One of the individuals I have recently interacted with is Jan. She is the founding director of Impact Hub DC. Jan is an example of a mentor-driven impact investor. Through direct mentorship with her she is able to provide a uniquely personal level of due diligence for both the impact investor and the entrepreneur. She is able to assess the situation of a particular startup, team, and individual founder from the point of view that traditional VCs do not typically have access to.
I was relocated to D.C. in June of this year by a workforce development startup who raised over $2 million dollars during their three year lifespan. Upon my arrival to D.C. I discovered that they didn’t have a platform built yet, no job seeker had been hired through their service, they had one (1) paying customer, and the first thing I was tasked with was designing a brand book. Then, redesigning their static website. I was not allowed to communicate with our one customer, any of our partners, or the job seekers. Two months later, they had me design the first version of their web application from scratch. The two month contract turned into six months. By the time I was done there it was now October, and I was not in a good place.
To see a group of individuals raise $2 million for coming up with an idea they had pitched investors was demoralizing. No validation. No previous experience in the industry. No connections with the market they wanted to penetrate. It soon became clear why we hear about 9 out 10 startups failing.
I was confused as to why I had bootstrapped for eight years to create and run programs to meet unmet needs in my local community when other people just put ideas into a ten slide pitch deck and get money thrown at them for untested solutions to solve the skills gap.
The founders I worked for are good-hearted people whom I would be friends with outside of this situation, but to see $2 million not produce any outcome was painfully traumatizing. Looking back on it now, I can see that I took the whole thing personally as if someone made a decision to give them $2 million over me which was not the case at all.
I am noticing that over the years, I seem to have found a way to frame certain events as if they were designed to prevent me from accessing what is mine. It’s interesting because I never articulated these thoughts while it was happening.
A mentor-driven impact investor like Jan would have been instrumental both to mitigate the financial risk the impact investors were exposed to as well as provide the strategic insight and cultural foundation that the founders would need to learn in order to build a lean startup.
Mentor-driven impact investors like Jan are able to source the capital that high-impact high-reward entrepreneurs require to scale validated models by communicating with impact investors through the impact investing network that she built and maintains for her community at Impact Hub DC.
This is important to understand as a social entrepreneur. We tend to struggle with the concept of assessing our own value, especially early on. A mentor driven impact investor provides the depth of understanding in how we might imagine our change-making enterprise as one that also generates a profit because without that part your organization will not be sustainable. Making an impact with your organization is typically an outcome when your organization is able to support itself through its own profit centers.