It’s great to hear a company wants to "go green" or pay a "living wage," but for the startups at
Good Company Ventures social capital is at the core of their operations.
The 2012 graduates—a group that features low-cost geothermal technology, a social crowd-sourcing platform and a green laundry service with an eye towards workforce development—are in the midst of first-round fundraising, and at least one company has gained nearly $1 million in investment. These innovators will join leaders of the public and private sector on
Tuesday November, 20 at First Round Capital, for a public
graduation reception and networking event.
Regalii, one of the graduating businesses, enables Latino immigrants to send remittances in the form of store credit via text. While their service has a clear social value—it protects the sender from predatory fees and the receiver from robbery—the stores lose value because they sell credits to Regalii in bulk. According to Zoe Selzer, executive director of the Good Company Group, this kind of value proposition triangle (where the purchaser is not the benefactor) can make the social venture business model tricky.
“We look for companies where the market strategy is not necessarily intuitive," Selzer says. "A lot of accelerator programs focus on the development of the product. We assume that people in our incubator have a product of pretty good value and what they really need to focus on is how to translate their good idea into something really valuable in the marketplace."
Good Company merged with Green Village Incubator in March 2012. The ventures are operational when accepted into the accelerator program and spend each week working through issues a potential investor would raise. They get feedback and advice from a panel of business and venture capital experts as well as their peers. The process often results in a complete reworking of the company’s value proposition.
Edi Bikes, which relocated from Chicago, entered the program expecting to provide bike customers roadside assistance. They now focus on commuter-centric engineering.
"[These companies] can’t just assume that their social mission is going to carry them forward," says Selzer. "You have to answer all [investor] questions if you want to be considered for a second meeting. We’re not giving any passes because you're trying to save the world."
Over the past three years, Good Company Ventures graduates have raise over $30 million of investment. This year,
Wash Cycle Laundry will graduate and hire its sixteenth employee. Other startups, including
Start Some Good, continue attracting venture capital and national press, proving companies that do good can also do well.
Source: Zoe Selzer, Good Company Ventures
Writer: Dana Henry