What is Driving ‘Green’ Business Investment?

As today’s business leaders and entrepreneurs are presented with the unique opportunity to increase profitability through expanded eco awareness and a more proactive response to changing market expectations, many companies are seeking to refine their sustainable business strategies or start something completely new. One of the initial steps in starting a new venture or expanding on current company operations is the question of financing.

While some entrepreneurs prefer self-financing, many look for external options. In these economic times, investment dollars are less available than they were just a few years ago. Our sustainability consulting is frequently involved in discussions with clients and peers concerning start-up and business sustainability project funding options and financing qualifications. Although ‘green’ is a hot new business opportunity, investors still want traditional assurances and are looking heavily at executive leadership as a determining factor.

For many looking for venture capital to start a new ‘green’ business, questions rise about the current investment interest and the supposed decrease in enthusiasm. In recent article, GreenBiz asks the question: “Are venture capitalists becoming less inclined to cut green companies slack in terms of leadership, operational readiness, and/or valuation?”

According to Y Street Ventures, an investment management company with an interest in the sustainability industry and the triple-bottom line business philosophy, executive leadership is the best indicator of a project's potential. In the interview, the company cites some investment “red-flags” related to executive leadership:

•    Closed-minded entrepreneurs.
•    No real startup experience.
•    Entrepreneurs that try to control everything.
•    Trying to raise money instead of building a business.

In contrast, investors are looking for business sustainability leadership which possesses:

•    Willingness to work hard and do every job.
•    Open-mindedness.
•    Ability to focus and lead a team to a common goal.
•    Passion.
•    Honesty.
•    Experience.

At Taiga Company, our small business resources work with business leaders to define the unique links between sustainability concepts and business value drivers. We provide information and professional consulting services which assist company leadership to build a strong financial case for business sustainability.