your business strategy that may need more consideration. 
When you are faced with a “no,” Abdul recommends that you ask the investor these follow-up questions:
  1. What level or type of traction are you looking for in the companies you invest in?
  2. What are you most concerned about when learning about my business?
Don’t let this feedback derail your motivation, confidence, or progress. Remember, a “no” does not mean the door is closed indefinitely.
Abdul advises that you keep the investor updated periodically on your progress. (Quarterly is a good frequency, he says.) While this particular investor chose to pass, they are likely in touch with other investors for whom your venture may present an ideal opportunity. Regular updates can also show progress in areas where there was initial concern, which could lead to the conversation picking back up at a later date.


Don’t be shy to share the difficulties your organization has faced, both before sealing the deal and after the partnership is formalized. Opening up about mistakes builds a more trusting and open relationship from the beginning.

“Don’t try and gloss it over and make it all look good,” said Amar Inamdar, Manager Director of KawiSafi Ventures. “We’re deeply curious about when the business takes a dip and how you respond to that––because that’s going to happen again.”
Throughout the relationship-building process, you should be as honest about your challenges as you are willing to brag about the wins. Amar explained why this is especially crucial in the early stages: 
“When we’re thinking about making an investment, we’re thinking about valuation and all sorts of different factors,” Amar said. “We’re saying, ‘Can we trust these individuals? Do they come to the table with some honesty and authenticity?’ because there’s going to be a hard journey ahead.”
Like with any trusted friend or partner, being open and truthful with your investors will result in a relationship that can weather ups and down and emerge even stronger as a result. 
“Solving humanity’s toughest problems requires no single hero, but a system of people, companies, organizations, and government that rally around a common enterprise… Partnering effectively takes time and commitment. If we believe that a moral revolution requires everyone, we must become skilled at building trusting partnerships across sectors.”
— Excerpt from Manifesto for a Moral Revolution by Jacqueline Novogratz


What an investor is thinking:

“I’m here to help your business get to the next level and capital is only one part of the equation. I look for coachable entrepreneurs because I also have a wealth of experience and advice that will help you make the most of that money.”

Remember that interested or committed investors have a stake in your success. They will typically be eager to offer support when you face challenges, whether in the form of financial support, advice, or connections to advisors and experts in their network.

Close the Deal

If you have been following the steps in this guide to prepare, pitch, and learn, you should now be close to sealing the deal with your first (or newest) investor.

Think of this stage in the journey like persevering through dating: You’ve found “the one” and are ready for marriage. But there are a few more steps (and paperwork) remaining before you can make it official. 


It can take a few weeks or even months to go from an investor’s verbal confirmation to officially signing on the dotted line. This process is referred to as “due diligence.” Due diligence involves many follow-up questions, working out the finer details of the agreement, and exchanging company and legal paperwork.
From the start, it’s helpful to ask clarifying questions about what to expect during due diligence because every investor or fund will have their own process. You should inquire about the general process, key decision-makers, and expected timeline. 
Typically due diligence is broken down into two parts: commercial diligence and legal diligence. The process will roughly follow these steps:
  1. If the investor is interested after the pitch, they will ask for your “data room.”––This is a collection of documents and information about your business, including your pitch deck, business model, market sizing and scoping, financial projections, client contracts, and so on.
  2. The next step is detailed commercial diligence, which may include Q&A sessions or site visits where investors can observe operations firsthand and meet the management team.
  3. The term sheet is a non-binding outline of the deal. This is the starting point for any finer negotiations.
  4. If you are working with a fund, there will be an investment committee that meets to approve the investment according to the agreed upon terms and conditions. If you are working with a single investor, they will make their final “go or no go” decision.
  5. An outside legal team will then conduct legal due diligence and prepare the final legal documentation.
  6. Once everything is signed, the “financial close” is the final step when the money is transferred to the investee.
One thing is certain in the due diligence process––there will be many questions! But a deluge of questions is normal and to be expected. Investors need to gather necessary details about the company they are investing in and get to know the founders better. They will notice how you communicate and respond, gathering clues about what to expect from the working partnership after the funds have cleared.
Rebecca Mincy, Portfolio Manager at Acumen, explained the significance of these informal parts of the diligence process: “With every interaction, we’re getting to know your character, how you handle tough questions, how you say ‘I don’t know,’ and how you have dealt with previous setbacks.” 
Through all the questions and conversations, investors are getting a sense of how the founders and team will fare against the inevitable highs and lows of growing a social enterprise.


You can ease some of the pressure related to the due diligence process by preparing ahead of time. Here are a few of the most important questions that investors and venture capital firms seek to understand during the process:
  • Who is the team? What is their capacity to execute?
  • How potentially scalable is the business model?
  • What are the key risks? How does the team understand their risks?
  • What traction does the company have to date?
  • How did the launch go? What proof points back up this traction?
  • What are the key partnerships?
  • What other actors are part of this investment round? (co-investors or seed stage investors)
  • Aside from the management team, what other resources/connections does this team have to support them through an entrepreneurial journey?
  • What does the supply chain look like? Who are they sourcing from? Who are they selling to? 
  • What has the team done to understand their customer to date?
  • If they have done a great job understanding their customer, what steps have they taken to make it as easy as possible to get the product or service to the end user or customer?
The more prepared you are to answer these questions, the better your chances for winning over the ideal investor partner to take your social venture to the next level.



What an investor is thinking:

“I appreciate working with entrepreneurs who understand the basics of the process and are professional in our dealings.”
Take some time to brush up on the due diligence processes and legal agreements required to raise capital. If you aren’t as familiar with legal concepts, CooleyGo is a helpful, free resource for startup founders who want to expand their skill set in this area. Brushing up on the relevant vocabulary will allow you to speak more effectively with investors and avoid potential misunderstandings.


