INSUBCONTINENT EXCLUSIVE:
David Teten
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David Teten is an advisor to emerging investment
managers and a Venture Partner with HOF Capital
He was previously a partner for 8 years with HOF Capital and ff Venture Capital
David writes regularly at teten.com and @dteten.
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Use agile budgeting to manage your cash
If
you don&t have an investment banker, replicate one
Congratulations; you&ve decided to launch a technology-enabled startup with a
positive social impact! Nearly every major Silicon Valley venture-capital firm has now invested in a B Corp; maybe you will be one of
them!
The bad news: some venture capitalists have a bias against startups with an explicit positive social impact on the grounds that they
have a smaller addressable market, and that the founders are not sufficiently focused on creating shareholder wealth
And of course, effectively all venture capitalists are going to require some equity for their investment.
Fortunately, there are a wide
range of organizations that specifically want to support you, not just the VC community
I&m now researching non-dilutive funding for Action Tank, a startup I&m gestating to &Make America Functional Again.& I worked with
outsourced research firm Wonder* to identify all of the institutions we could who support tech impact startups with cash and community, and
in many cases without dilution
I emphasize my focus here is organizations which are backing for-profit companies and do not take equity
If you think I&ve missed any, please contact me.
I suggest start by looking at the many programs offered by the Fortune 500 startup networks
In addition, there are many other groups will give you cash, training, and community with few or no strings attached:
Ashoka is a foundation
that engages in scouring for and choosing the leading social entrepreneurs across the globe, who it refers to as Ashoka Fellows.
Aspen Tech
&Our program mixes the best of both Washington and Silicon Valley, bringing together stakeholders in policy and technology to train the next
generation of policy entrepreneurs
The Aspen Tech Policy Hub is a West Coast policy incubator, training a new generation of tech policy entrepreneurs
We take tech experts, teach them the policy process through an in-residence fellowship program in the Bay Area, and encourage them to
develop outside-the-box solutions to society problems
We model ourselves after tech incubators like Y Combinator, but train new policy thinkers and focus the impact of their ideas.
Bluhm/Helfand
Social Innovation (BHSI) Fellowship
&Since 2011, the Bluhm/Helfand Social Innovation (BHSI) Fellowship has supported the work of 36 innovators—representing the United States
as well as 18 other countries on five continents—who address pressing global issues, from healthcare delivery to college persistence and
sustainable construction in developing nations
From the beginning, the BHSI Fellowship has created meaningful, customized experiences for Fellows with connections to influential business
and civic leaders, exposure to a broad audience as a speaker at Chicago Ideas, and over $3 million in financial support and in-kind
contributions.&
The Clayton, Dubilier - Rice Fund for Entrepreneurial Studies
&The Clayton, Dubilier - Rice Fund for Entrepreneurial Studies supports entrepreneurs attempting to build something that advances business
and society in revolutionary ways
&
Columbia Business School Tamer Fund for Social Ventures
Requires Columbia affiliation.
Draper Richards Kaplan Foundation identifies entrepreneurs that display characteristics of &exceptional
social leadership through discretion, influence, vision, ambition, intelligence, and follow-through.&
DV Hacks, led by BCG Digital Ventures:
&A 48-hour hackathon to improve how we live, work, collaborate, and learn.&
Echoing Green is a foundation that distinguishes
transformational leaders via its fellowships
Their foci include addressing environmental sustainability, racial and gender equity, economic development concerns, etc.
Future Labs Flash
&For pre-seed and seed companies based in the U.S
and Israel with a focus on AI for social impact,&
Google AI for Social Good
&Our 20 selected organizations will receive coaching from Google AI experts, Google.org grant funding from a $25 million pool, and credits
and consulting from Google Cloud
They will also be offered the opportunity to join a customized 6-month Google Developers Launchpad Accelerator program, including guidance
from our nonprofit partner, DataKind, to jumpstart their work
We looked for projects across a range of social impact domains and levels of technical expertise, from organizations that are experienced in
AI to those with an idea for how they could put their data to better use
&
Google for Startups Accelerator
&Geared toward social impact startups working to create a healthier and more sustainable future, the accelerator provides access to
training, products and technical support
Startup founders will work with Google engineers and receive mentoring from over 20 teams at Google, as well as outside experts and local
mentors.
