When I became an entrepreneur, I had no access to external investors.
The reason is, being French but living in Turkey, I had no access to French support system (that is only accessible for local impact) nor Turkish one (reserved for Turkish nationals).
So the traditional steps like “business plan”, “pitching to investors”, and “winning a competition” were not accessible to me.
To tell you the truth, I was OK with that, because I had never been a competitive person. And so entering a competition with my business idea while I was just starting out (and felt super insecure!!) was just not a good fit anyways.
Instead, I focused on a market-based approached : I started a lowest-cost-possible operation (=online), and my sustainability comes from how much customers I manage to please with my services (and how much of a difference I make in their life).
And you know what?! It worked! I reached break-even in just 6.5 months. 2 years down the line, I am happily making a good living out of my (super fulfilling) activity.
And then one day, I received an email that broke my heart.
It was a young lady asking if I was hiring, because she’s passionate about Social Entrepreneurship but couldn’t start her own venture.
Or should I say, she worked on it for months and months, but got caught by (what I now call) “the competition trap”, and ended up giving up because of not being able to match the investors “minimal capital requirement”. In the process, her idea actualy got stolen (!!!) by big corporate companies (who just got rid of the social impact component!!).
Here is her email :
I find it so terrible that someone with an amazing idea get stuck just because it doesn’t fit with the investors-centric system!
I know from experience this is not the only way. I know from experience one can launch her (or his) own business and make a difference in the world WITHOUT external investors.
And you know what? I now believe it’s actually much better that way.
Here is why :
Reason #1 to lead your sustainable business without external investors : it’s not free
Most investors (just like banks) will require that you – the entrepreneur – put some money on the table. Sometimes they will impose a minimum capital requirement, and sometimes you have to match their investment (= they will only invest 50K if you also put 50K).
And off course, who says investors means you’ll need to eventually reimburse them (often with a profit, even in the world of social business where the profit is supposed to be reinvested in your impact, not in few people’s pockets!).
When you’re free of investors, you’re free to use your own funds the way you want, and you’re free to use your profits the way that benefits most to your impact too.
Reason #2 to lead your sustainable business without external investors : it’s not necessary
Internet has democratized entrepreneurship a lot. It has never been cheaper in human history to start a venture, and it has never been easier to reach TONs of potential customers (for free) through social media & content marketing.
Off course, some physical businesses still require a heavy investment, but you can still start with a light, online version of the difference you want to make in people’s life before going for the heavier, investment-intensive model !
Reason #3 to lead your sustainable business without external investors : it’s not fair
The traditional, investors-centered approach is extremely elitist. Only a few chosen ones get to launch their ideas into the world.
And you know what? I suspect it to favor men more then women.
- Most investors are men and so they will tend to relate easier to an idea articulated by a male counterpart,
- Women are much less competitive and tend to “win” less, even with better ideas/potential.
It’s OBVIOUSLY NOT a system that benefits to the community as a whole.
As very well said in SheEO’s manifesto :
Reason #4 to lead your sustainable business without external investors : it distracts you from the ONLY actual sustainability source: clients
Storytelling your idea to potential investors and convincing actual customers are two VERY different things. It requires different skills, and both take a lot of practice.
When you spend your time and energy making your business idea investors-ready, it’s a time you don’t spend on tailoring your solution to your customers most pressing needs and desires.
External investment is not a recurring revenue. Even when you manage raise some money, it can only last so much time.
But once you manage to make a difference in the life of a customer, and repeat that with other people, over and over again, you create a sustainable stream of revenue for yourself and your business venture. Focusing on serving them (instead of spending time on raising funds) is the fastest way to sustainability.
Solène is the Chief Empowerment Officer of Creators for Good.
She developed a methodology that allows Global Citizen to start and grow their own impactful businesses from anywhere in the world – and with no need for investors or government support.