The Global Startup Ecosystem Report 2022
Why Founders Should Be Open and Direct About Their Values
This contributed article was prepared by the authors in a personal capacity. The opinions expressed in this article are the authors’ own and do not necessarily reflect the views or position of Startup Genome.
“Your legacy is how you contributed to the future we are all creating together.”
At Renewal Funds, the mission-driven venture capital fund where I am a founding partner, we believe our actions paint our lifetime choices onto the canvas of people and planet. Both our personal and professional choices impact the legacy that we leave to the next generation. Neither your net worth nor the size of your startup’s exit is the demonstration of who you are in this lifetime. Rather, your legacy is how you contributed to the future we are all creating together.
As investors, our job is to find businesses and entrepreneurs that are working on solutions that will help shape the future for the better. And we’re not shy about sharing this vision with founders who come to us seeking investment, the LPs who invest in our fund for this very reason, and the broader entrepreneurial community we operate in. We hope that everything about our firm conveys this ethic, from how we are as individuals to how we treat our potential partners.
We find this works as a sorting filter, allowing others to choose whether they want to do business with us or not, and vice versa. Being clear and direct about our values also helps create the basic soil in which healthy relationships can grow. In business there will always be difficulties, hard choices, and necessary trade-offs. Even the most aligned collaborators sometimes see the world differently. Being transparent about your values from the start helps everyone treat each other with respect and come to decisions we can all live with.
Declare Your Commitments Loudly and Early
We recommend being clear and committed on the subject of values from the very beginning. From the start, ask yourself why? What inspires your passion for your entrepreneurial idea? Does it contribute to the betterment of humanity, planetary well being, and future generations? Am you clear on why you’re devoting your life to this venture?
Understanding your personal why is an essential first step, but we also encourage founders to share that why and set up systems to make sure their business decisions align with that purpose. That's why we participate in a number of different accreditation organizations like the B Corporation, a private certification of for-profit companies of their social and environmental performance. We don't force this structure upon founders, but we strongly encourage it and provide support to help them understand the option.
Such structures help founders validate and track their impact and describe what they’re doing so that others can understand it. They drive you to ask yourself whether your product, business, workplace culture, supply chain, and externalities all contribute to humanity and express your point of view in making the world better for future generations.
Setting up your business as a B Corp means making a public commitment to your values and focusing on the ultimate outcomes of your products and services beyond the bottom line. It creates a kind of systemic feedback loop in which commitment to your mission begets impact that only strengthens that commitment to your mission.
This commitment to values should also shine through in who you choose to work with and how you treat those collaborators. Being loud about your values when hiring or looking for investors sends a fair signal to those who have a very different type of philosophy about your standards and expectations. As with every relationship, sometimes things don’t work out as you expect, but giving a very honest and straightforward picture of what is important to you helps you find people with similar commitments and can save much confusion and heartache down the line.
Living Your Values Helps Change the World
Today, there is an explosion of people who are concerned about the future and who are dedicating their lives to thinking about challenges and coming up with solutions. Sometimes that work involves deeply technical innovations. Other times, it includes a consumer product that affects everyday people shopping at the grocery store. Entrepreneurs are innovating our cities, our transportation system, our energy systems. Renewal Funds has invested in everything from marketplaces for consumers electrifying their homes to carbon-neutral snack foods. Entrepreneurship is a huge world full of all kinds of people that see things differently.
We may have different points of view, different skill sets, and different reasons for why we do things. There are nearly infinite ways to be a mission-driven founder. But I urge you to lead from your values and declare those commitments loudly and early.
In practical terms, that makes finding like-minded collaborators and running your company in line with your mission go more smoothly. But it also shapes the culture around us. If we live in accordance with our deepest values and treat those we work with in line with our values, it brings those deepest values into the pragmatic world of making money and buying and selling. And it allows each of us to be the most positive influence on that world that we can be.