Funding for Eco Companies – How and Where?
An eco company can be defined in a variety of ways. For the most part though, an eco company is usually any business or organization that either produces or uses in its production and/or manufacturing process, environmentally or ecologically friendly products and materials.
Retailers are taking note that today’s consumers are more and more environmentally conscious, and as a result, they have taken steps to make their companies more eco friendly. As the demand for eco friendly companies also grows, there is a new push on the part of entrepreneurs to find funding for their individual eco companies.
Funding for Eco Companies – How and Where to StartDepending on the product or service that an eco company is looking to produce or provide, there are a variety of places to begin looking for funding. Included in the basic list of sources of funding for eco companies are private investors, large corporations, government agencies, and of course environmental organizations.
• Private Investors – Perhaps the best place to find funding for eco companies is through private investors. Besides having access to great sums of money, private investors are often not tied down by individual stockholders and boards of directors (Wenzel). Most of the time, private investors are free to invest their money in just about any venture they deem worthwhile. Everyone wants to make a return on his or her investment, and today’s eco conscious investors represent the perfect place to start looking for funding.
• Large Corporations – From auto companies to oil companies, large corporations are always looking for an edge in their particular market or industry (Dorsey). Anyone who is at the head of an eco company would be well served to appeal to these well known as “powerful” corporations for help in funding their research and development. With the green movement in full swing, large corporations are eagerly looking for any investment that will help them look more appealing to today’s eco conscious consumers.
• Environmental Organizations – Who better to turn to for funding than an environmental organization? Whether you’re selling book or plastic bags, chances are there is an environmental organization that is more than willing to help you with your eco company. For these organizations, investing in an eco company is almost standard practice. If your eco company has a product that is in line with their beliefs, the sky is often the limit as far as the amount of funding that they might be willing to provide.
• Government Agencies – Government agencies probably represent the last place you should look to for funding, mostly because of the amount of red tape and bureaucracy that you will certainly have to deal with. Government agencies have strict standards and requirements regarding who, why, and how any type of funding is distributed and used, even if the funding is designed to benefit the environment.
Approaches to Finding Funding for Eco Companies
In terms of developing a method for approaching potential investors for an eco company, there really isn’t much difference between how you would ask for funding for a “regular” company. Be prepared to have a business plan, as well as thorough information on the products or services your eco company will provide, how your company will specifically benefit the environment, as well as how the investor itself will benefit from investing in the company.
You may choose to take an environmental approach or an economic approach to requesting funding. That though, depends greatly on the source of the funding. Data and measurements may work for a government agency or an environmental organization, but a private investor or a bank will want to see how the investment will affect their organization’s bottom line.
Written by Martin Jauregui
References
Dorsey, P. The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments. New Jersey: Wiley & Sons, Inc., 2008.
Wenzel, E. “Diaper Companies Wrap Up Funding.” CNET News. 4 December 2007. 12 July 2008. http://news.cnet.com/8301-11128_3-9828740-54.html?hhTest=1
