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In a world increasingly focused on sustainability and positive change, impact investing has taken the stage. Startups are increasingly aligning their missions with social and environmental causes. Impact investors, on the other hand, are eager to support these ventures that promise not just financial returns but also a tangible contribution to society. For this synergy to work effectively, impact metrics are crucial. In this blog, we’ll delve into the impact metrics that you should report to their impact investors and how these metrics shape your journey.
Unlike traditional metrics that focus solely on financial gains, impact metrics are indicators that measure the social and environmental effects of a business’s activities.
These metrics reflect your business’s contribution to job creation and, indirectly, economic growth and stability within a community or region.
Most-reported metrics in Rundit: Jobs created as a result of your product/service; Female Senior Management; Female Founder(s); Founder in the team…
Are employees and community members receiving training or skill development? This is key for long-term social advancement.
E.g. Number of farmers who receive access to financing/training; Low/Medium/High skilled jobs created…
For startups in the health sector, or any that affect health through their products or services, this metric is vital. It tracks how your startup impacts the health and safety of your customers.
E.g. Customer Health Improvements (tracking improvements through surveys or case studies); Number of patients; Medical treatments…
The reduction of greenhouse gas emissions as a result of your business’s operations or products.
Most-reported metrics in Rundit: CO2 saved or avoided total (tonne) per year…
This metric involves monitoring the efficient use of resources, including water, energy, and raw materials.
Most-reported metrics in Rundit: Renewable gas monitored; Renewable electricity monitored; Water Usage; Sustainable Sourcing (% of materials sourced from sustainable or ethical sources)
How does your company reduce waste or promote recycling in your operations?
Most-reported metrics in Rundit: Plastic waste avoided; Micro-plastic Waste Avoided…
Is your startup contributing to the economic growth of the locality? This can be through partnerships, sourcing local materials, or other means.
E.g. Increase in Farmer’s Income; Insured households; Indirect Jobs Created; % life quality improvement
For product-based startups, especially in food or apparel, engaging in or promoting fair trade can be a significant metric.
Impact investors often look for business models that are not only profitable but also sustainable in the long run.
E.g. Growth Rate; MRR; ARR; Customer Acquisition Cost and Lifetime Value; Cash balance; Churn rate…
Regular reporting of these metrics is essential. Impact investors are interested in both quantitative and qualitative data. You should therefore provide not only numbers but also stories and case studies that offer a fuller picture of their impact.
Rundit’s investor report tool offers comprehensive investor reporting features, making the process of startup investor reporting a breeze. The metrics table displays your metrics in an easy-to-read format, while the written updates provide brief summaries of the information you want to share with your investors.
For startups, meticulously tracking and reporting impact metrics helps not only in securing and maintaining investment but also in aligning your company’s mission with tangible goals. For investors, these metrics are assurances that their investments are making a real difference in the world.
In a nutshell, impact metrics foster transparency, accountability, and a shared sense of purpose between startups and impact investors. They are not just numbers or stories; they are the building blocks of a better world being carved out through innovation, entrepreneurship, and mindful investment.
