Many entrepreneurs without direct access to investment capital choose to test their idea while they’re working elsewhere.
Morgan DeBaun started Blavity, a Los Angeles-based website for Black millennials, while working at a tech company. After a year and a half, she had grown her initial audience and saved as much as she could until she felt Blavity was ready to launch. DeBaun was able to leverage the intersection of her startup and paid work to expand her network and get ready for launch.
For early-stage entrepreneurs, especially those in the impact space, securing early-stage capital can be challenging and unpredictable, according to New Media Ventures, a seed fund and network of angel investors supporting media and tech startups:
The “Pioneer Gap” — a term coined by Monitor-Deloitte and the Acumen Fund in 2012 — describes the lack of funders ready and willing to invest in “pioneering” business models for social change. “Although excited by their novelty, investors are often rattled by these firms’ risk profiles and are unimpressed by their financial returns.” In other words, even with the promise of large-scale impact, it’s difficult to get people to take early risk in an unproven market without proof of concept.
So what’s a founder to do? Get creative about capital.
New Media Ventures pulled together advice from funders and founders for a series of articles and infographics on startup capital for the impact investor.
New Media’s mission is to find, support, and finance organizations that are telling new stories, building advocacy movements, and catalyzing civic engagement. It seeks to invest in startups that disrupt politics and catalyze progressive change.
Funders and founders interviewed for this article include DeBaun, Taren Stinebrickner-Kauffman (founder of SumOfUs), Travis Moore (founder and executive director of TechCongress), and Alex Wirth (Founder and CEO of Quorum).
Read more here: 6 Creative Approaches To Raising Capital
This infographic is reposted here with the permission of New Media Ventures.