San Francisco University held a day long conference focused on social entrepreneurship and innovation. During one event at the conference, a panel of social entrepreneurs and investors discussed the topic of where emerging social entrepreneurs should go to fundraise for capital. 

“Go directly to the networks that help introduce investors to early stage entrepreneurs,” said Stephanie Cohn Rupp, the managing director of impact investing for the Threshold Group. The Threshold Group is an independent wealth management company serving individuals, multigenerational families, and foundations by providing customized plans and strategies, institutional-quality research, and a goals-based investment approach of clients.

However, it is challenging for early stage entrepreneurs to receive significant funding for investors. Clara Brenner, the co-founder of Tumml, the organization that provides resources to early stage entrepreneurs tackling major urban challenges, suggested approaching angel investors instead of venture capitalists. Angel investors are individuals who inject capital for startups in exchange for ownership equity or convertible debt.

An example of this is AngelList, a platform that connects start-up enterprises with angel investors. While data shows that only 2% of investors invest in an enterprise because of the mission, they do invest in mission driven organizations and therefore can be a great starting place for early social entrepreneurs. 

Jay Morris, a social entrepreneur and the portfolio director for the Peery Foundation, suggested the best place to go for capital is “your backyard.” His recommendation is to start by reaching out to your own networks as people will be more willing to invest with you if there is already an established relationship, level of trust, and interest in your success.  

For early stage social entrepreneurs it is often a combination of these suggestions, also known as a layered capital approach.