J.M.Kaplan Innovation Prize
Innovation Prize seeks out innovators who are spearheading transformative early-stage projects in the fields of the environment, heritage
conservation, and social justice
Innovation Prize is open to nonprofit and mission-driven for-profit organizations that are tackling America most pressing challenges through
In 2019, we will award up to ten prizes, each including a cash award of $150,000 over three years, plus $25,000 for project expenses, for a
total award of $175,000.
Kairos Fellows
&The Kairos Fellowship is designed to build the next generation of leaders in the field of technology, analytics, digital campaigning, and
online organizing.&
MIT Solve initiative
&MIT Solve advances lasting solutions from tech entrepreneurs to address the world most pressing problems
Solve is a marketplace for social impact: we find tech entrepreneurs from around the world and broker partnerships across our community to
scale their innovative work — driving lasting, transformational change.&
Mulago Foundation Rainer Arnhold Fellowship
&The course brings Fellows and faculty together for an intensive week to work on design for maximum impact and scalability
Held in a retreat center on the coast in Bolinas, California, the course gives Fellows the rare opportunity to focus completely on their
ideas and a systematic way to apply them.&
Bloomberg New Economy Forum Solutions
&Mike Bloomberg announces an open call for solutions to global challenges facing the new economy
Entrepreneurs, academics, founders, and big thinkers are invited to submit their solutions to societal problems that need momentum, support,
and adoption from the private sector.&
Notley Ventures
&Notley is a catalyst for social innovation unlocking opportunities with today impact organizations and changing communities
Our mission is to scale and support businesses, nonprofits, individuals, and programs making positive change in the world.&
Recurse Center
&The Recurse Center is a self-directed, community-driven educational retreat for people who want to get better at programming.&
Skoll
&The Skoll Foundation drives large-scale change by investing in, connecting, and celebrating social entrepreneurs and innovators who help
them solve the world most pressing problems.&
Summit Fellows
&Through a series of invitation-only events, Summit fosters a global community of entrepreneurs, academics, athletes, artists, astronauts,
authors, chefs, engineers, explorers, philanthropists, spiritual leaders, scientists, and beyond.&
Thiel Fellowship
&Founded by technology entrepreneur and investor Peter Thiel in 2011, the Thiel Fellowship is a two-year program for young people [under 22]
who want to build new things
Thiel Fellows skip or stop out of college to receive a $100,000 grant and support from the Thiel Foundation network of founders, investors,
and scientists.&
Pioneer.app
&Get funding and guidance for your project
Pioneer is a weekly contest for creative people around the world making their ideas become real
Winners get $7000, a round-trip ticket to Silicon Valley, access to world-class mentorship, and more.&
Roddenberry Foundation Catalyst Fund
&The Catalyst Fund awards small grants for early-stage, innovative, and unconventional ideas that address serious global challenges.&
SEIF
The SEIF Awards target European impact entrepreneurs who develop or make innovative use of technologies to tackle social and/or
environmental challenges and contribute to the UN SDGs [Sustainable Development Goals]
Each Award grants the winners CHF 10&000
Together with our partners UBS and PwC we provide finalists a unique opportunity to increase their international awareness, gain reputation
and present themselves to a top-class jury.
