Earthenterprise Tool Kit - International Institute for Sustainable ...

EarthEnterprise Tool Kit
TOOL
Sustainable investment is different from traditional investment in that:
• Money will come first from investors who share an understanding of the
new economic paradigm of sustainability.
As the sector shows the ability to generate competitive returns, more investors
will be attracted to sustainable enterprises.
The challenge for sustainable entrepreneurs is to appreciate the distinct features
of sustainable investment and understand what they mean to business
planning and efforts to attract capital.
Get the Fundamentals Right to Approach Capital Markets
Because of their limited internal resources and size, and as a result of the capital
market’s bias in favour of large companies and investments, SMEs, including
those that are sustainable, are in a weak position when seeking financing and
investment.
Sustainable entrepreneurs have to be prepared to change the way they plan and
carry on business, and how they seek capital.They have to go to the investment
“mountain”, and not expect it to come to them.
Checklist
• Ensure that the return/risk ratio (as judged by possible investors) is
competitive with other potential investments. Sustainable entrepreneurs
cannot expect concessional or “soft”consideration by lenders and investors.
Thoroughly examine the target markets and ensure that there is adequate,
genuine demand for the product. Technologies, goods and services do not
create markets. Sustainable entrepreneurs need to be more adept than
others at responding to and planning for market demand. At times, new or
growing sustainable enterprises can shape or increase the size of a market,
but it is folly to attempt to make a business fly in the absence of existing
demand.
• Devote the time, money, and enthusiasm needed to educate potential
i nvestors and capital markets about the emerging opportunities for
environmentally sustainable enterprises in North America and globally.
• Do a first-rate business plan and offering. The challenge of seeking capital
for sustainable SMEs requires that business planning and investment
offerings are virtually perfect in form, content and presentation. While the
need is technical in part, it may also raise questions about the very products
or services the company intends to produce, and the markets it has
i d e n t i f i e d . In other wo rd s , if the sustainable entre p reneur cannot
successfully present a first-class offering to capital markets, he or she may
RAISING MONEY FOR SUSTAINABLE ENTERPRISES
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