A New Approach in Venture Capital: Balancing Startup’s Mission Versus ROI
Updated: Feb 8, 2022
The goal of any company is to turn a profit, but that doesn't have to be the only goal. Financial capital is a tool like no other. If used correctly, it can create a social impact on a global scale. If a company can stay true to its mission and vision while scaling and growing, it can become a force for good in the world.
In this episode, Lyndsey Boucherle discusses how Better Ventures invests in companies looking to make a positive change in the world. Unlike typical companies, they aim to uplift everyone, not just shareholders. She explains how they choose the best companies to invest in for their ROI while ensuring that their founders don't drift away from their purpose. Finally, she also discusses minimizing inequality for women in business.
If you’re thinking of investing in a business, or want to create social impact, then this episode is for you!
Here are three reasons why you should continue reading:
Discover how a certified B-Corp venture capital fund maximizes value for all stakeholders.
See how to balance a company’s mission of social impact against its return on investment.
Learn methods to cut down the bias against women in business and female founders.
Visit the website for more insights on designing an ownership structure that aligns with your company vision, and check out the Her CEO Journey™ podcast series!
Get your free 90-Day Financial Strategic Planning with The Profit Reimagined™ team! Set up a time here!
See how Better Ventures supports mental health at Prairie Health
Learn how Refiberd addresses the textile waste problem. Website | LinkedIn
[05:11] Becoming A Principal Of Better Ventures
Lyndsey didn’t enter her career with venture capital in mind.
She learned the power of financial capital after spending 12 years working for a large global institutional bank.
Early in her career, Lyndsey wanted to make a social impact and create a sense of purpose behind financial capital.
After moving to San Francisco and going to Stanford, she met the founding partners of Better Ventures. It was exactly what she’d been looking for.
[08:46] Maximizing Value For All Stakeholders
Better Ventures is unusual in that it operates under the B-Corp principle, increasing value for all stakeholders, not just shareholders.
This principle is built into who and what Better Ventures invests in. They believe mission-driven businesses aiming for social impact yield greater returns.
They explicitly search for and invest in founders building companies to improve sustainability, health, education, and workforce development.
Their preferred founders are people who have a personal stake in their vision. These people will typically stay true to their course despite challenges.
[12:50] Balancing Social Impact Against Growth
A venture-bakable business needs to scale and achieve a minimum level of growth.
If a business can't scale, it might not be suitable for venture capital.
Better Ventures maintains a close relationship with its founders. They place a lot of trust in them but never force them to grow aggressively.
"We have a close relationship with our founders of talking things through at every stage. We place a lot of trust with them. There's a reason that we've invested in them."
While companies need to scale within a reasonable timeframe, Better Ventures isn't aggressive regarding growth. There's a healthy balance.
"We are very different in the sense that we really, at no point, are putting extreme pressure on our founders to grow at a certain pace, or certainly not to do that at the cost of their commitment to impact or building a healthy culture."
True scalability requires building and securing relationships within a specific industry.
[20:36] Supporting Women In Business
Lyndsey believes that, as leaders, women take a more holistic approach to company culture.
They maintain a high level of performance while still being compassionate and caring leaders.
"What we're always balancing is what's the appropriate rate of growth for this company in the market that they're in. Growth and scalability are incredibly important, but not at the cost of all these other things."
Unfortunately, women in business tend to undersell themselves. In Lyndsey’s experience, men tend to present bold visions while pitching an idea, while women are more realistic.
"I do kind of fundamentally believe that women as leaders are, in a way, far more able to be whole in terms of how they relate to the team, how they create culture, how they show up as both high-performance, and also compassionate, caring leaders and people."
There's a bias against women in business; women get different questions or differently framed questions than men.
“We talked to thousands of founders who are pitching, and it is, more often than not, the men who are painting this very bold vision of the future with a lot of conviction, and often the women tend to be a little more realistic or conservative about how big it can be, or how exciting it can be, or their level of confidence in getting there.”
Better Ventures avoids this bias through a system of checks and balances and inclusive leadership training. Listen to the episode to find out how they do it!
[25:47] What Better Ventures Looks For In A Company
Better Ventures usually backs engineering or science-oriented founders.
“But we're not investing in consumer goods, or social media, or like some of these industries — that speed is, it's kind of like do or die. I think that's important to keep in mind as well.”
The founders don’t need in-depth financial knowledge — it’s better to get an outsourced CFO for that.
However, Better Ventures does expect them to have a grasp of business fundamentals.
They also look for a company’s ethos and cultural fit.
[31:59] Lyndsey’s Advice On Building A Business
Everyone listening is at a different stage of their business journey.
Listen to and stick to what feels authentic to you.
“There's a lot of noise and, like we just talked about, with raising capital — there are a lot of different paths to get there. I think those that are most successful are aware of and stick to what works for them.”
Build toward your personal mission of social impact; don't become swayed by what others are doing or the market.
"Just as you would evaluate any other long-term relationship or partnership is, 'Are you aligned? Are you on the same page?' Because that either can be something that supports you and helps you as a founder, or it can be something that introduces a lot of friction."
There are many paths to your goal. Choose the one that lets you stay true to yourself and your vision.
Lyndsey Boucherle is a Partner at Better Ventures, an impact investing and venture capital company. They aim to get early-stage entrepreneurs off the ground using technology and science. The goal is a better world. Lyndsey believes that social and environmental change can happen at scale. That change starts with companies.
She has over a decade of experience in business strategy and communications, having worked in various locations worldwide. She believes strongly in social impact, supporting and leading critical initiatives to create the changes she wants to see.
To find her, you can visit the Better Ventures website. Alternatively, contact her on LinkedIn, or follow her on Twitter.
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