Three dot dash
&Powers the most influential social entrepreneurs between the ages of 13 -19, who have found a solution or innovation to address a basic
human need.&
YC120 (part of Y Combinator)
&We&d like to find more curious, creative people who are doing exciting work in emerging fields and give them an opportunity to start
Pando Daily wrote: &VentureCrushFG takes no equity, there is no co-working space, and no demo day
The application process is not advertised
Most applicants come from referrals.& &VentureCrushFG[‘s]…stellar reputation among founders and investors is due, in part, to the
success of its most high-flying companies.& &If anything, it more of a community than an accelerator, a way to keep a strong network of
alumni, mentors and investors connected
Between one and two hundred techies are part of the group, including founders, execs, 40 to 50 VCs and a few dozen angel investors.&&
We
&This global competition is open to entrepreneurs, performers, startups, and nonprofits-anyone who embodies our mantra, Create Your Life
Work.&
World Summit Awards for Young Innovators
&WSA Young Innovators is a special recognition for young social entrepreneurs under 30 years of age, using ICTs to take action on the United
Nations Sustainable Development Goals (UN SDGs)
Together with the WSA winners of each year, they are honored as outstanding digital innovation with social impact.&
You may also want to
look at product-based crowdfunding, e.g., Indiegogo*
Other traditional options for non-dilutive financing include grants, loans, SBIR, STTR, vouchers and tax credits, include:
Wonder Overview
of Non-Dilutive Funding
Non-Dilutive Financing: Everything You Need to Know
Beyond the SBIR: Non-Dilutive Funding for Your Startup
National
Economic Impacts from the DOD SBIR/STTR Program
You&re eligible for the many accelerators, as well as specifically the impact accelerators
See Conveners Impact Accelerator Selection Tool
Some specific accelerators:
17 Incubators For Impact Entrepreneurs and Social Enterprise
Blue Ridge Labs @ Robin Hood
Higher Ground
Labs
Catalyst Fund (Managed by BFA, founded in 2016 with support of the Bill - Melinda Gates Foundation and JPMorgan Chase - Co)
Techstars
Impact Accelerator
Y Combinator
There are many VCs who have a stated focus on social impact; for full lists see Impact Capital Managers and
Oliver Libby, Managing Partner, H/L Ventures, notes, &it is important to remember that impact funders occupy the same spectrum of returns as
From 100% loss capital (e.g
a grant) to shooting for massive returns (some impact VCs), an entrepreneur can unlock everything in between, including first-loss capital,
impact bonds, patient capital from program-related investments and families, and more
The market is also coming to understand that high impact can sometimes come with high returns too.&
Rachel Butler, President, Cavendish
Impact Foundation (where I&m an advisor), mentioned fiscal sponsorship as an option
&It an arrangement where an entity in need of funding (and it can be a for-profit, social enterprise) teams up with a 501(c)(3) that has an
aligned mission, and money can be raised through the 501(c)(3) and used to support a specific project being done by the social
enterprise.
So, for example, if the 501(c)(3) has in its mission to support improving education, and a for-profit social enterprise is
developing an app to help improve access to better education for people in underserved communities, the 501(c)(3) could support that
The 501(c)(3) does have to maintain discretion about how they use the funds (as a safeguard to just having it be an arrangement for
funneling philanthropic funds), and there are some other stipulations, but otherwise it pretty straightforward
The ‘Project& can actually do the fundraising, as an agent of the 501(c)(3), and have the money directed to the 501(c)(3)
The project is usually something that has a fairly short timeframe with measurable milestones that indicate progress
The 501(c)(3) also takes an administrative fee for their role in the collaboration.&
Bill Warren, CEO of Peeps Democracy, Inc., wrote,
&another type of funding source for a social impact entrepreneur to think about is startup challenges/competitions at her/his alma mater
For example, Duke sponsors a $10,000 annual prize for students, faculty, or alumni working on a startup in the clean energy space
These prizes can be a great source of non-dilutive funding for early-stage ventures and also offer free exposure to academic thought-leaders
and other alumni, who might support your startup via mentorship or investment
&
Emily Rasmussen, founder - CEO of Grapevine.org, suggests turning philanthropic donations into for-profit investments using Donor Advised
Funds (DAFs), which are like Health Savings Accounts for charitable giving
You make a tax deductible donation into a DAF account, get an immediate tax deduction, and then donate your funds out to charities over time
In the meantime, your funds are invested to help grow your fund, just like an endowment
With some 501(c)(3) DAF sponsors (e.g Impact Assets), after making a tax-deductible donation into their DAF account, donors can then advise
the sponsor to invest their charitable assets into a specific social enterprise deal
These deals are sourced by the donor investor and any future returns go back into the DAF account and are available for future impact
investments or charitable donations.
Lastly, I suggest reviewing these links on fundraising:
Please don&t pitch a venture capitalist without
this checklist
What type of capital should you raise, and from who?
How Tech Startups Can Get Money and Support from the Fortune
500
Fundraising Hacks: How to Raise Capital for your Startup
How Star Wars will help you raise capital for your company
Face-to-face
meetings are important, but written collateral is mandatory for closing the deal
The investment committee rejected you; what does that
actually mean?
Is Venture Capital Right for Social Ventures?
* I&m an investor in this company.
Thanks to Emily Campbell, Esq., of The
Campbell Firm PLLC for helpful input; she has advised me on some legal matters in the past.
