better ventures revolves around impact. Our goal is to improve the world by accelerating founders that are driven to help people and save the planet. Part of leading an impact business is to be transparent about your actions, achievements, and goals for the future. As impact investors, we are constantly challenging and reassessing our approach to integrate the right levers along our value chain. We have recently evaluated our impact approach internally to have a better overview of where we stand and what we would like to improve for the future.
What we already do and do well
One of our core principles is to be founder friendly. This applies to our impact evaluation as well. To uphold our impact goals while making the application process for new startups as easy as possible, we have developed a lean impact check. First, we assess whether the startup falls in one of our 6 core impact areas and matches our impact definition. For us it is important that the impact is integrally anchored in the business model, meaning that each sale directly translates into one unit of a relevant impact KPI. We bypass businesses that create impact through donations since such contributions are often first to be cut in the case of declining financial performance.
If we see no red flags, we have an initial call with the startup to get to know the team and discuss general business matters. There, we also touch upon their impact vision and ask them to give us any portion of impact calculations they may already have. Going forward, this helps us perform a more in-depth impact analysis. We check for the size of the addressed problem, whether the solution solves it at the root cause, and how high the positive contribution is. Other factors we also place importance on are the urgency, external risks, and adverse effects the solution might have. In case there are still some uncertainties, we consult with industry experts or members of our angel club to gain clarity on the relevance and feasibility of the startup’s impact.
Assuming a successful process and a closed investment, the next step is to conduct an onboarding session with the startup. Part of this is a qualitative discussion to help define reasonable impact KPIs and methods to measure and track appropriately. Our goal is to effectively track the impact performance in form of KPIs for all of our portfolio companies. Not only do we look for environmental impact levers that might be more common, but our broad impact scope also includes people-related topics such as health and education. For example, the tons of plastic saved by Everdrop, can’t be compared to the social impact created through vCOACH’s upskilling solution. Therefore, we want to move away from rigid “one fits all” metrics and tailor the KPIs to each startup individually.
Determining the most fitting impact KPIs for the startup isn’t always straightforward at first. However, once the correct metrics are established, we enable long-term ease of impact tracking for the business. This minimizes the founders’ future efforts in evaluating their business’s impact progress and lets them focus on other areas instead. As founders ourselves we understand how valuable it is to save time where you can.
What we could do better
Being able to look at your own company critically is crucial for reaching success. That is why every few months we reassess our status quo, what we want to achieve, and what we need to improve to achieve it. We are grateful for club member feedback that we receive as well as the input from our team and other stakeholders. When it comes to impact evaluation and tracking, we have made much progress so far and are proud of where we currently stand.
Yet, we are also aware of the areas we can improve. While our main mission is to fund startups that improve the world, we ourselves are still in an early stage as well. Since our founding less than two years ago, we have continued to learn and improve our own assessment. And just like any other startup, we do our best given our limited resources.
One improvement we strive to make is to refine our impact expertise in various fields. Fortunately, we benefit from the combined knowledge that comes naturally from a club of entrepreneurial and experienced angels. They contribute greatly to our decision process with their own insights on impact topics. As we continue to build our club network, we will get smarter in evaluating the importance of different impact areas. For example, a pressing issue we have given much attention lately is the impact of food. One of our newest portfolio companies Keen 4 Greens tackles this problem through their mycelium-based meat alternative.
Another goal we set for ourselves is to advance our KPI-tracking procedure. We have already established a process to identify measurable metrics and ways to track them throughout the business development. The next step is to set specific benchmarks for ourselves as well as for the individual startups. Such markers will hold us more accountable for the impact we want to achieve and help the startups to achieve their targets.
We are excited to move forward with our impact goals and will keep on learning and improving in the process. Thank you to anyone along the way that has helped us with feedback, patience, and trust. Hopefully, our thoughts on our impact approach will inspire other businesses to reevaluate their own impact strategies. Let’s build a better future together!