Profit & Purpose: How to Balance Your Pitch

The next generation of startups and investors are putting more weight on sustainability than any previous generation that have come before.

Public approval has a huge effect on companies, and should a company or VC firm get blacklisted for funding the wrong company or committing unethical business practices, they are doomed to loose profit down the road.

That puts the weight on startups to not only align their goals with profit, but also with purpose, forcing companies to realign their goals if they aren't sustainable, both socially and enviormentally.

At the same time, while startups shift their focus towards people and making a positive impact, they simultaneously have to demonstrate to investors that their sustainability goals won't interfere with the returning profit of the investors.

That's a difficult balance for some, as many companies simply focus on solving a specific solution for a certain target audience, and have never before involved themselves with questions about sustainability in this sense.

So how do companies find a balance, when sustainability suddenly fell on the scale, tipping it over and forcing companies to adapt?

Here are 5 things to weight when balancing profit and purpose

Know the price of profit

Understanding the true cost of your profit is essential. This doesn't just mean the financial cost, but also the environmental and social impact. For every dollar earned, what is the carbon footprint? How many resources are consumed? Are there any social implications, like displacement of communities or unfair labor practices? By quantifying these, you can present a holistic view of your profit margins to investors, showing them that while you aim for high returns, you're also conscious of the broader impact.

If you think social impact doesn't matter, think again. The 21st century is an era where information is widely available and people are more concerned with their social impact than ever before. Today, good customer service is caring about what your customers care about, and doing business in a way that aligns with their values.

Know your investor

Not all investors fits your company. Some may prioritize quick returns, while others might value long-term sustainable growth, knowing the impact of doing poor business for the sole purpose of profit.

Research potential investors thoroughly to understand their expertise, focus, contribution, track record, core values, preferred investments and expectations.

If your investors don't care about sustainable impact while you do, taking their money is going to pay in the short term but create tension in the long term, as your values clearly misalign, making it difficult to please your investor who now has a say in your company's decision making.

Know the price for growth

Growth is expense, and requires cash. Many companies have bled out from lack of funding.

For your company to grow, will you need to hire rapidly, and if so, can you maintain a fair and inclusive hiring process? How much money will you bleed, and when will you start making profit to pay for your new expenses?

Most important, as growth needs to happen rapidly, will your company additions align with your values, or will you have to take the fastest option to handle your newfound growth? Hiring the wrong people at mass, while useful, might change your company in ways you didn't imagine.

Staying ahead of the curve in order to not be pushed into a corner, and staying true to your mission that you've aligned with your investors, and not make shortcuts in order to stay alive, is difficult in the short term, but crucial in the long term.

In the end, your track record stays, and cutting corners to stay afloat is expensive to fix and visible to your clients, potentially damaging your company's reputation.

Know your competitors and their challenges

You're not alone, and that shouldn't scare you. Being in a market where you are the sole service provider is a sign of not having a market whatsoever.

The way you utilize your competition is by learning from their mistakes while looking into the opportunities where they profit.

Have they faced backlash for unsustainable practices? What positive sustainable initiatives have they implemented, and how have these been received by the market?

By learning from their mistakes and successes, you can position your startup as a leader in sustainable practices in your industry. Moreover, showcasing how you differentiate in terms of sustainability can be a unique selling point when pitching to investors.

Stay ahead by keeping your eye on the scale

So how do you keep the balance? The simple answer is the tough one. It's paying attention, but not on a corporate level - on a consumer level.

If you are able to delve into your market as a consumer, as an individual, and not as a major corporation, you will hear things that would never have reached you as you sit high up on the corporate ladder.

The landscape of startups and investing is rapidly evolving, with sustainability at its core. By considering these five points, startups can ensure they're appealing to investors while also building a foundation for long-term, sustainable success by paying attention to their community where they are.

The future belongs to those pay attention, who are part of the tribe, and in sync with their communities, no matter how big or small they are.