Sustainable Investment: A Business Angel's Perspective

The key question for most entrepreneurs is: Where do I get the money to launch my start-up? Many entrepreneurs start with their own savings or with the financial support of friends or family. But once the business starts to grow, bigger amount of financial resources are necessary. At this stage, it might be useful to get in touch with business angels.

We have talked to Brigitte Baumann, CEO Go-Beyond. Go-Beyond provides services to business angels including for those who specifically target start-ups whose products or business model contribute to sustainability.

Brigitte Baumann, who is a business angel and in what kind of a project does she or he invest in?

Business angels are generally private investors. What is special is that we invest not only money, but also provide other “support”, mostly time and knowledge into a start-up. Usually this remains a minority investment of some 20 to 30% in equity. Sometimes, but it is rare, also in form of convertible debt. We invest mostly at a rather early stage in the development of a company, but it should already have some traction, a solid team and a clear business model. Generally, when we invest, the company has already a value of one million or more and we invest 100'000 to 500'000 CHF or USD as the first step.

Who are the members of Go-Beyond ? 

In Go-Beyond, we have individuals, families and companies as clients. Amongst the individuals, there are rather young people (mid thirties to mid forties) who work in a corporation, and think that one day they may be entrepreneurs. Then there are more experienced individuals who are in a career-shift, or are people in transitions because they have sold their own business. And the last category consists of individuals who just want to actively manage their savings. Instead of investing them into a fund or an existing large company, they prefer investing in younger companies where they can themselves support the development.

Within Go-Beyond, you have initiated a social and environmental impact investor group. In what kind of deals do you invest.

In all the projects we invest in, we care about sustainability. Today, it's just not possible any more to do without. But within this group – there are about 12 members – we particularly focus on projects that are clearly defined triple bottom line (people, profits & planet). We really look on WHAT the entrepreneurs do, and also on HOW they are doing it.

We do however not invest in countries where Go-Beyond is not present today, which is the case with developing countries. The companies we invest in can make business in developing countries, but since we need a physical proximity to the entrepreneur, they have to be located in one of the six countries where we are present: Switzerland, France, Italy, UK, Poland and the US.

Furthermore, we don't invest in non-profit organisations. The start-up has to have a business model that is self-sustaining.

How is the deal-flow in this field?

The deal flow is good. More and more entrepreneurs understand that today, they can't do without considering the social and environmental bottom line of their venture. But there are only a few that are ready for investors. One company we have invested in is in the field of solar energy. Another is about ecological baby clothing.

Is there any “exemplary” sustainability start-up that is doing really well?

I don't really know of any that could be considered as exemplary yet. They are still young and growing.

What could be done to encourage more social entrepreneurship?

It shouldn't be only about “social”. It's good to have positive social impact, but it's about the triple bottom line: The projects should have as well a positive financial result as a positive social and environmental impact.

In a more general sense, what do you think are the main challenges we face today about sustainability?

Well, the fundamental question is how do we enable the growing global population and continue its economic development with the finite resources of the earth. This poses some serious challenges – for example, how do feed another one billion individuals with finite clean water supply and how do we use more sustainable methods for building and operating the new cities.

I am convinced that entrepreneurs will invent solutions to many of these global challenges. I and other Go-Beyond investors want to make sure that we are there ready to finance and accompany such entrepreneurs.

July 7th, 2011, Lausanne