June 26, 2018

Market landscape: Social Impact With Investment Upside

For those that want to do well by doing good, a number of high tech social-impact startups are currently raising seed capital in order to create businesses that can enable social causes to more efficiently fulfill their missions and connect with donors.


The world is becoming more socially-responsible by the year, and it happens to be big business. In 2017 alone over $410 BILLION was donated to nonprofits by Americans.


Since “doing well by doing good” is a huge sector that continues to trend upward, a number of startups are worth considering for the socially-minded investors.


Though it might not seem it at first glance, businesses that can bring efficiencies and transparency to the $410 billion nonprofit giving market have an opportunity to become big business.


There’s a saying that societies thrive when “old men plant trees whose shade they won’t get to enjoy” — by investing in these types of deals you get to plant trees and enjoy their shade.


Forget Snapchat, Millennials want to change the world


Of the $410 billion that was donated to nonprofits in 2017, 70% of that came from individuals donating as little as $1. That means that many millenials are finding ways to partake in the giving economy even if it is in small dollar amounts.


Bringing efficiencies and transparency to the process of raising billions from small donations is key to making fundraising more effective. And nonprofits recognize the need to invest in modernizing the fundraising process.


According to the Stanford Social Innovation Review, there will be several major trends that are shaping an increasingly innovative charity sector.


To summarize, non-profits will utilize technology to engage donors in more face-to-face interactions, create transparency through data, and enable more proactive fundraising strategies.


It’s clear that big changes are happening “industry”-wide, and by enabling these firms to become more efficient you can help drive this change. If you think about it, any successful enterprise does so by solving a problem — this fundamental truth applies doubly to the nonprofit sector.


Being more mobile and tech-focused (as well as transparent with data) will play an increasingly important role in the nonprofit sector. Any company that can aid these organization in fulfilling their missions more effectively is well positioned to win.


Below are 3 deals currently raising capital via equity crowdfunding that you can invest in today, which will help to usher in a new age of nonprofit social giving, with a for-profit business model.


The deals you can invest in…


DonorSee, Wefunder:

  • What is It:

    • DonorSee is a platform that allows anyone to post short videos of people and projects they want to support in developing countries, that shows you where your donated dollars go and ensures 90% of the donation goes to the cause.

  • Pain Point Solved:

    • Transparency.

    • Ease of raising funds for overseas projects.

    • Building an engaged marketplace of fundraising backers.

  • Growth / Success:

    • 1,200+ successful raises.

    • Users of the platform on average are donating over 4 times showing an ability to make donating simple and engaging to create repeat investment.

    • 88% funding success of projects looking to raise $450 or less.

  • Founder:

    • Gret Glyer, Founder & CEO: Built a school in Malawi completely crowdfunded.

Dlyted, StartEngine:

  • What is it:

    • Dlyted offers electronic gift cards from over 500 retailers that when used to shop collect points that can be converted into donations by the user.

  • Pain Point Solved:

    • The Dlyted marketplace enables more individuals who might not be able to afford to give to causes they care about the ability to do so by earning rewards whenever they shop that they can donate to their favorite causes.

  • Growth / Success:

    • Over $1,000,000 in sales over the past 12 months.

  • Founder:

    • Barry Shore: Founded TheDailySmile, and other successful ventures.

SupPorter, StartEngine:

  • What is it:

    • Bringing transparency and efficiency to the fundraising space through a Blockchain enabled Smart Payment Processing and Tracking System for donations.  

  • Pain Point Solved:

    • Provides a faster, cheaper and more transparent way to donate, all without requiring it’s users to be crypto-literate.

  • Growth / Success:

    • Working prototype and on track to enable investors to be able to use the token on the platform within a year of the StartEngine offering ending.

  • Founders:

    • Three brothers, Inman, Stephen and Asa Porter with tech and finance backgrounds.


What You Should Know


The private sector is always looking for ways to improve the bottom line and become more efficient — this same philosophy is coming to the not-for-profit sector in a big way.


Imagine being able to donate to your favorite causes in a verifiable way with the push of a button on your smart phone — that’s the future we will soon enjoy. Fundamentally, there’s no difference between investing in companies that cater to charities — it’s just another $410 billion market.


There are no guarantees as with any investment — but it’s a safe bet that the companies listed above are solving very real problems. Investing in any of them gives all of us a shot at a rare “double-dip” opportunity: doing well by doing good.


59
About: Chris Lustrino

A Boston College Eagle for life, on a mission to democratize startup investing for all people at KingsCrowd, with a passion for Fintech, investing, social impact, doing well and doing good, and an avid runner, cyclist and writer.

View Chris Lustrino's articles

Other Articles

Is Preferred Equity the “Preferred” Structure of Equity Crowdfunding?

For investors participating in equity crowdfunding markets, preferred equity is… ...

How to Decide Your Investor Strategy

Before you begin making startup investments, it's important to determine… ...

Raising Capital, Recruiting Customers

Wefunder tested the theory that startup investing yields more capital… ...