To find LPs for an impact fund, VCs must look beyond self-described impact investors. Use a data-driven approach to identify hidden impact LPs by analysing the board memberships of foundation trustees, the investment patterns of specific family offices and the supply chains of corporations with strong ESG commitments.
Why is it hard to find LPs for an impact fund?
The pool of LPs who publicly label themselves as impact investors is relatively small and highly competitive, which makes fundraising in this space difficult for impact VCs. The key is to find LPs who have a deep alignment with your fund’s mission but may not use the impact label in their own mandate.
How can data uncover hidden impact-aligned family offices?
Many family offices engage in significant philanthropy that is disconnected from their investment arm. Data can bridge this gap.
- Analyse foundation boards: Identify the trustees and board members of philanthropic foundations that are active in your fund’s impact area (e.g., climate, education, healthcare).
- Cross-reference investment activity: Use an LP database to cross-reference these individuals with their family offices or personal investment vehicles. A trustee of a major climate foundation is a highly qualified, non-obvious LP lead for a climate tech fund, even if their family office has no public impact mandate.
How can VCs find non-obvious corporate impact LPs?
Corporate LPs (CVCs) are often overlooked as impact investors, but many have strategic goals that align perfectly with an impact thesis.
- Map corporate ESG goals: Identify large corporations that have made public commitments to specific ESG goals (e.g., achieving Net Zero by 2040, sourcing 100% sustainable materials).
- Target their CVC arms: Approach the venture arms of these corporations with a tailored pitch. Frame your impact fund as a strategic tool that can help them achieve their stated ESG objectives by providing them with a “window” into the innovative startups that will solve their future supply chain, energy, or sustainability challenges.
What is the data-driven process for finding these LPs?
- Define your impact niche: Be specific. Climate tech is too broad. Is it carbon capture, grid storage, or sustainable agriculture?
- Map the ecosystem: Build a database of aligned entities for your specific niche: the top foundations, the most committed corporations, and the most active academic research institutions.
- Identify the people: Identify the key decision-makers within these entities - the foundation trustees, the corporate sustainability officers, the university endowment managers.
- Find the investment vehicle: Use data to connect these individuals back to their primary investment vehicle (family office, CVC, endowment). This creates a highly qualified list of non-obvious, impact-aligned LPs.