Longtime friends Rafiq Islam, Faysal Islam and Anas Hoassain Makki started Safewheel, an emergency medical care social enterprise that serves rural Bangladesh, after an eyeopening trip in 2016.

The concept for Safewheel was born on a trip to a rural area where Rafiq and Faysal witnessed the lack of access to critical healthcare services. To help address this challenge, Safewheel seeks to provide medical services that are accessible, available, and affordable to all Bangladeshi people.

To begin serving the 65% of the population that lives in rural areas without access to quality healthcare, Safewheel self-funded its early development along with support from friends and family. After that, the team was able to secure funding from an angel investor, and later took part in the Rockefeller Foundation-Acumen Student Social Innovation Challenge.

When it came time to reach out to potential investors, Rafiq and Faysal focused on bringing partners on board who not only shared their passion for the cause, but who also had some experience within the healthcare industry and understood the challenges of entrepreneurship.

“We are running a truly impactful business. That is why impact is equally important as cash, so we started looking for investors that also cared for the same cause.”

Rafiq and Faysal tapped into their network by researching funding opportunities online––looking for institutions or investors who might be a good fit––even going so far as to browse the LinkedIn profiles to get a better sense of investor’s backgrounds. By zeroing in on people who had already invested in Safewheel’s geography and cause, the founders were able to focus their energy on investors who had the greatest likelihood of wanting to support the social enterprise.

From there, the founders sought introductions through mutual contacts in their networks to secure first meetings with hopefuls. Every conversation was treated with the same respect. Rafiq and Faysal recognized that, while they might not speak to “the” investor right away, any conversation could lead to the ideal partner by way of referral.

“If we talk with 20 potential investors, and everyone rejects us, at least there will be one investor... that has an investor friend who helps guys like us.”

The Safewheel team also leaned into their natural relationship-building skills to form long-lasting supportive partnerships. They started by finding shared interests to initially build rapport and, over time, succeeded in building meaningful connections with their funders.

Safewheel uses another smart strategy to maintain close relationships with funders and partners: WhatsApp. The team creates a WhatsApp group chat for both the core team and potential partners and names it “Safewheel and {mentor’s name}.” This simple practice helps with name recognition and gives everyone access to an at-hand history of the conversation as it unfolds between meetings.

Similar to their tight-knit approach to supporting employees in and outside of the job, Rafiq and Faysal speak about their mentors, advisors, and investors as family. They point out that this comes naturally because they authentically want to share the ups and downs of Safewheel’s progress with close, trusted collaborators.

“When you have good news, you usually call your friends and family. When we have good news, we call our mentors.”

At the end of the day, this type of relationship is only possible when you align with investors who can get behind your long-term vision. It’s well worth getting to know the person behind the cash to make sure it’s a good fit!


Play the Long Game

After a successful due diligence process, the investment is finally official. But remember, any relationship requires considerate communication and an awareness of evolving needs to ensure both partners remain happy.


The most productive relationships have a shared understanding of expectations. In particular, the investor and investee should agree on communication methods and timelines: How frequently does the investor want to receive updates? Do they prefer an email every few months or are they willing to jump on a call anytime you need advice?
In Safewheel’s case, the founders chose to engage in more casual communication with their investors, similar to how a group of friends might stay in touch. They maintain a WhatsApp group with their mentors and investors so they can stay connected and pass along news, updates, and questions while top-of-mind.


Signing on with your first investor is just the start. As your organization grows, you will probably need other sources of funding to continue scaling.
“Realistically, you may have multiple funders, multiple grant givers, multiple investors and they're all going to have different intrinsic desires as to why they wanted to support you,” Abdul said. 
After the initial funding, investors will be even more focused on the success of your growing social enterprise. Abdul recommends staying mindful about each investor’s goals and what excites them about partnering in the growth of your organization. Keep this insight handy as the venture develops so that you can tap into those future opportunities for support, financial or otherwise.


What an investor is thinking:

“I’m dedicated to making informed, smart choices to create change, just like the entrepreneurs. We have aligned objectives and we’re in this together to work toward a better future.”
With each funder, keep a record of what excited them most when they first came on board. Take into account their communication preferences and consider what a personalized approach might be for staying in touch and keeping them informed on your progress. 
Once you have an engagement plan, put systems in place to keep it on track. It could be as simple as scheduling a reminder in your calendar to reach out at the investor’s desired frequency. Finally, keep your eyes and ears open to receive feedback about their desired level of involvement as time goes on.


The process of raising capital can be daunting. While there are many challenges and unknowns involved in the fundraising process, the advice in this guide will help you navigate every step with confidence. 

If you only take away one piece of advice, it is to step into the shoes of the investor and consider what would make most sense from his or her perspective. When you think like an impact investor, it’s easier to deliver what prospective funders are looking for and build mutually rewarding funding relationships.


Now that you have started to think like an impact investor, here are some next steps to help you continue growing as a startup founder.
To continue refining your pitching skills, learn about the Art of Storytelling to Tell Stories that Matter, become a better public speaker, or take Acumen Academy's free Storytelling for Change course.
If you lead a hybrid social enterprise or are involved in fundraising for nonprofits, you might find value in our in-depth Fundraising for Nonprofits Guide or Acumen Academy's free Nonprofit Fundraising Essentials course.
We encourage you to explore our course catalogue for new opportunities to expand your skills as you continue your journey to grow as a leader.