Last year, one of our UnLtd USA investees was neck deep in raising their first major round of investment. If you had talked to them at that point, they would have said something to the tune of, “It’s like crawling through mud. Uphill. In a downpour.”

That didn’t line up with the local narrative around impact investing here in Austin, Texas – home to one of the nation’s most innovative private foundations embracing PRIs. Our mayor declared Austin a social innovation capital of the world, and there is an active community of founders and investors. Left and right, tech angel investors speak about how they want to make impact investments.

The process of raising investment feels frustrating and opaque to many entrepreneurs. Tweet This Quote

Not surprisingly, the founder mentioned above became more and more frustrated upon hearing how much impact capital was out there, yet pitching investors with no understanding of what it actually meant to create a social business model. Eventually, he got fed up. “Listen,” he said to one investor full of cashless advice, “if you haven’t been an entrepreneur before or tried building a business that’s good for the world, you’re probably not the right investor for us.”

Luckily, this particular entrepreneur went on to successfully raise their seed round, but that doesn’t erase how frustrating and opaque the process of raising investment feels to entrepreneurs. It doesn’t have to be like this.

A Survey on Raising Investment

Mark started his career in impact investing at Gray Ghost Ventures and Zoe with UnLtd India. Over the years, we have met some incredible entrepreneurs whose journeys we’ve followed closely. We decided to survey a dozen of our favorite founders all about the process of raising investment. We will share responses from one particular question in this post. The question was this:

What investor’s money would you be thrilled to take (and why)? Also, what should investors, ourselves included, focus on in order to add value beyond the dollars we invest?

The eight entrepreneurs who responded are an impressive and varied group (see who they are in the footnotes). They are two women and six men. Three operate or operated in East Africa, four in the U.S. and one in Europe. We’ve funded some of them and not others. Some have seen success, some are in the process of raising money, and some have closed up shop.

The responses we received were surprising and confirming, consonant and divergent. Mostly, they were too helpful not to share with other founders. The founders who responded were gracious enough to let us share publicly, in hopes that their responses could provide some guidance to other entrepreneurs raising investment or thinking about it.

Here is what our founders – nearly all have raised capital themselves – would say to other founders about what qualities to look for in investors:

1. They understand what it’s like to be a founder.

Founders respect founders and people who think like founders. Said one founder: “I only want to raise money from investors that have been entrepreneurs. I think the ability to empathize with a startup founder’s ups and downs goes a long way. It also means you’re in a relatively similar frame of mind from the beginning.”

Founders respect founders and people who think like founders. Tweet This Quote

2. They deploy their networks on behalf of their founders.

In the tech startup world, Andreessen Horowitz famously copied the talent management model of Hollywood to build robust, active networks around their founders. Few impact investors have been able to replicate this.

Omidyar Network was one exception mentioned: “Omidyar Network brings a massive value add outside money. They really do have a massive network that they deploy. [These] strategic partners have been really, really good for our company.”

3. Their financial and impact expectations line up with yours.

One entrepreneur we spoke with warned, “I love funding that comes with a deeper relationship and a shared vision. I still don’t have a vetting process to predict which of our funders will turn out to be true champions rather than just check-writers. It’s a really hard quality to gauge in advance. And as a result, we take funding just about anywhere we can find it and simply focus on defining funder relationships in a way that protect our vision from distracting funder priorities – but allow us to build deeper ties when we do find those rare birds.”

The best-case scenario, according to several of the entrepreneurs, is that your lead investor fits these criteria:

  • Fully understands your vision.
  • Has a solid sense, going into the deal, of what exits (and time horizons) look like in the industry you’re operating in.
  • Has follow-on capital and relationships to support subsequent rounds.
  • Has a capital structure and internal incentives that line up with what you can deliver.

4. They add either commercial or impact credibility.

Raising traditional VC money signals that a mainstream, commercially minded investor believes your business to be a real financial opportunity.

One entrepreneur shared, “As a software-based social impact company, I feel like I’d actually love to get traditional VC money, such as Greylock or KPCB backing. This would add a stamp of credibility that shows our business model and tech innovation are fundamentally scalable, and that we’re not just staying afloat on the premise of appealing to grants or philanthropic sources of capital.”

Raising traditional VC money signals that a mainstream investor believes your business to be a real financial opportunity. Tweet This Quote

On the other hand, impact credibility can be equally as important. Mulago Foundation was mentioned multiple times here for being laser-focused on impact.

In our next post, we will share the responses about what resources would be most valuable to entrepreneurs who are still looking to understand the investment space – and what gaps still need to be filled.


This article was co-written with Mark Hand (@markchand), a Ph.D. student at the LBJ School of Public Affairs at the University of Texas. Additionally, these are most of the founders that responded to the survey featured in this article: Hudson Baird (PelotonU), Trevor Boehm (Penny, UnLtd USA), Greg FitzGerald (Carbon Analytics), Isabella Horrocks (Linkage), Jen Medbery (Kickboard), Erine Gray (Aunt Bertha), and Ben Lyon (Kopo Kopo, Caribou Digital).

About the author

Zoe Schlag

Zoe Schlag

Zoe is the Founder of UnLtd USA, backing entrepreneurs tackling our most pressing social and environmental challenges. She has worked with social ventures across the US, India and Argentina.

  • Melissa Grover

    When learning about entrepreneurship, it becomes very apparent that the process is difficult and irksome. I really liked that this article focuses on the perspective of entrepreneurs that have diverse backgrounds. This diversity demonstrates the credibility of the advice, and shows that these tips can be executed in different environments and countries. I found the third point of the article to be particularly interesting, as I have never thought about how the relationship of the investor and entrepreneur can affect the vision as a whole. I look forward to reading the next installment of this series, I believe these articles share valuable insight for entrepreneurs that are starting out or looking to further improve their understanding of investments.

  • cahu5401

    When the article talks of tech angel investors, they say that they want to make impact investments, but what are they wanting to impact? I really like the quote towards the beginning about not really knowing what one’s money would go to and therefor said person is not the right investor. Relating a little to what we have learned in class, they interviewed entrepreneurs from very important places around the world, which to me relates to globalization. I would never have thought that entrepreneurs look for investors that seriously understand the place they are in, I would think that they would be looking for people with money that want to invest in something that might interest them. Though, reading the article has made me really think about the idea of having someone who truly understands what you are doing back you up and that sounds much more solid of a plan than someone who likes the idea.

  • Jared Moya

    Being an entrepreneur isn’t easy. That’s one of two points I got out of this article. The second being: trying to get started as a young entrepreneur is even harder. Now, I agree that everything about being an entrepreneur is difficult, and I certainly agree that becoming an entrepreneur is even harder, I don’t think that this article really captures the true entrepreneurial “spirit.” By this I mean I don’t think this article really embraces the idea of a startup. If anything, it almost feels as though it’s discouraging people from trying. I say this mostly because it seems to open up to the negative side of things, which it then follows by giving advice from diverse entrepreneurs to investors. In my opinion, being an investor is just as entrepreneurial as being the founder of a startup or large company. To me, it seems as though this article almost wants investors to be scared, more so than it wants entrepreneurs to learn how to invest. One one side of things, I see the reason to give advice, on the other, there seems to be no reason to simultaneously discourage young entrepreneurial investors. I get it, being an entrepreneur: it’s hard. But being an investor: it’s hard too.